Dairy farmers have started dumping milk, a worrisome action for the dairy industry.
Farmers expected somewhat of a turnaround for market prices this year, but the pandemic has shocked the system, first with high demand, before consumers headed home under lockdown orders.
Mark Stephenson from the Center for Dairy Profitability says about ten large farms were initially asked to dump milk.
“They were larger farms and I suspect that some of that just had to do with the logistics and made it a bit easier to get the volume of milk that they needed off the system with a few larger farms rather than dozens of smaller ones. We often sell milk at something that’s called distressed prices, and that’s not milk dumping, we just find alternative markets where a buyer will take it a real discount and milk dumping indicates we couldn’t find that buyer. So, I think that’s a bit troubling for us right now.”
Stephenson says, demand appears to be the issue.
He says, demand appears to be the issue.
“I think the bigger problem is there’s just no demand for product. As everybody’s shut in homes and food service is shutdown, cheese sales have declined rather dramatically for some processors, not all, but for some. And that just means that they don’t want to make product that just sets in a cooler, they would just rather not have as much milk coming in.”
He says, milk production needs to decrease, but by how much is the question.
Milk production needs to decrease, but by how much is the question.