Archive for Dairy Industry – Page 2

Surviving the Corona Virus in the Dairy Industry

It doesn’t appear to be a great year in the Dairy business. Futures after four year of poor milk price look horrible for 2020. How do you survive? The following are my recommendations in your survival plan.


Review your financial information from your accountant

Both Genske, Mulder & Company, and Frazer, LLC publish industry specific financial information by state. Review that information and see what aligns with your costs. I remember the old saying, “a penny saved is a penny earned.”

Review your feed costs

  • Take the time to evaluate your forage costs. Ask the question – what does it cost for you to grow forages? Part of this is to evaluate yields by fields. Pull out your weigh tickets or counts from last year. EZfeed and EZweights will give you this data automatically.
  • Consider target feeding different groups of cows. Fresh, High, and Low cow rations can be different with cost savings. However, if you lose milk in switching groups, evaluate that cost versus benefit.
    The length of time cows are on the Fresh cow ration should also be evaluated. Too often cows get lost in these pens which affects their yields.
  • Look at your shrink on feed. This is an area that most producers lose thousands of dollars.
  • Look at the efficiency of your commodity area. Shrink, labor, and fuel costs all need to be balanced.
  • Mineral supplementation is always a good place to look. My recommendation is to do a liver biopsy to check the status of minerals that are being stored, then adjust and retest.
    You can also target supplementation to different groups of cows. For example Fresh cows have different needs than Low cows. Minerals are usually over supplemented (do you take a vitamin every day?). If you can’t test or choose not to, you can do small trials where you back down the minerals and see what happens. Good records are a must if you choose to do this.
  • Review what the moisture levels were when you started or stopped the harvest.

Financial Strategy

The recommendations for Feed Management and Herd Management that follow are the essential strategies to make sure your costs are in check. However, you want to keep in good financial standing with your lenders. Communicate what you are doing with your lenders. Avoiding them is not recommended. It is important to lay out your plan and continue to update your lenders with your progress.

With our current COVID-19 circumstances, you can also apply to your local bank for the SBA 7a money. This can become grant money from the government. To get started, you will need the cost of your employees (including bonuses, regular pay, 401k, and health insurance). Also, you will need two months of interest and utilities costs.

Feed Management

I call this area the art of feeding and I would suggest that this has a bigger impact than the ration itself. Here you take a serious look at how you feed, and your feeding maintenance processes.

I recall looking at intake data on a herd in a hot humid area. After years of past struggles, they were able to maintain over 50 pounds of intake in the heat for the first time. When I asked the feed manager how he did it, his response was, “You challenged me to improve my feeding art.” Here are some things you can look at:

  • Work on reading the bunks. Some feeders can tighten this down and have nothing left.
  • How often do you need to feed? This is also a common question. The answer is at least once a day and push up every two hours. Once again it is a balance of labor, feed box size, and time.
  • Make sure the feed is smooth all the way down the manger. There should not be gaps or piles when starting or stopping.
  • Moisture levels are key in forages within a ration. Consider testing your forages at least twice a week.
  • Shake out your ration – see if you are mixing it correctly.
  • Check the moisture level of your TMR.
  • Do an audit of the TMR mixer. Scale weights need to be adjusted, knives get worn, and parts need to be replaced. This will save mixing time and fuel costs.
  • Consider chopping your hay. If you have tough, dry hay, chop it before mixing it. TMR mixers are built to blend hay, they are not typically meant to process hay.

Herd Management

Take the time to review your Herd. I typically look at the herd as biological machines in a factory. The manager determines how they are operating and how efficient they run.

  • Evaluate your parlor crews. The first step is to see if they are harvesting the same amount of milk on each shift. Look at their preparation, and then see if milk flows continuously after attachment. Look at start and stopping times for each pen and shift to see if the milking experience is the same each time. Calculate the turn time for the parlor and see if you have time to increase milking frequency.
  • Evaluate the reproductive performance of your dairy. Reproduction in the post RBST world is very critical to overall herd performance. I look at both pregnancy risk numbers and services per conception numbers. I find one is like the speedometer in your car – it shows how fast you are going, while service per conception is like the gear you are in. Now we all know that you can go fast in first gear, but it is not efficient. Take the time to evaluate breeders and your heat detection programs. Some dairymen can save money by dropping off systematic breeding programs, while others need to add a breeding program to get their cows bred. My rule of thumb is, If you go past the 150 DIM barrier and they are not pregnant, they will be culled.
  • Look for the invisible cows in your herd. These are cows that do not get sick, breed back, and never are seen. I always want a whole herd of invisible cows. Look for their opposite – which I call welfare cows. These are cows that always need help from someone to function. This list includes chronic mastitis cows, lame, slow milkers, chronically poor doers, and hard breeders. The question I always ask dairymen is, do you want more of this type of cow? The answer is of course no, so add Do Not Breed to their record, stop milking them, and get rid of them. Your herd management software can create and evaluate these groups.
  • Focus on good starts. Getting a cow to transition well is another critical component. To get an idea of this group, evaluate first milk and death rate in the first 30 and 60 days.
  • Quality milk is always a money maker and a quick return. Consider a high SCC pen that you can use as calf milk or put down the drain to maintain a quality bonus check.
  • Evaluate your treatment and hospital program. I have reviewed some dairymen’s hospital pens where only 25% of the animals remain in the herd after 6 months. This is not cost effective. Treatments can and do work, but poor results are typical of poor technique and poor protocols.
  • Evaluate your culling program. What type of animals are you getting rid of? Also, take the time to evaluate how they got to this state, or how breeding resulted in this kind of cow.
  • Young Stock is another hidden cost world. Most replacements do not make you money until late in the first lactation. Look at your death rates, culling rates, and overall costs. Should you be raising heifers at all with the surpluses of replacements in the market? Can you find another dairy that has surpluses – and make it work for you? One of my most successful dairymen in Idaho doesn’t raise a single animal.
  • The other common question is what about genomics? My answer is that if your heifer calves have a lot of pneumonia or scours, you are wasting your money. The other thing I would point out is, if you are not capturing value for your cows or heifers after genomically testing them, I would question it’s value.

While the current dairy market situation is very difficult, we all have things we can do to improve our production and financial situation.

Source: Amelicor

Chinese Dairy Imports Update – Apr ’20

Executive Summary Chinese dairy import figures provided by IHS Markit were recently updated with values spanning through Mar ’20. Highlights from the updated report include:

  • Chinese dairy import volumes increased on a YOY basis for the 16th time in the past 18 months during Mar ’20, finishing up 10.7% and reaching a record high seasonal level.
  • Chinese whole milk powder and skim milk powder import volumes remained higher on a YOY basis throughout Mar ’20, increasing by 7.0% and 20.4%, respectively. Mar ’20 Chinese dairy imports excluding whole milk powder and skim milk powder increased 10.5% YOY, reaching a record high seasonal level.
  • Mar ’20 Chinese dairy imports originating from within the U.S. and EU-28 gained market share from the previous year, while Chinese dairy imports originating from within New Zealand and Australia finished most significantly below previous year volumes.

Additional Report Details According to IHS Markit, Mar ’20 total Chinese dairy import volumes remained higher on a YOY basis for the 16th time in the past 18 months, finishing up 10.7% to a record high seasonal level for the month of March. 2019 annual Chinese dairy import volumes increased 13.7% on a YOY basis, reaching a record high level, while 2020 YTD import volumes have increased by an additional 1.6% throughout the first quarter of the calendar year. Chinese whole milk powder (WMP) import volumes increased 7.0% on a YOY basis throughout Mar ’20, reaching a four year high seasonal level, while Chinese skim milk powder (SMP) import volumes increased 20.4%, finishing at a six year high seasonal level. Mar ’20 Chinese dairy imports excluding WMP and SMP increased 10.5% YOY throughout the month, reaching a record high seasonal level for the ninth consecutive month. Chinese dairy import volumes originating from within the U.S. increased most significantly on a YOY basis throughout the month of March, followed by volumes originating from within the EU-28, while imports originating from within New Zealand and Australia finished most significantly below previous year volumes. Chinese dairy import volumes originating from within New Zealand continued to account for 40% of all Chinese import volumes experienced throughout Mar ’20. The U.S. market share increased to 9.5%, up from the 6.1% market share experienced during March of 2019. Mar ’20 Total Chinese Dairy Import Volumes Increased Seasonally From the Previous Month Mar ’20 Chinese Dairy Import Volumes Increased 5.8% MOM and 10.7% YOY Mar ’20 Total Chinese Dairy Imports Reached a Record High Seasonal Level Mar ’20 Chinese WMP Import Volumes Declined 27.5% MOM but Remained up 7.0% YOY Mar ’20 Chinese WMP Imports Reached a Four Year High Seasonal Level Mar ’20 Chinese SMP Import Volumes Increased 7.0% MOM and 20.4% YOY Mar ’20 Chinese SMP Imports Reached a Six Year High Seasonal Level Mar ’20 Chinese Dairy Imports Excluding WMP & SMP Increased 24.2% MOM and 10.5% YOY Mar ’20 Chinese Dairy ‘Other’ Imports Reached a Record High Seasonal Level NZ & the EU-28 Each Accounted for Over a Third of All Mar ’20 Chinese Dairy Import Volumes Mar ’20 EU-28 & U.S. Shares of Total Chinese Dairy Imports Finished Higher YOY Mar ’20 U.S. Share of Total Chinese Dairy Imports Increased Most Significantly YOY Chinese Dairy Imports From the EU-28 and NZ up Most Significantly Over the Past 12 Months

