Coronavirus causing surplus of milk, financial hardship for dairy industry
Northwest Dairy Foods Association is seeking government’s assistance at state, federal levels.
Members of Northeast Dairy Foods Association Inc., North Syracuse, N.Y., as well as dairy producers and others in the food supply chain, have been greatly impacted by the coronavirus, putting the nation’s dairy farmers and milk processors business’ in great financial jeopardy. The association said it is seeking the government’s assistance at the state and federal levels to ensure the stability of the dairy industry through the COVID-19 pandemic and ease the economic burden that is being placed on the industry.
With schools and restaurants closed or greatly scaled back during this time, many dairy product orders for milk, cheese, yogurt and ice cream have been canceled. Additionally, the cancellation of orders at unprecedented levels has led to processors and producers having to dump loads of raw milk and, in turn, reduced the amount of milk being purchased from dairy producers, the association said.
While there is a lack of orders, dumping of raw milk will continue to increase, costing producers and processors thousands of dollars in wasted milk. One load of dumped milk is approximately $10,000 to the producer, and an equal amount is accrued by the processor and the distributors, the association noted. Dairy farmers and processors are having to dump hundreds of loads of milk and are bracing to continue dumping milk as uncertainty continues.
“While at the onset of the coronavirus hitting the United States, milk sales were strong as consumers were panic buying,” said Michael Suever, president of the board of directors for Northeast Dairy Foods Association. “However, as we have progressed the past couple of weeks, and schools and other food services have cancelled orders and the dynamics of the situation and economy continue to change, areas are seeing an excess amount of milk, which unfortunately has no other option but to be dumped. The industry needs assistance in order to survive this pandemic.”
The decline of foodservice dairy sales due to restaurant closures has not been offset by an increase in retail supermarket sales, the association said. The net decline in dairy sales is estimated to be in excess of 10%, and milk will continue to get dumped given these unfortunate realities. The dairy industry is in immediate need of support.
Processors, manufacturers and dairy producers are deemed essential services, and continue to work and make safe, high-quality food and beverages and maintain the food supply chain. The loss of contracts and sales will have a massive negative financial impact on these companies and dairy farmers, and potentially cause irreparable economic and financial damage, with implications such as laying off employees or going out of business. Northeast Dairy Foods Association said it has submitted letters to various state and federal representatives expressing the severity of the current over surplus of milk in the market place and the ramifications it has on the dairy industry, and requesting public funding to keep the industry stable.
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