Dairies Forced to Dump Milk

Dairies Forced to Dump Milk

Tim Hammerich
Tim Hammerich
News Reporter
Here with your Market Line Commodity Report, I’m Tim Hammerich.

Some U.S. dairy farmers last week had to dump milk, with no place for it to go. The market has seen a sharp decline in prices in the past two months. Dwayne Faber is a dairy farmer in Washington.

Faber… “We've seen a complete collapse in the milk industry here with COVID-19. 30% of our milk product goes into food service and into the restaurant industry, and that's been decimated. Another 16% goes overseas in export, and that is not moving. That's being stored now in warehouses. We've gone from an $18 milk price to a $13 milk price in the matter of 60 days.”

Faber hopes these catastrophic events will also serve as a lesson to him and other producers on hedging a profit when possible.

Faber… “I had the opportunity to sell milk at $18 and I was too good for that. I was going to wait for $19. And then it went to $17 and it wasn't $18, so I left it alone. And then it went to $16 and a good friend called and said, well, what if this thing is for real? And so I did a put a whole bunch of insurance on and I've got some other coverage as well. And so, we are somewhat covered. It's not the $18 that we could have done, but it is something.”

May Class 3 Milk futures fell another $0.70 on Friday to $12.18 which is well below cost of production.

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