Source Atten Babler Risk Management

America’s Food Security in Danger as Dairy Farmers Become Broke

What’s happening right now in the dairy sector is the equivalent of the Titanic slamming into an iceberg. The problem is, instead of trying to patch the hole and save the ship, the U.S. Department of Agriculture is investing in new lifeboat cushions due to insufficient resources.

The USDA’s much-trumpeted $2.9 billion bailout for the dairy industry basically ignores the farms that are most critical to maintaining the national milk supply.

Recent news reports claim that USDA officials will purposely misappropriate distributions to large dairies, leaving many of the country’s top milk producers teetering on the edge of collapse.

Considering that the U.S. Small Business Association says a small business, depending on your industry, could be defined as a maximum of 250 employees or a maximum of 1,500 – depending on your industry – you have to wonder what the USDA is thinking and who is exactly crunching their numbers.

The general rule of thumb is one employee per every 100 cows, so to even reach the low end of the small business employee limit, a single farm would have to be home to 25,000 cows. That is simply not reality.

These “larger” family farms are really small businesses in every sense of the word, but the USDA seems to be playing politics with them and the futures of all the families who have members working at these farms.

It won’t take much to cause a landslide. Once just a handful of these farms go under, the damage to the country’s food chain will be immediate and devastating. Shortages of vital dietary foods — cheese, butter, etc. — will be everywhere. Parents who have never given a second thought to the abundance of food at their local grocery store will, for the first time, send their children to bed hungry.

The USDA must not implement payment caps. In virtually every other sector — be it banking, airlines, manufacturing, etc. — federal aid has been based on COVID-19’s impact on the business and national security. Only agriculture has been subject to payment caps regardless of financial ruin caused by the virus. The implications of this policy, if moved to fruition, is frightening. The New York Times recently summed it up in a single headline: “’Instead of Coronavirus, the Hunger Will Kill Us All.’ A Global Food Crisis Looms.” All farms together are the reason for the surrounding infrastructure in an area – processors, truckers, crop farmers – and once the farms, no matter the size, start to fall, all of these other nearby “small businesses” will start to hear their own death knell.

The federal government cannot make the audacious gamble that it can sustain the dairy industry and ignore the anchoring farms. Even the most cursory observer knows it’s an unsustainable option. The coronavirus will likely be the killing stroke to wide swaths of dairy that had not yet recovered from a 5-year downturn, fueled by trade wars and surging tariffs.

“About half the cheese we make in this country … 60 percent of the butter and about a quarter of the fluid milk goes into away-from-home outlets that have either entirely or mostly collapsed right now,” notes Paul Bleiberg, vice president of government affairs for the National Milk Producers Federation.

In the U.S. alone, the number of people already classified as “food insecure” is 37 million — about one in 10 Americans. That number is about to get a lot worse, unless Washington’s decision makers begin steering aid to the farms, regardless of size, best positioned to protect America’s food supply lines.

About The American Dairy Coalition:

The American Dairy Coalition (ADC) is a farmer-led national lobbying organization of progressive, modern dairy farmers. We focus on federal dairy policy.

China’s dairy demand returns

Fonterra Greater China interim chief executive Teh-han Chow believes the co-op’s sales there will be close to normal this month.

Quick-service restaurants and bakeries are reopening in China and customers are looking for indulgences after weeks of being locked away, Fonterra’s Greater China interim chief executive Teh-han Chow says.

Food service sales were hammered in the covid-19 lockdown of the most populous cities and provinces but began recovering in the second half of March.

Chow doesn’t yet have April figures but believes sales tonnages will return close to normal in May and June.

Some 95% of Starbucks and other western restaurants have reopened and cakes and pastries anbd cream-rich beverages like tea macchiatos are popular.

“The stores are open but their customer traffic hasn’t returned to normal yet.”

Chow appeared by video link from Shanghai with Fonterra chief executive Miles Hurrell in Auckland for a media conference.

He was in the United States on holiday when the covid-19 virus hit Wuhan and Chinese cities began to impose travel restrictions.

His family remained in the US when he returned to China to lead 1800 employees through the lean months of January, February and early March.

No Fonterra staff in China, including nine Wuhan residents and all the China Farms workers, got covid-19, he said.

Fonterra’s consumer product sales in China through electronic channels soared before and in the first few days of movement controls.

“We saw some panic buying and stocking up on infant formula, butter, cream cheese and cream.”

During the lockdowns the Anchor Food Professionals chefs recorded and broadcast items aimed at food service customers and stuck-at-home consumers.

They drew hundreds of thousands of viewers, Chow said.

The lockdown was a time to try new things, some of which might not work.

Fonterra ingredient sales and shipments to China remained steady over the first quarter of 2020 though customs and wharf clearances slowed.


Europe Rebuked for Unfair Dairy Trade Practices in New USTR Report

The U.S. dairy industry applauds the U.S. Trade Representative (USTR) for firmly rebuking the European Union (EU)’s protectionist dairy trade policies in its annual U.S. Special 301 Report, released today.

The U.S. Dairy Export Council (USDEC) and the National Milk Producers Federation (NMPF) endorse USTR’s findings that the EU has erected a complex regime of trade barriers that harm opportunities for U.S. exports to Europe. In addition, the EU has aggressively sought to restrict U.S. exports in global markets by weaponizing geographical indications (GIs) protections and blocking the ability of U.S. suppliers to use common names to market cheeses such as fontina, gorgonzola, asiago and feta.

“USTR has rightly taken Europe to task for their destructive and unfair campaign against American-made dairy exports, and in particular the high-quality cheeses produced by the dedicated men and women of the U.S. dairy industry,” said Tom Vilsack, president and CEO of USDEC. “I commend USTR for its recent actions to defend U.S. dairy and successfully negotiate groundbreaking GI provisions in both USMCA and the Phase One deal with China. USTR must continue to build upon this excellent precedent by making it a top priority to secure further commitments from our trade partners in future trade negotiations.”

The Special 301 Report found that “…the EU pressures trading partners to prevent all producers, other than in certain EU regions, from using certain product names, such as fontina, gorgonzola, parmesan, asiago, or feta. This is despite the fact that these terms are the common names for products produced in countries around the world.”

“Rather than trying to compete on a level playing field, Europe has tried to effectively institute a blockade of U.S. dairy,” Jim Mulhern, president and CEO of NMPF. “This is unacceptable and harms America’s dairy industry and the rural communities our farmers and processors support.

The dairy industry stands in full support of USTR’s efforts to confront EU’s anti-trade and anti-competitive policies and we will continue to proactively press for the full dismantlement of these trade barriers.”

USDEC and NMPF filed comments with USTR urging the U.S. government to confront the EU’s trade agenda against U.S. dairy in order to protect American jobs as well as the legitimate rights of U.S. food manufacturers, farmers and exporters.

The National Milk Producers Federation, based in Arlington, VA, develops and carries out policies that advance dairy producers and the cooperatives they own. NMPF’s member cooperatives produce more than two-thirds of U.S. milk, making NMPF dairy’s voice on Capitol Hill and with government agencies. For more, visit

The U.S. Dairy Export Council (USDEC) is a non-profit, independent membership organization that represents the global trade interests of U.S. dairy producers, proprietary processors and cooperatives, ingredient suppliers and export traders. Its mission is to enhance U.S. global competitiveness and assist the U.S. industry to increase its global dairy ingredient sales and exports of U.S. dairy products.

