Demand for milk going down the drain during coronavirus

2020-04-20 | The Tribune-Democrat

April 20-- Apr. 20--Just a few weeks ago, Vale Wood Farms was, as usual, producing half-pint containers of milk that local school districts and day-care centers served to children.

Then, suddenly, the world changed.

In mid-March, Pennsylvania closed its education institutions in an attempt to slow the spread of the coronavirus pandemic. A statewide stay-at-home order soon followed. Restaurants became limited to take-out and delivery only. Families were eating more meals at home.

Regardless of the change, though, Vale Wood's 200 cows kept producing milk day after day. So, the family-owned business in Loretto needed to modify its production, reducing the number of half-pints and increasing items for home delivery, such as butter, sour cream, cottage cheese, yogurt and ice cream.

"The mix is different," said Carissa Itle Westrick, Vale Wood's director of business development. "If you would have checked a month ago, we were selling a lot more milk in half-pints, for instance, to schools and day cares, that kind of thing.

"So now folks are staying home. We make our own yogurt, for instance, that for us is more of a home delivery item.

"Well, now we've had to transition to making a whole lot more yogurt because now it's a product that's become a lot more popular because people are staying home and not wanting to venture out to a store."

Vale Wood has been able to make the transition because of doing onsite processing, while operating its own supply chain.

For other farms in the hard-hit dairy industry, the pandemic has been devastating.

'Supply chain issue'

With schools closed, the demand for milk has plummeted. But, with the cows still producing the same volume, some dairy farmers have had little choice but to dump their product. Dairy Farmers of America, a dairy co-operative, estimates U.S. farmers might be pouring away up to 3.7 million gallons of milk per day.

"Dairy farmers are really struggling when you're watching all of your profits go down the drain, literally and figuratively, when they're actually dumping the milk," Cambria County Farm Bureau President Tommy Nagle said.

U.S. Rep. Glenn "G.T." Thompson, R-Centre County, ranking member of the House Agriculture Committee's General Farm Commodities and Risk Management Subcommittee, explained why the dairy industry is being particularly hurt.

"Most recently, our processors have begun to direct the producers, the farmers, to begin to dump milk," Thompson said.

"Part of it is a supply chain issue. Milk, as a commodity, has a shorter lifetime of freshness than some other agriculture commodities do, obviously. The (pre-virus) demand for milk is greater than ever."

Dairy was struggling even before the pandemic, with the price dropping from $25 to $26 per 100 gallons in the fall of 2014 to a monthly average of $16.99 in 2019 due, in large part, to changes in milk consumption habits. The price is $16.64 in April, down 82 cents from the previous month, according to the U.S. Department of Agriculture.

"I am certain of a couple things," U.S. Sen. Bob Casey Jr., a Democrat, said during a tele-town hall on Thursday. "No. 1 is there are few areas of agriculture or few areas of our economy or workforce that have suffered more over the last at least 15 years if not longer than dairy farmers and dairy farm families.

"And we've had a number of federal initiatives over many years now to try to help.

"And it's been trial and error, and trial and error. Lately, there has been some new initiatives that I think have been helping.

"In the last Farm Bill, for example, there was a new dairy initiative, which is helpful. Because of the challenge they're facing now that this terrible virus and the disease COVID-19 has led to a huge over-supply, which hurts the bottom line of the dairy farmer and adverse consequences when you have milk being dumped, we have to deal with that circumstance."

Some 'needed relief'

A few years ago, the Center for Dairy Excellence and Pennsylvania Department of Agriculture created a "Dairy Development Plan" that called for capitalizing on branding and marketing, expanding agriculture infrastructure, improving regulatory processes and business climate, broadening workforce and education opportunities, investing in infrastructure, and diversifying products.

But, now, many dairy farmers are in basic survival mode, trying to deal with the pandemic.

As part of the $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act, the Office of the Secretary of the Department of Agriculture received $9.5 billion and the Commodity Credit Corp. was replenished with $14 billion.

"Congress' forceful, bipartisan action to take unprecedented steps to combat the economic fallout of the coronavirus crisis is a balm to dairy producers who have endured brutal weeks and may do so in the weeks ahead," National Milk Producers Federation President and CEO Jim Mulhern said in a released statement.

Mulhern said the NMPF is "eager to assist in its implementation to ensure that dairy farmers receive needed relief from the ongoing market disruption."

In response to the pandemic, the Center for Dairy Excellence set up a webpage at centerfordairyexcellence.org/covid-19-farm-resources to provide information, including about the virus' transmission, a fact sheet for dairy workers and prevention controls on farms.