Milk Dumping In The 1930's Depression Era
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 o’clock 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 isn’t 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 aren’t 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 can’t 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 haven’t 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.
Hard to spin up a business in a week. Which is basically what you’ve got to do to acquire, package and distribute milk before it spoils.
Sadly, its the wrong product, in the wrong place.
I know a dairy that has production lines to pack in jugs, for supermarkets, and also small cups or cartons - for schools, airlines, etc… Supermarkets don’t want this type of packing.
the former production line is going 110% capacity, and they can’t get enough caps and labels, etc… from their supplier. While the latter is just sitting idle.
It means their business is still down 40%, and they can’t take all the milk their farmers produce.
Really depends on if a cheese plant or fluid milk plant is nearby.
Hate to see milk dumped.
Too bad they can't sell to some nearby hog farms.
Your post 11 was random, bizarre AND hilarious. If you pulled that from some movie or book I’m not aware of it.
Thanks for making my day friend. LOL!
I get weekly milk deliveries. The milk I get, although a touch more expensive, is local and superior than just about any milk I’ve had.
I have neighbors in both the rail and trucking industries. They are still working, yet they see shutdowns coming as freight becomes undeliverable due to factory and retail closings. Rail is starting to get clogged in urban classification yards and ditto for truck terminals. If freight cannot be accepted it sits and plugs the conduits.
Milk Dumping In The 1930's Depression Era
Whenever I see people acting irrationally against their own economic well being I assume one of two things is at work: they failed to prepare to take advantage of opportunity (i.e they lack the resources) OR the government inhibits them from taking advantage of opportunity
We have that kind of milk available at the store and the flavor is fantastic! They aren’t taking the bottle returns right now so it is back to plastic gallon jugs for now.
the prices of most food items where i am seem to be stable, except for eggs which went up a lot
I have neighbors in both the rail and trucking industries. They are still working, yet they see shutdowns coming as freight becomes undeliverable due to factory and retail closings. Rail is starting to get clogged in urban classification yards and ditto for truck terminals. If freight cannot be accepted it sits and plugs the conduits.
Always cheaper in the long run to rent the cow.
"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."
Sounds like one of the first things companies would try to do is to get S&R areas opened so they can accept freight.
You may not be that far off.
Got information yesterday from another guy who works for Wisconsin Tissue Corp. Said that the warehouse is so full of TP and Paper Toweling they cant hardly find anywhere to put it.
I got cousins in the paper industry in Wis and they are all saying the same thing.
Now you tell me what the hell’s going on?
I can believe that, I am in the car business and getting anything shipped from the east coast is impossible at the moment.
Milk shortages are long gone from our stores. It probably helps that the Inland Empire CA still has plenty of Dairy’s. Although a lot have moved to Central CA and took advantage of the prices of their land being offered by Home developers. (And regulations)
one difference is that TP will keep, so it can be sold sometime, milk doesn’t keep so well.
I have a good friend that sells alfalfa, largely to dairies in the eastern US. Every city has to have a dairy within about 150 miles or so, but land is too expensive to buy and seed with alfalfa, so they buy trailer loads of it 600 miles away.
The distribution network is clogged right now. With reduced staffing almost everywhere off loads are taking longer. With general reduction in retail a lot of stuff just has no where to go. Meanwhile the brokers that arrange load transportation are into serious lowballing right now. Generally offering around 50 cents a mile, which is about half of what most folks need for a run to be profitable. When you lose less money sitting than hauling, things aren’t going to haul.
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