NMPF Calling for Adequate Aid for All Dairy Producers, Citing Analysis

A new economic analysis projecting a 58 percent decline this year in net cash income for U.S. dairy farms due to coronavirus-related market disruptions further demonstrates the need to eliminate a proposed $125,000 payment cap in federal disaster assistance, according to Jim Mulhern, president and CEO of the National Milk Producers Federation.

As highlighted at the Texas Ag Forum yesterday, dairy losses will outpace those for cattle, cotton, and feed grains and oil seeds, with catastrophic losses for all producers. For example, a dairy of 1,000 cows in Wisconsin will see net cash income decline by $500,000, while larger operations in Texas and Idaho could see losses in the $1.2 million range, according to the analysis.

Average net cash income losses in dairy would be $345,000. The USDA assistance package for agriculture announced April 17 caps payments to producers at $125,000 per commodity. Many dairies only produce milk.

“Analysis shows what the dairy community already knows – the COVID-19 crisis presents grave danger for all dairies, from small operations to the producers whose milk nourishes the majority of U.S. consumers and keep supply chains running,” Mulhern said. “We have raised our concerns over payment limits with both President Trump and USDA, and with the Administration making important decisions in how it allocates aid, it’s important to highlight the very real impacts that lower support levels will have on dairy producers and the communities they serve.”

NMPF is supporting efforts by lawmakers and allied organizations to increase aid to producers and estimate losses and compensation in ways that reflect the true scale of damage to the farm economy. Last week, a bipartisan group of 126 House members and 28 Senators sent letters to the administration urging that this problem be solved.

The letters were spearheaded by Senators Jerry Moran (R-KS) and Dianne Feinstein (D-CA) and Representatives Jimmy Panetta (D-CA), Mike Simpson (R-ID), Jim Costa (D-CA), Dan Newhouse (R-WA), Henry Cuellar (D-TX), Fred Upton (R-MI), Xochitl Torres Small (D-NM), and Roger Marshall (R-KS). The House letter is available here, and the Senate letter is available here. NMPF’s letter to President Trump is here.

The National Milk Producers Federation, based in Arlington, VA, develops and carries out policies that advance dairy producers and the cooperatives they own. NMPF’s member cooperatives produce more than two-thirds of U.S. milk, making NMPF dairy’s voice on Capitol Hill and with government agencies. For more, visit

Canada’s dairy processors stand to lose $100M if USMCA takes effect July 1

A Canadian senator says the federal government has betrayed the country’s dairy processors by allowing the U.S. to activate the new North American trade deal on July 1 — a month earlier than expected.

A Canadian senator says dairy producers will suffer if the new U.S.-Canada-Mexico trade deal goes into effect July 1. (Ryan Remiorz/The Canadian Press)

The federal government has betrayed Canada’s dairy processors by allowing the United States to activate the new North American trade deal on July 1 — a month earlier than the industry was expecting, the Opposition leader in the Senate said Tuesday.

Sen. Don Plett warned the country’s 470 processing facilities, an industry that employs more than 24,000 people and contributes $18 billion annually to the Canadian economy, stand to lose upwards of $100 million if the U.S.-Mexico-Canada Agreement takes effect as scheduled.

That’s because the dairy industry’s “quota year” for a number of key products begins in August, and many of the terms of the agreement are tied directly to the production calendar. Enacting the deal in July would mean that Year 1 — a 12-month period the industry was counting on to adjust to the new landscape — only lasts 31 days.

“We’re not talking small adjustments,” said Mathieu Frigon, president and CEO of the Dairy Processors Association of Canada.

“We’re talking adjustment to products, portfolios — the product mix of my members, so that means that requires often plants retooling, new products, you have to find a new market. Now we’re left to do all of this basically within 30 days.”

Conservative Senator Don Plett says producers could lost $100M if the agreement goes into effect one month early. (Chris Rands/CBC)

The new USMCA opens up to U.S. producers some 3.6 per cent of a Canadian dairy market that had previously been exclusively available to domestic producers — a change that some producers have predicted will carve a $240-million chunk off the industry’s bottom line.

It also requires the elimination of a pricing system that restricted American imports of certain products, including skim milk powder, milk protein isolates and infant formula, while at the same time restricting Canada’s ability to export those same products into the U.S. market.

Adding insult to injury, Frigon added, is that all of this comes at a time when both processors and dairy producers are already feeling the brunt of the impact from the COVID-19 pandemic.

“It has a multiplier effect, you know, in the current business environment.”

‘Completely inexcusable’

In exchange for agreeing to fast-track the government’s implementation bill last month, with COVID-19 bearing down on North America, Plett said Conservatives in the Senate received a “guarantee” from the governing Liberals that the USMCA, which is also known as CUSMA north of the border, would not go into effect before August.

But late last week, U.S. Trade Representative Robert Lighthizer served notice to Canada, Mexico and Congress that all three parties to the deal had finished their necessary domestic housekeeping, starting a clock that makes the deal the law of the land on the first day of the third month after the final country provides notice that its internal processes are complete.

By giving its own notice on April 2, Canada gave the U.S. the power to decide when the agreement would take effect, Plett said.

“The government’s latest decision to move ahead with CUSMA on the backs of our dairy processors in the middle of a global pandemic is completely inexcusable,” he said in a statement.

“How can Canadians trust that the government is doing everything it can to protect and defend the Canadian economy when they are willing to give up on one of the founding industries in our country?”

Plett called the change in timing, particularly in the throes of the pandemic, a betrayal of the Canadian dairy industry. And he suggested that tensions between Ottawa and Donald Trump’s White House forced the government to make concessions.

“One has to wonder if the government was forced into this weakened position with our biggest trading partner as a result of the prime minister’s overall mismanagement of this crisis, and his strained relationship with the Trump administration.”

Compensation promised

In a statement late Tuesday, the office of Deputy Prime Minister Chrystia Freeland defended the government’s handling of the agreement, reiterated a promise to compensate the dairy sector and denied Plett’s claim that the government ever promised a specific timeline for the deal taking effect.

“Amid the COVID-19 pandemic, it is essential that we preserve and position our economy for the recovery — including our essential and privileged access to the U.S. market. We preserved and protected supply management in the face of U.S. demands to fully dismantle it,” said Katherine Cuplinskas, Freeland’s press secretary.

“Any assertion that there was a guaranteed entry-into-force date is incorrect; the agreement states it will enter into force on the first day of the third month after all three countries ratify it.”

Dan Ujczo, a lawyer who specializes in Canada-U.S. trade issues at the firm Dickinson Wright in Columbus, Ohio, pointed out that the federal government bought Canada an extra month of time by waiting until early April to serve notice to the U.S. and Mexico, making it impossible to meet Lighthizer’s own preferred timetable of June 1.

“I thought Canada actually played it masterfully by issuing its certification on April 2, because that addressed the issue of making sure it was July 1, not June 1 … and combated USTR concerns that Canada was dragging its feet,” Ujczo said.

“I think Canada had always kind of indicated that it was going to push this as far as it could, but I don’t think there was ever a direct commitment that Aug. 1 will be the date. I think it was more, ‘We’ll give it the old college try.”‘

While dairy producers are obviously a vital component of the industry, the processing side of the equation is often overlooked — and continues to be, Frigon said.

“As I always say, a viable, sustainable supply management system needs both a viable farming sector, and a processing sector. And we often forget about the latter part, and that’s really unfortunate.”


A new White Revolution: How COVID-19 could benefit the dairy industry

When the entire nation continues to be under lockdown due to the Covid-19 pandemic, our dairy industry has proved to be more resilient than many other sectors in terms of the extent of supply chain disruptions. Millions of our animal-owning households, the majority being smallholders, particularly those connected to producer-centric institutions continued to milk their cows and buffaloes, and sell the surplus to the village milk collection centres. Milk was then pooled, cooled, and transported to processing centres where it was pasteurised, packaged and dispatched to thousands of marketing outlets, finally finding its way to millions of homes.

