Skip to comments.Dairies Are Dumping Millions of Gallons of Milk While Stores Are Rationing It Due to the Coronavirus. What’s Going On?
Posted on 04/06/2020 12:43:59 PM PDT by gattaca
Why is so much perfectly good milk draining into pits instead of replenishing empty dairy aisles?
Frustrated shoppers have reason to cry over spilled milk.
Dairy farmers are dumping millions of gallons of the stuff. Meanwhile, some dairy products are sold out at many grocery stores across the country, due to intense demand for basic household goods amid the coronavirus crisis.
USA Today reports on one farm in Wisconsin:
About 7 oclock Tuesday night, Golden E Dairy got the call that any dairy farmer would dread. They were being asked to dump 25,000 gallons of fresh milk a day because there was no place for it to go as the marketplace for dairy products has been gutted by the closure of restaurants, schools, hotels and food service businesses.
An hour later, the family-run farm near West Bend, Wisconsin, opened the spigot and started flushing its milk into a wastewater lagoon 220,000 pounds a day through next Monday.
No place to go? What about empty dairy aisles? Aren't those better destinations than drainage pits?
Glut Milk? According to analysts, it is tricky to switch from dead markets to a surging one. As Gizmodo explains:
...although consumer demand for milk in grocery stores is booming, it isnt easy for suppliers who normally make bulk products for restaurants to suddenly make the transition and make items for consumers. For example, it would cost millions of dollars simply to install the new equipment required to switch from making barrel cheese, used in restaurants, to making cheese wedges, used by grocers, per Reuters.
And the coronavirus crisis has made the shift especially challenging, as Yahoo Finance points out:
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. And sales to major dairy export markets have dried up as the food-service sector largely shuts down globally.
Another issue is that it is illegal to sell unpasteurized milk in many states, Wisconsin included, so if dairy processors arent buying it from farmers, it goes to waste.
And farmers have narrow time windows to solve all these problems, because milk is so perishable.
It all adds up to a glut of milk at the dairy even while there are shortages at the stores.
The Price Is Too Darn Low The nasty little virus that is upending our lives bears much of the blame, but misguided policies are making a bad situation worse.
Grocery stores could take up more of the slack if they were free to price and sell milk according to consumer demand. But, laws against price gouging keep the retail prices of dairy products artificially low during a demand surge. Too-low prices encourage hoarding, which leads to shortages. It also limits the profits for selling dairy.
If a store were free to charge market prices, however high, it would discourage hoarding, prevent shortages, and earn higher profits. The higher profits would increase the grocers' own willingness to pay for dairy products. This increased demand would ultimately translate into higher prices for farm milk, making it more affordable for farmers to bring their milk to market.
Since they cant charge market prices, stores instead prevent hoarding and shortages with purchase limits, which, among other bad effects (like punishing large families), reduce dairy sales and make the milk glut even worse.
A Spoiled Industry It should also be noted that American dairy farmers have been frequently dumping milk long before the coronavirus. In 2016, The Wall Street Journal reported that:
"More than 43 million gallons worth of milk were dumped in fields, manure lagoons or animal feed, or have been lost on truck routes or discarded at plants in the first eight months of 2016, according to data from the U.S. Department of Agriculture."
Dairy farmers blame diminishing demand. Liquid milk consumption has been declining for decades. And foreign demand has suffered thanks to the recent trade wars.
But these factors have been present for a while now. Why does the overproduction persist? Why havent the farmers adapted by partially shifting to other agricultural products? A downward shift in demand does not alone explain chronic overproduction. For that, governmental support for the dairy industry is more likely to blame: subsidies, government-provided "margin insurance," minimum prices (USDA marketing orders), bailouts (like massive government purchases of surplus dairy products), and more.
In the wake of the coronavirus, such market-distorting support looks set to expand even further. As Gizmodo reports:
This week, dairy groups representing the Midwest wrote to the U.S. Department of Agriculture (USDA) and asked it to provide direct assistance to farmers and expedite the purchase of additional dairy foods amid the unprecedented disruptions in supply and demand caused by the coronavirus pandemic. Congress allocated $9.5 billion for agriculture producers impacted by the crisis under the CARES Act, the $2.2 trillion dollar coronavirus economic relief bill, among others.
During the Great Depression, government interventions impelled farmers to destroy crops and livestock even while American children were suffering from food deprivation and malnutrition. As the coronavirus lockdown continues to hogtie the economy, and as the government gets even more deeply into agriculture's business, let's make sure history does not repeat itself.
Until the government starts respecting farmers enough to let them stand in the market on their own two feet, there will be a lot more spilled milk to cry over.
Would make a lot of gubmint cheese...
I think it’s possible that you can’t get trucks to haul it, it’s currently quite difficult to impossible to get goods shipped by truck.
Milk, which has to be shipped quickly would be vulnerable to any delays.
That’s my guess
ANOTHER mega-STUPID brought to you by BIG GOVERNMENT!
Instead of processing it for long term storage (like cheese) they DUMPED IT????
Can this be blamed on Trump somehow?
I’ve had a hard time getting milk delivered through my several grocery delivery methods I rely on. Found some very expensive organic milk that I have to shake so the cream that rises to the top will mix in. It’s tasty but my 17 year old is skeptical.
Wish milk was easier to get via delivery, like the old milkmen of the past—I’d be willing to pay more for those millions of gallons being dumped.
My thoughts exactly.
I understand the producers don’t have the equipment for consumer goods, but they can’t sell the milk to a producer that needs it to fill the store shelves? I guess it isn’t as simple as it sounds.
Schools give out milk in the tiny cartons.
Stores in the 1/4 and 1/2 gallon jugs.
Military and large cafeterias use those big boxes that go in the milk frigs.
The demand for the tiny and large have dropped off the map. Not enough demand in stores for the jugs.
Because the Government wants us all to stay inside
and not see the (Too Shocking) arrests of high-end
pedophiles and the rescue of the mole-children that
have been confined in tunnels for so many generations
that they will need all those ventilators to learn to
breathe normal air.
Looks like a business problem. Are there no more entrepreneurs?
School milk, perhaps?
the price of milk is regulated by the government, I wonder if this has something to do with it?
Milk, use it or lose it........................
No, there are very few Americans left these days. Mostly just people cowering in fear.
Don’t most mammals stop milk after weaning? Ice cream is ok though.
And sales to major dairy export markets have dried up as the food-service sector largely shuts down globally
Gee, that’s too bad for China...
The refers are in New York City.
Someone I used to work with moved to Montana years ago. They could only get to the store about once a month or less, due to distance and weather challenges. She said she would just put whole gallons of milk in their big chest deep freezer, and it was fine later when thawed, just shake it up, and it’s good for a couple weeks or so.
I would think that 1% or skim would be even more likely to freeze well.
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