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Mid-WestFarmReport

Dairy producers forced to dump milk due to market, supply chain disruptions


SD Ag Connection & News Staff - April 7, 2020

MADISON, WI – The pictures are alarming. Hundreds of thousands of gallons of milk being dumped by dairy farmers across the country.

As the coronavirus pandemic forces restaurants and schools across the country to close, the end result is a disrupted dairy supply chain.

Farmers’ milk prices had gradually returned to profitable levels recently after struggling for more than five years.  Now, milk prices have plummeted since the beginning of March and the huge financial loss of dumping milk  is hard to take for already struggling dairy farms.

“About half of U.S. consumers’ food budget was spent on restaurants, and we’ve shut that spigot off,” said Matt Gould, editor at trade publication Dairy & Food Market Analyst. And sales to major dairy export markets have dried up as the food-service sector largely shuts down globally.

Those mass closures of restaurants and schools have forced a sudden shift from those wholesale food-service markets to retail grocery stores, creating logistical and packaging nightmares for plants processing milk, butter and cheese. Trucking companies that haul dairy products are scrambling to get enough drivers as some who fear the virus have stopped working.

What’s going on at grocery stores is an issue of incredibly high demand, not low supply, say dairy representatives, adding, the U.S. does NOT have an issue with milk supply. Yet, many grocery stores limit how much dairy product per shopper is allowed.

It’s gotten to the point that the American Dairy Association Mideast is asking people to report stores in Ohio and West Virginia that are putting quantity limits on milk purchases. If you see a store limiting milk purchases, take a picture, note the location, date and time and send it to [email protected]

Last week, a coalition of Wisconsin-based farm organizations asked the U.S. Department of Agriculture to use its purchasing power to bring relief to the American dairy industry in light of the economic woes brought on by the Coronavirus.

In a letter to U.S. Agriculture Secretary Sonny Perdue, the groups urged the federal government to purchase milk and cheese products with money made available through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which President Trump signed last week.

"With 80 percent of Americans under order to shelter in their homes, hundreds of thousands of restaurants, schools, and other food service outlets have closed or significantly reduced offerings, which means cheese and butter manufacturers have lost their largest market," the memo stated. "While retail sales have increased in past weeks, they are now leveling, and orders are slowing. Dairy manufacturers and processors also have seen their export markets decimated."

The letter further said dairy processors and farmers are working together to find solutions, but these circumstances are beginning to result in fresh farm milk being dumped as local processing plants are running out of storage space.

During a conference call with the media, John Umhoefer of the Wisconsin Cheese Makers Association said producers, processors, organizations and state governmental agencies are collaborating to keep milk flowing through the food supply chain.

"This disruption to the dairy industry is bringing unprecedented challenges to find channels for our milk," Umhoefer said. "We are asking the federal government to purchase products for food pantries and school lunch programs to help move the supply along."

The dairy leaders also noted that there is no official government program in place at this time to help producers who are being asked to dump their milk.

In addition, the industry is also facing financial hardship due to disrupted foreign business. Umhoefer says trading ports are not only at full capacity right now, but the labor force at those facilities have also been effected by COVID



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