Of course, during the initial phases of the lockdown restrictions, both milk procurement and sales of milk were impacted in several parts of the country due to supply chain disruptions. Information collected by National Dairy Development Board (NDDB) from the dairy cooperatives (see graphic) shows a decline in daily liquid milk sales by dairy cooperatives by about 15% in the Covid-19 lockdown period between March 1-15 and April 8-14, and a drop in the proportion of sales to procurement by about 8.8% during the same period. The liquid milk sales are showing signs of steady recovery, thanks to the policy and proactive support of central and state governments, and the measures taken by producer-centric organisations to address supply chain challenges.

Disruption seems to have impacted the unorganised private players significantly as they have a higher share of products in their sales portfolio compared to the dairy cooperatives. It was, therefore, quite logical that the areas/milk sheds where private players had a stronger presence, milk got diverted to the dairy cooperatives as a result of which, producer price also got subdued due to the imbalance between demand and supply

As news started trickling about supply chain disruptions, governments, both central, and some states, swung into action to ameliorate the situation. These interventions included making available low-cost working capital to producer-owned institutions to convert milk into skimmed milk powder (SMP) and milk fat, direct procurement of surplus milk for conversion and direct distribution to needy people.

To enhance the marketing of milk and milk products, many dairy organisations, initiated home delivery of milk and milk products through mobile carts, vans, e-commerce, etc. All these measures helped stabilise milk sales, opening up opportunities to use e-commerce. Many smart and progressive dairy farmers converted their surplus milk into khoa, paneer, ghee, etc, and sold it to the neighbourhood markets through informal channels. All these measures helped sustain dairy industry.

Covid-19 pandemic has thrown up the real possibility for our dairy industry to benefit as large sections of consumers may shift from meat-based to dairy-based protein. Covid-19 has made people more aware of the need to adopt a healthy diet.

In contrast to sectors like construction, manufacturing, hotel, travel & tourism, etc, which were severely hit by the lockdown restrictions, dairy industry seems to have done remarkably well. Globally, Covid-19 impact has pushed many large commercial dairy farms even in the most dairy developed nations to the brink of closure, prompting governments to announce bailouts. Recently, Trump administration announced a bailout package of $15.5 billion for the US dairy industry. The US is contemplating to purchase milk, convert it into commodities which could be used as international humanitarian aid.

In the present context, it makes smart business sense for our dairy industry to increase milk procurement for making SMP to meet the growing demand for milk and milk products. Milk procurement, during Covid-19 lockdown, despite market shocks indicates that dairies have started building up commodity stocks to meet lean season requirements. The stock of SMP as on April 1 was higher by about 25,000 MT as compared to March 1, and the estimated daily average SMP production has increased from 790 MT during March 1-15 to more than 1,000 MT during April 8-14.

India may consider reducing GST on ghee and milk fat, from 12% to 5% to bring it at par with the GST rate for SMP. This has been a long-standing demand of the dairy industry and will ultimately benefit milk producers, increase rural incomes, spur demand and hasten economic recovery.

During these difficult times of the dairy farmers, our cows and buffaloes must be taken care of, as any compromise on their feeding and health care would impact reproductive efficiency and productivity. Both governments and dairy cooperatives should provide these inputs and services to the farmers on subsidised rates or deferred payments basis. The country cannot afford to go through another phase of supply disruption resulting in pressures on availability and prices of milk.

Covid-19 crisis has witnessed reverse migration of labour force from urban to rural areas leading to social disruptions. On the positive side, we can look at this as an opportunity; these workers can be encouraged and incentivised to join their family agriculture/dairy farms.

The author is Chairman, National Dairy Development Board (Views are personal)


CWT Assists with 2.4 Million Pounds of Dairy Product Export Sales

Cooperatives Working Together (CWT) member cooperatives accepted seven offers of export assistance from CWT that helped them capture sales contracts for 191,802 pounds (87 metric tons) of Cheddar, 83,776 pounds (38 metric tons) of butter, and 2.094 million pounds (950 metric tons) of whole milk powder. The product is going to customers in Asia, Central and South America, and North Africa. The products will be delivered from April through August 2020.

CWT-assisted member cooperative export sales contracts for 2020 total 16.076 million pounds of American-type cheeses, 4.268 million pounds of butter (82% milkfat), 1.960 million pounds of anhydrous milkfat, 2.439 million pounds of cream cheese and 16.338 million pounds of whole milk powder. The product is going to 24 countries in six regions. These sales are the equivalent of 436 million pounds of milk on a milkfat basis. Numbers vary from previous reports due to cancellations.

Assisting CWT members in moving dairy products overseas through the Export Assistance program is critical during the challenging times U.S. dairy farmers and cooperatives are facing. The Export Assistance program helps in strengthening and maintaining the value of dairy products that directly impact producers’ milk price. The program is helping member cooperatives grow and maintain world market share for U.S dairy products and is a significant factor in maintaining the total demand for U.S. dairy products and the demand for U.S. farm milk.

Dairy product and related milk volume amounts reflect current contracts for delivery, not completed export volumes. CWT pays export assistance to bidders only when export and delivery of the product is verified by required documentation.

All dairy farmers and dairy cooperatives should invest in CWT. Membership information is available on the CWT website.

The Cooperatives Working Together (CWT) Export Assistance program is funded by voluntary contributions from dairy cooperatives and individual dairy farmers. The money raised by their investment is being used to strengthen and stabilize the dairy farmers’ milk prices and margins. For more information about CWT, visit

Hardship payment for UK dairy farmers considered

The government is understood to be considering a hardship payment for dairy farmers after warnings tens of thousands of cows could be slaughtered.

Demand for dairy products in the hospitality sector has dropped with the closure of many cafes and restaurants.

George Eustice will discuss the issue with senior Tories, while talks with MPs and trade reps are due on Tuesday.

The Department for Environment, Food and Rural Affairs said it had relaxed competition law to help the industry.

It also said that farmers could access existing financial support measures.

The coronavirus outbreak has led to problems for the dairy industry, with some farmers forced to discard milk.

Whitehall sources have indicated that officials are now looking at the idea of a hardship fund, which could take the form of a targeted time-limited payment for badly affected farmers.

The former environment secretary, Owen Paterson, said: “There is an urgent need for some form of rapid hardship fund for the minority of dairy farmers, who temporarily have no market for their milk, to avoid seeing cows slaughtered.”

Conservative MP Sir Geoffrey Clifton-Brown said he believed a targeted, time-limited payment could cost £10m to £20m.

“I don’t want to see tens of thousands of cows slaughtered unnecessarily due to coronavirus,” he said.

The chair of the Welsh Affairs select committee, Stephen Crabb, said he understood why Defra wanted to take time to assess the problem but “the time for action has come”.

“Some kind of hardship payment does need to be made available for the farmers most affected.”

He added: “The issue of slaughter has been raised by local farmers. It doesn’t appear that it’s likely to happen tomorrow but could, if the right action isn’t taken, be a longer term consequence.”

Chris Loder, the Conservative MP for West Dorset, said: “The government must act urgently to provide a hardship fund to support dairy farmers in desperate need to avoid any culling of the national herd.”

The National Farmers Union, Dairy UK and the Provision Trade Federation have proposed action including targeted grant support and a scheme whereby some cows would effectively be “furloughed”.

‘Perfect storm’

It’s understood that, during recent conference calls, industry members have raised a “doomsday scenario” of 80,000 cows being culled – out of a national herd of nearly two million.

However, that figure has been downplayed by some including Sir Geoffrey Clifton-Brown, who described such a number as “highly unlikely”.

The plunge in demand from the hospitality sector comes as UK milk production approaches its annual seasonal peak.

Phil Langslow, chair of the Provision Trade Federation, described the situation as a “perfect storm”.

Mr Langslow, who’s also a director at County Milk Products, estimates that 20m litres of liquid milk a week would normally have been going into the food service with only around 20% of that market still viable during the current lockdown.

In a letter to MPs last week Mr Eustice said: “Between 5% and 10% of total milk production goes to the food service trade and there is therefore a small proportion of milk production that currently has no home.

“The vast majority of Britain’s 10,000 dairy farmers continue to supply their contracts at the usual price.”

But Mr Eustice’s letter has attracted criticism from some industry figures.

“I haven’t heard a single farmer who thought that was accurate,” said Joe Stanley, Leicestershire NFU’s vice-chair.

He claimed that the government had “vastly underplayed” the problem.

A Defra spokesperson said the government was working closely with the NFU, Dairy UK and other stakeholders.

“We have already relaxed competition laws to allow the dairy industry to reroute surplus milk and adapt to changes in the supply chain.

“We also welcome the initiative from milk suppliers and their farmers to temporarily reduce the amounts they are producing, through a range of options, so that when the demand returns it can be met by our dairy farmers.

“We will continue to work with the industry to understand the potential impacts on farmers and also urge them to access the existing package of government financial support available.”


OVID-19 pandemic has put dairy farmers in a tight spot

At the start of the year, things were looking up for Skagit County’s dairy farmers, with milk prices trending upward after five years of low prices.

The COVID-19 pandemic has reversed that, sending milk prices plummeting and disrupting markets. Markets for restaurants and schools — shut down to stem the spread of the virus — have collapsed, and the industry is rushing to reroute dairy products to grocery store shelves.

The massive shift in the supply chain has forced farmers throughout the country to dump excess milk, but dairy farmers in the Pacific Northwest appear to have avoided doing that — for now.

Darigold, which processes and sells milk from farmers who are members of the Northwest Dairy Association cooperative, has not had any farmers dump milk and doesn’t anticipate that will happen, Stan Ryan, president and CEO for Darigold, said in a written response to questions from the Skagit Valley Herald.

The dairy co-op has 26 members in Skagit County.

Ryan said the company has upped shipments of dairy products to grocery stores to meet rising demand, but it’s not enough to offset financial losses from major customers such as schools. He said exports of products such as milk powder and bulk cheese have also declined due to disruptions in global trade.

Meanwhile, farmers in Skagit County are bracing for less money in the coming months.

In January, farmers were receiving $19 and close to $20 per 100 pounds of milk, a price slightly above the cost to produce the milk, said Jason Vander Kooy, owner of Harmony Dairy west of Mount Vernon.

Since the pandemic began, the price has fallen to between $11 and $12 per 100 pounds.

Vander Kooy said farmers will start to feel the impacts of lower prices in May and June, when checks arrive for milk produced earlier in the spring. If the price continues to drop, farmers could be looking at an almost 50% reduction in income, he said.

“As long as people are still eating, we will survive,” he said. “It’s tough to wake up in the morning and know it’s going to be a struggle. It just adds a lot more stress.”

Don McMoran, director of the Washington State University Skagit County Extension, said the price drop may push some farms that were barely surviving over the edge. He said he knows of three county dairy farms planning to sell their cows this year.

Chris Sybrandy, owner of Legacy Dairy near Conway, said no dairy in the country will be able to survive if milk prices remain as low as they are forecast to go in the coming months.

“We hope that those prices won’t hang around for more than a month or two,” he said.

Organic dairies, on the other hand, are in a better position.

“People who buy organic milk take it back to their house, whereas conventional milk is in coffee stands, restaurants and schools,” said Alan Mesman, an organic dairy farmer outside La Conner.

He said organic milk prices have been low for years, but unlike conventional milk, they’re not getting any worse.

Farmers have the option to buy insurance to protect their margins when milk prices fall.

However, few farmers opted into the Dairy Margin Coverage Program — one insurance program offered by the U.S. Department of Agriculture (USDA) — in anticipation of a strong market and higher prices in 2020, the American Farm Bureau Federation wrote in an analysis on its website.

A USDA spokesperson wrote in an email that there are no plans to immediately reopen the insurance program for enrollment, but there is other support available to farmers.

Last week, the USDA announced a $19 billion food assistance program that will include direct payments to farmers who have lost income due to the pandemic, and the purchase of dairy, meat and fresh produce for food banks and other organizations, according to an April 17 USDA news release.

Though farmers may get some help, there is no easy fix for the shake-up in the supply chain. Milk once intended for wholesale buyers must now be bottled. Hundred-pound wheels of cheese will have to be sold in smaller quantities in grocery stores.

“It’s not like there’s no food out there,” Vander Kooy said. “It’s just the connection between food and consumers. It’s borderline chaos. There’s plenty of food, but how do you get it to consumers? I hope things turn around and get better. We definitely don’t want them to get worse.”


Shannon Guirl Represents New Approach to Telling Dairy’s Story

With more than a decade of experience in video production and social media management, Shannon Guirl has been selected as the new Sr. Manager of Integrated Communications for the Oregon Dairy and Nutrition Council (ODNC). In this newly created role, she will be responsible for reaching multiple audiences with engaging visual storytelling and content about Oregon’s dairy community.

Amidst an ever-changing media landscape, the competition for attention is constant. Combine that with the fact that many consumers are increasingly disconnected from agriculture and where their food comes from, and it becomes immediately evident why ODNC prioritized this new position.

“We always say dairy needs to do a better job of telling its story, from sustainable farming practices, to exceptional nutrition, to the economic benefits and beyond,” said Josh Thomas, Sr. Director of Communications for ODNC. “But it isn’t just about telling more stories, it’s about telling the right kinds of stories and in the right ways – and increasingly, that translates to visual storytelling on digital platforms.”

As a freelance editor in New York, Guirl worked on broadcast, cable and documentary productions for NBC, A&E, Discovery, CNN and Reuters among others. She also worked in corporate communications for UNICEF, TED Talks and Etsy. Most recently, Guirl owned and operated a lighting design studio in Portland specializing in making handcrafted lamps. She holds a degree from the University of Southern California, where she graduated from the School of Cinematic Arts.

“In addition to Shannon’s strong technical expertise in visual and digital communications, she brings creative vision and a natural enthusiasm to our team,” said Pete Kent, Executive Director for ODNC. “We’re excited that her work with ODNC will help us build understanding, trust and sales for dairy in new and engaging ways.”

EU dairy support in the COVID-19 crisis

Most criteria address cow welfare and animal feed. (© Keystone / Martial Trezzini)

The time to act is NOW!

While large parts of the economy have come to a sudden standstill, the dairy sector makes every effort possible to keep shelves and fridges stocked in Europe. The designation of milk and dairy as an essential sector and the associated EU measures including guidelines on the green lane border crossings and free movement of workers, have already helped substantially in maintaining functioning supply chains across regions and borders.

We are grateful to EU Commissioner Janusz Wojciechowski following Wednesday’s announcement that exceptional measures would finally be opened by the EU Commission to support the dairy sector in Europe. This is a first step that is appreciated as this COVID-19 induced crisis has the potential to become the biggest dairy crisis in decades.

Swift action is needed!

In today’s more than difficult situation, the dairy industry is operating: we are collecting the milk of the around 700,000 dedicated dairy farmers in the Union, keeping our committed workforce of 300,000 employed people and remaining more than ever the economic backbone of rural Europe and beyond. We do so largely at a loss.

We ask the EU Commission to implement Wednesday’s proposals immediately.

The announced €30 million scheme for Private Storage Aid for skimmed milk powder, butter and cheeses can only be the first step – a first small step financed by unused funds under the existing DG AGRI budget. “The scale of the crisis outdoes the possibilities of the current budget”, as EU Commissioner Janusz Wojciechowski confirmed in his discussion with the European Parliament on 15th April 2020.

EU agriculture and EU dairy, with its – recognized – essential societal role today and its future role in the recovery phase, especially in rural Europe, cannot be the only sector in the Union where support is limited to residual budget funds and to today’s pre-COVID Multiannual Financial Framework.

The first measures have to be implemented immediately, and the EU support must be ramped up to the scale of this crisis and to the importance of the dairy sector.

This support is vital for the EU dairy sector and central to EU economic reboot and revival.

Source The European Dairy Association

Wyoming dairy farm thriving despite economic uncertainties

Burnett Enterprises, out of Carpenter, WY, is one of Wyoming’s eight to ten dairy farms. It is still thriving, despite economic uncertainties.

According to the NASDAQ stocks, the price of milk has dropped roughly nine points from November 2019. A small number, compared to the DOW Jones Industrial and S&P Stocks. But the number is still significant for farmers and ranchers.

“You’ve got to remember the American farmer is a resilient, tough son of a gun,” said Jeff Burnett, owner of the dairy company. “They’re always out there to produce high quality, nutritious food, and they’re an optimist. Our family is included in that.”

According to Burnett, around 50% of dairy produce goes to schools and food services, but those activities are restricted due to the COVID 19 pandemic. Some dairy farms in Wisconsin have had to dump thousands of gallons of milk, due to the decreased need. Nationally, it’s roughly 55,000 pounds of milk per day, equally to about 10% of milk produced daily.

Burnett Enterprises has not had to dump any of it’s milk produce.

They have also expanded their business, building a new milking parlor in November 2019. The parlor can milk an additional 800 cows.

“It’s a huge mental weight when you work so hard to produce such a high quality product, and your intentions are there to feed hungry people, feed America, and feed the world,” said Burnett. “That’s the American farmer’s dream, and here we are. All of our hard work’s going down the drain.”

The family owned and operated dairy farm started in 2004, and they are milking about 4,500 cows, with 50 employees.

“On one shift, we have five employees and three robots. That’s all it takes. We milk three times a day, and we’re producing about four to five semi loads of milk every day,” said Reese Burnett.

Reese, Jeff’s son, is a sophomore at Kansas State. With virtual schooling, he is receiving more education from the first hand experience of working for the family dairy company. their business is a 27/7 operation that runs 365 days out of the year, and their main concern is keeping the cows happy.

“What we need to make sure that consumers understand, is that if our cows aren’t comfortable, they’re not going to be producing milk like they should be to their genetic potential,” said Reese. “It’s our job to make sure they they’re always comfortable and always have full feed and clean beds to lay down in, and are happy cows”

Burnett enterprises is FDA inspected, and according to Burnett, the milk goes through four to five quality assurance tests before being consumed by the public.

To mitigate the potential spread of COVID-19 in their parlors, the company has closed their office doors and employee break room, and have cleaned common areas more thoroughly.


New Mexico dairy industry drowning in glut of milk

The COVID-19 pandemic is choking New Mexico’s dairy market, forcing many farmers to throw surplus milk into irrigation ponds.

It’s a cruel double whammy.

The statewide shutdown of schools and restaurants, which are large buyers of dairy products, have contributed to a steep drop in demand for milk. Facing a glut, dairy farmers are dumping mass quantities of their product just as a growing number of jobless people struggle to feed their families.

“It’s an absolute nightmare situation,” said Charlie DeGroot, a partner in Three Amigos Dairy in the town of Dexter, south of Roswell. “There’s a lot of concern about the fact that we’ve got these food lines, food banks and all of that, and milk is being dumped.”

DeGroot said he hasn’t had to dump a load yet but knows farmers in Lovington, Las Cruces and other dairy-producing areas are tossing excess milk.

“No one wants to see it go to waste,” said Beverly Idsinga, executive director of Dairy Producers of New Mexico. “For all that hard work to go to waste is heartbreaking.”

Farmers aren’t literally throwing the milk onto the ground, Idsinga said. They put it into lagoons to help irrigate pastures or crops, or they feed the milk to calves, she said.

Still, it’s milk that isn’t being sold, which hurts dairies that are already losing money as milk prices plummet, she said.

New Mexico is the nation’s ninth-largest dairy-producing state. About 140 dairies produce 8.3 billion pounds of milk, which inject $1 billion into the state’s economy, according to 2018 data.

Those numbers are certain to fall this year.

In January, milk prices were forecast, based on futures, to be about $18 per 100 pounds going into May, Idsinga said.

Then the pandemic hit. Prices are now about $12 — well below the $15 that farmers need to break even, she said.

The average dairy in the state has 2,400 cows, so many of the farms are losing hundreds of thousands of dollars a month, DeGroot said.

The U.S. Department of Agriculture has earmarked $30 billion in relief money for the nation’s dairies, he said.

The industry wants the money dispensed at a flat rate per 100 pounds of milk produced, DeGroot said. But federal officials have proposed putting a $250,000 cap on what a dairy receives, which will barely compensate for the losses of larger operations.

The pandemic has slammed an industry that already was grappling with a milk surplus, DeGroot said. Demand for beverage milk has declined for 20 years as fewer people drink milk with dinner and pour milk on breakfast cereal, he said.

Most of the milk Americans consume is in products such as cheese, yogurt and ice cream or additives in food, he said. Dairy companies now make less beverage milk, which, combined with shoppers’ panic-buying, has led to empty milk racks in stores.

Schools are the largest buyer of beverage milk, so shutting them down has had a hefty impact on that market, said state Sen. Cliff Pirtle, R-Roswell, who owns a dairy farm.

Restaurants closing have hurt overall dairy sales as well, Pirtle said. Plus, stores have limited how much milk customers can buy to curb hoarding, he said.

“All of those things combined have created this surplus,” Pirtle said.

To reduce surplus, the Greater Southwest Agency, made of the region’s two cooperatives, imposed a production limit on dairies.

New Mexico dairies now get full price only on 90% of their March volume, DeGroot said. For any milk they sell above that threshold, they’ll only be paid about 10% of the current price.

Cutting production is tricky because you can’t simply stop milking cows or it hurts them, Idsinga said.

Cows’ milk will dry up after about 30 days of lactation. That’s when you can sideline some to produce less milk, DeGroot said.

Meanwhile, the dairy industry is working with state and federal agencies to find other uses for surplus milk, including at food banks, DeGroot said, adding the process is much more complicated than it might seem.

Farmers can’t simply truck their raw milk to food banks, he said, because some people might have adverse reactions to the unpasteurized milk.

That milk must be processed or made into products such as butter and cheese.

However, the big challenge is reworking the long-established production and distribution system, he said.

“You can’t suddenly convert a $400 million cheese plant into a fluid-milk plant,” DeGroot said.

Raw milk also has a short shelf life, limiting how much you can keep on hand, even in cold storage, and how long it can be transported, Pirtle said.

It would be more practical to convert it to powdered form, both to export and to donate, Pirtle said.

DeGroot said he believes when the pandemic passes, there will be greater opportunities for the U.S. to export dairy products to South America and other parts of the world where markets have collapsed.

“But between now and then, it’s going to be a bloodletting,” he said.


Illinois dairy farms adapting to decline in demand

The closing of schools and restaurants has created a major decrease in the demand for dairy items, but Illinois dairy farmers say that has not resulted in the dumping of excess milk seen in many states.

An estimated 2.7 million to 3.7 million gallons of milk could be dumped each day because of decreased demand, according to the Dairy Farmers of America.

Milk prices had been depressed for the past four years and the COVID-19 pandemic could stymie what farmers hoped would finally be a rebound year for the industry, however.

The excess in milk is due in part to how difficult it can be for farmers to reduce the amount of milk that young cows produce.

Tasha Bunting, associate director of commodities and livestock programs at the Illinois Farm Bureau, said farmers could look at methods such as changing feed rations to “dry out” cows and lower the amount of milk produced.

Don Mackinson, president of the Illinois Milk Producers Association, said he does not think milk dumping is a widespread issue in the state. He credited the work of the dairy processing facilities to adapt to new demands for reducing the need to go to such an extreme.

But dairy farmers have had to scale back their herds and a new distribution model needs to be worked out, Bunting said.

The loss of demand has also been felt on the side of dairy processing facilities, which have made shifts in production, Mackinson said. Processing facilities have been producing fewer gallon jugs and more containers of other sizes.

The Illinois Milk Producers Association is working to inform grocery stores and markets that the difficulties created by the coronavirus have not led to a milk shortage. Mackinson said stores should not limit how much milk or dairy products a customer can buy, even if they are putting limits on other items to avoid panic-buying.

“There is no need for any grocery store to be limiting the amount of milk or dairy products that customers can buy,” he said.


8000 gallons of milk donated to New York families and seniors

American Dairy Association North East (ADA North East) helped coordinate logistics, communications and distribution of two trailer loads with nearly 8,000 gallons of milk donated by Dairy Farmers of America (DFA) in Syracuse, N.Y., on Wednesday, April 22. The need for food assistance is drastically increasing and the dairy industry is ramping up efforts to help get milk to families in need.

DFA, a national cooperative owned by dairy farm families across the U.S., teamed up with Dean Foods processing plants in the northeast and ADA North East to organize a drive-thru distribution location at the Destiny USA Mall provided 4,700 gallons of milk with two gallons given per car. Nearly 2,200 cars passed through the line.

The Syracuse City School District received 1,998 gallons for its students’ families, and Onondaga County residences for seniors received 1,078 gallons of milk from the delivery.

“Getting milk to families whose resources are minimal during this time of quarantine is so important for their wellbeing,” said ADA North East CEO Rick Naczi. “Partnering with other dairy industry leaders is an ideal way to make this happen, while also benefits our dairy farmers and the industry as a whole.”

“As a dairy cooperative owned by family farmers across the country, we are dedicated to helping provide nutritious food for family tables,” said Jennifer Huson, Senior Director Marketing, Council Affairs and Industry Relations for DFA Northeast.  “Knowing that millions of Americans are struggling right now to make ends meet and with food banks being a critical local resource to help feed those families, we knew that we had to figure out a solution.”

About American Dairy Association North East

American Dairy Association North East (ADA North East) is the dairy farmer-funded organization funded by participating dairy farmer’s checkoff investment to build demand and sales for milk and dairy foods throughout the local region. Representing more than 10,000 dairy farm families in Delaware, Maryland, New Jersey, New York, Pennsylvania and northern Virginia, ADA North East develops and implements local programs to drive milk and dairy sales at retail outlets and in schools. The organization also conducts consumer education about dairy through events, traditional and social media, and in collaboration with health professionals through National Dairy Council®. ADA North East works closely with Dairy Management Inc.™, the national dairy checkoff organization, to support nutrition research, national partnerships and developing export markets for dairy to bring a fully integrated promotion program to the region.

About Dairy Farmers of America

Dairy Farmers of America is a national, farmer-owned dairy cooperative focusing on quality, innovation and the future of family dairies. While supporting and serving more than 13,000 family farmers, DFA works with some of the world’s largest food companies to develop ingredients that satisfy their customers’ cravings while staying committed to social responsibility and ethical farming. 

Pennsylvania’s dairy industry has future, despite shrinkage, damage from COVID-19 outbreak

The COVID-19 outbreak is hitting Pennsylvania’s beleaguered dairy industry hard, and sadly, there is a segment that will not be able to sustain more economic body blows. However, the long-term outlook for dairy appears to be stable in the state, according to a Penn State Extension expert.

But don’t expect it to look the same as it has.

The novel coronavirus crisis will complete an “irrevocable” change in Pennsylvania’s dairy industry that is, understandably, seen as negative by people wishing that things could return to the way they were, explained Dave Swartz, assistant director for animal systems programs with Penn State Extension

“The pain in the ag sector is incredible, and emotions are running high with producers and their families, who are really stressed,” he said. “There’s going to be some restructuring of the industry, but the long-term outlook is strong because of Pennsylvania’s geographic position.”

Not long ago, Pennsylvania was one of the top milk-producing states in the country. But hundreds of dairy farms in Pennsylvania were not able to maintain their competitiveness and disappeared from the state’s dairy industry over the past 18 months. 

“Dairy farms across the nation look much different from our farms in Pennsylvania,” said Swartz. “Most of our nation’s milk comes from herds of more than 500 cows. In Pennsylvania, our average herd size is roughly 85 cows. Over the past decade, the dairy industry in Wisconsin, Michigan and Texas have consolidated into larger herds or have had large increases in milk production.”

Most of our nation’s milk comes from herds of more than 500 cows, however in Pennsylvania, the average herd size is roughly 85 cows. And the small dairy farms are having trouble competing in the face of low milk prices.

Today, Pennsylvania ranks seventh in milk production, producing just a fourth of the milk generated by leading state California.

Before the COVID-19 outbreak, milk demand in the U.S. had been growing steadily for years. Demand for dairy products such as cheese, butter, sour cream, yogurt and ice cream has been increasing, even as fluid milk consumption has plunged. However, American dairy farmers have been pushing more milk on the market than needed. As a result, low milk prices in recent years have put many Pennsylvania dairy farms out of business.

The COVID-19 outbreak is expected to eliminate even more, said Swartz, creating a perfect storm for Pennsylvania’s dairy industry.

“Around 2017, American consumers started to eat out more,” he said. “More dollars were spent in restaurants and for take-out food than were spent in grocery stores. The restaurant trade uses a high proportion of dairy products in their menu selections, so the dairy industry greatly benefitted from this trend.”

But in the face of COVID-19, restaurants were forced to close, and demand for dairy products crashed. And when schools were shuttered, the leading driver of fluid milk sales, students, also disappeared. These sudden supply chain disruptions have been tragic — across the country, hundreds of tanker trucks full of milk have been dumped. The heart-breaking spectacle continues today, often caught in news photos and videos, because cows keep making milk.

There is no telling how long the current situation will go on. Still, it’s certain many dairy operations with uncompetitive cost-of-production levels in Pennsylvania and beyond will not endure, Swartz pointed out. However, the long-term outlook for dairy production in the Keystone State seems hopeful.

“There are some general things that exist in the marketplace that are very positive for Pennsylvania agriculture,” he said. “We are in as good a position geographically as any state’s ag industry. Our agriculture is located near huge populations. We have many neighbors close by who need to eat.”

Going forward, Pennsylvania will have a small number of really large herds that are extremely efficient in producing tanker loads of milk every day, as well as smaller farms and dairies that are adept in connecting with consumers and producing more regional- and local-type products.

IMAGE: Dave Harp, Chesapeake Bay Foundation, inset, U.S. Department of Agriculture

For Pennsylvania’s dairy industry to pull through, it must figure out a way to lower the cost of production and improve, enhance and expand local and regional food networks, Swartz contended. He suggests that the COVID-19 crisis has advanced that initiative. 

“As people start to become less secure about whether there will be food in grocery stores, they are searching for alternative places to get food,” he said. “And Pennsylvania producers are in a great position to fulfill that need.”

However, to survive financially, dairy producers must change the way they do business, Swartz maintains. In the future, the state is likely to have a bifurcated — or two-track — look to its dairy industry. 

“We will have a small number of really large herds that are extremely efficient in producing tanker loads of milk every day, and we will have more smaller farms and dairies that are adept in connecting with consumers and producing more regional- and local-type products,” he said. “It’s a real positive that we’re located near the East Coast, where we can put our products in front of millions of consumers.”

To help all dairies prosper, Penn State Extension offers a range of programs. It helps farmers with business management, calculating costs of production, looking for ways to be more efficient and productive. Extension also helps dairy farmers enroll in risk-management programs, which protect them from the severe variation in milk prices that can occur in the marketplace.

Extension assists small-scale dairy farmers interested in arranging further processing of products to capture more consumer dollars, and it helps farmers with enterprise analysis, calculating opportunity costs to determine how they can use their resources to generate more net income. 

New initiatives such as feeding dairy steers for beef production, putting up a broiler house for poultry production, establishing an on-farm market and agritourism ventures are analyzed.

In the wake of the COVID-19 outbreak, a new normal will emerge across our country, and many things — the Pennsylvania dairy industry included — must adapt, Swartz said. “Going forward, a 50-cow dairy simply selling milk at the wholesale price is not going to generate the cash necessary to bring a sufficient return to the owner, unless they are, in some manner, selling directly to consumers.”


‘Forgotten Farms’ Acknowledges Mid-Sized Dairies

It seems like the small boutique farms receive good press and the large monocropping farms receive bad press. The ones in the middle are largely forgotten. That’s what Sarah Gardner is trying to change. A professor at Williams College in Williamstown, Massachusetts, and associate director for the Center for Environmental Studies, Gardner teamed up with filmmaker David Simonds to create “Forgotten Farms,” a 60-minute film released in 2016 that shares the stories of mid-sized, multi-generation dairy farms of the Northeast.

Lorraine Lewandrowski, dairy farmer and county attorney for Herkimer County, New York, promotes farming under her Twitter handle @nyfarmer. She and a number of New York farmers traveled to New York City for a March 9 screening of “Forgotten Farms” with an audience of food bloggers, nutritionists, environmentalists and foodies. The next day, the farm representatives manned a booth at the International Restaurant Show at Jacob Javits Center where they distributed whole milk samples.

Sponsored by the Center for Ag Development and Entrepreneurship of Oneonta, New York, the event brought together food producers and food influencers.

“CADE works with the New York City watershed,” Lewandrowski said. “We wanted to showcase foods from the New York City watershed. A lot of that watershed is in farms.”

The screening aligns with the movement among residents of New York City to support farms in the watershed.

“People asked so many questions,” Lewandrowski said. “There’s a real need for farmers to connect with food leadership in New York City. They may mean well, but they don’t know about the issues we face. We wanted to talk about whole milk and issues we face. This leads us to realize we may need to give information.”

She noted one example was a coffee shop owner who wanted to support dairy farmers but felt pressured by an increasing number of customers requesting oat milk.

The film stars Northeast dairy farmers interviewed on their farms.

“Some of them are very colorful characters,” Lewandrowski said. “They talk about how they became farmers. They talk about how the local food movement tended to glamorize the young organic farmer growing vegetables and going to the city and ignore the massive number of dairy farmers in the Northeast. Some of us dairy farmers who’ve asked to speak at local farming events have been told no. Well, we are local. We send you milk 365 days a year.”

She added that at the restaurant show, many passersby didn’t realize that milk they purchased at the store comes from local farms or that New York boasts a big dairy industry.

Lewandrowski also said that the farmers in attendance took time to listen to the crowed — also important for building better relations between farmers and consumers.

Gardner said that she wanted to produce the film because of her strong interest in food systems.

“I have a great appreciation for the importance of local and regional food supply,” Gardner said.

She noticed that her students’ view of farming is that the ideal farmer is a tiny producer and not a large, commercial operation growing one product in the Midwest.

“I needed to convey to that generation that there is a form of commercial agriculture that is mostly mid-sized farms,” Gardner said. “They didn’t seem to know about them, even though here in our town we have three commercial dairy farms. They didn’t notice those farms existed nor did they appreciate the important role that mid-sized family farms (have) in contributing to the food supply.”

Grants and donations funded the film, which cost $75,000 to produce. Simonds and Gardner donated their time on the three-year project, which Gardner calls “a labor of love.”

“We wanted to show the human side of agriculture, that it’s about farmers and it’s about their farms, most of which have been in business for multiple generations,” Gardner said. “You really need to see that. You need to meet the people to understand the value of that. You can’t just go to college and then say, ‘I’m going to be a dairy farmer’ and start farming. It’s generations of accumulated knowledge, know-how, equipment, barns, fences and soil quality. You can’t do it in one generation. Some people do start dairy farms, but for the most part, they’ve been in business for many generations.”

She said that while sharing the farmers’ stories, she felt that “some are cuddly and approachable, others are prickly and ornery. But you have to appreciate them once you get to know them. They’re so capable. Their knowledge and competencies are incredibly valuable, especially in this day and age when 95% of us can’t do anything with our hands. We could have called it ‘Forgotten Farmers’ because they’re completely devalued.

“Being unappreciated is the best they get. They get accused of mistreating animals, poisoning people with their milk and ruining the environment. And then they go broke. People who can produce necessary products for society need to be valued.”

Gardner also wants to promote the merit of milk over what she calls “fake milk,” the beverages derived from plants, which she also calls “a marketing scam” because she said that they detract from dairy consumption.

“If they’re not being hurt by low milk prices or being accused of polluting a water body, it’s this,” Gardner said. “What else can come down the pike to make their lives hard? It’s amazing anyone is still dairy farming. They’re in it still out of some passion or belief in what they do.”

She’s also eager to point out that the mid-sized dairy farm, which can provide local milk, has a lower carbon footprint and is sounder environmentally.

So far, the film has been viewed at 125 screenings at educational institutions, independent theaters and commercial venues. At each, Gardner invites local dairy farmers on the stage so people can meet them and ask questions. Sometimes, the Q&A session goes on for an hour after the film.

“In New England and I think in New York, most of the farmland is in dairy or crops for dairy,” Gardner said. “It’s important for the future of our land base to keep dairy farms in farming. I truly believe that we need local and regional food supply. I don’t think the model of importing foods 1,000 miles from halfway across the country is a good model.”

Gardner said that in the past half-century, more than 10,000 dairy farms have shuttered in New England and fewer than 2,000 still operate. The trend is similar in upstate New York. Gardner believes that the COVID-19 pandemic may help more consumers realize the importance of local food.

“What (is needed) from a policy perspective is more infrastructure,” Gardner said. “Everyone says we have too much milk, but we have a distribution problem. In New England, we’re in a dairy deficit. Massachusetts only produces half the milk it consumes.”

Information about arranging a screening of the film is found at


New Zealand’s a2 Milk sees a spike in quarterly sales on consumer stockpiling

On 22 April, a2 Milk Co raised the outlook for its full-year core earnings margin as consumers stockpile goods during the coronavirus outbreak.

According to reporting in Reuters, the company’s raised earnings expectations comes as food retailers benefit from panic buying of essential goods ahead of mandatory lockdowns to curb the spread of COVID-19.

a2 Milk forecast full-year 2020 earnings before interest, tax, depreciation and amortisation (EBITDA) margin between 31 percent and 32 percent, from the previous range of 29 percent to 30 percent it had forecast in February.

As customers stockpiled the company’s products, particularly infant nutrition products sold in Australia and China, a2 Milk said revenue for the three months ended 31 March was above expectations.

The surge in sales was mostly through online and reseller channels, the company said.

A2 Milk’s revenue from China, accounted for in US dollars, was also boosted by a significant depreciation of the New Zealand dollar against the US dollar during the quarter.

These two factors, combined with lower-than-expected costs and a delay in planned recruitment due to the virus outbreak boosted the company’s results.

“We are unable to estimate the timing and extent to which pantry stocking may unwind,” the Auckland-based company said. “It is unlikely that these factors will be sustained as these unprecedented circumstances begin to unwind.”

The company added that despite uncertainty posed by the coronavirus pandemic, it expects annual revenue in the range of NZ$1.70 billion to NZ$1.75 billion.

Read more about this story here.

Rabobank dairy forecast predicts hit to incomes

The latest Rabobank dairy seasonal outlook report is grim reading with a predicted hefty hit to dairy farm incomes for the new production season starting in June.

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Photo: RNZ/Carol Stiles

It says farmers should work with a $5.60/kg milk solids which is at, or just below, an average farmer’s break even point.

This compared with Fonterra’s forecast for the season ending in May of $7 to $7.60.

Rabobank senior dairy analyst Michael Harvey said this forecast considered the whole of the next production season.

There was an upside with Chinese demand being stronger than anticipated and the dollar weaker, but Harvey warned Covid-19 meant the global dairy market would deteriorate and prices would fall and stay there for 12 months.

He cites the main reason as the peak milk production in Europe and North America being a month away and coinciding with a hit to dairy consumption.

*See all RNZ coverage of Covid-19

Harvey said customers around the world had been stocking up with dairy products which had been good for short term supply inventories, but that masked what was about to happen.

“We are working on the assumption of a three month shut down of food service channels around the world. In the EU and US (they’ve got) big pools of dairy so that’s quite a sizeable hit and that’s the imbalance we’re seeing in global markets … demand will be lower in the regions … and that is the imbalance we are modelling into our global view.”


US Dairy Groups Look To Milk Supply Management Amid Coronavirus Pandemic

As the coronavirus pandemic interrupts the food supply chain, some dairy industry groups are calling on the federal government to help scale back milk production.

Earlier this month, the National Milk Producers Federation and the International Dairy Foods Association proposed a voluntary supply reduction program for dairy farmers as part of a larger plan to respond to the impacts of the pandemic. 

The proposed program, called Market Balancing Assistance, would pay farmers a premium on their milk if they cut their production by 10 percent. 

In a proposal sent to the U.S. Department of Agriculture, the groups representing dairy farmers and processors suggested an additional $3 per hundredweight, or 100 pounds of milk, should continue through September if milk prices stay below $16 per hundredweight.

Many dairy industry groups have traditionally been against efforts to control the supply of milk as a way to keep prices at a profitable level.

But Mark Stephenson, director of dairy policy analysis at the University of Wisconsin-Madison, said these are not ordinary circumstances.

“There is no option right now except to reduce milk production. We can’t do this with simply lower market prices,” Stephenson said.

He said the dairy industry needs a way to entice all farms to produce less, or painfully low prices will force farms out of business all together.

The Wisconsin Farmers Union has been pushing for milk supply management practices since 2018, after a record number of the state’s dairy farms went out of business because of low prices.

Kara O’Connor, government relations director for the Wisconsin Farmers Union, said it’s “extraordinary” to see dairy groups like the National Milk Producers Federation calling for supply management, even just temporarily during the pandemic.

“There has been a growing acknowledgement in the dairy industry for some time that there’s a need for a permanent mechanism for balancing milk supply and demand,” O’Connor said. “The recent research that we’ve seen showing just how effective a permanent supply management would be is very promising. And especially if it applies to all dairy farmers nationwide.”

But Stephenson said the system that’s been proposed as a response to COVID-19 is not something that would be continued long term.

“This is really taking taxpayer money and just providing support for dairy farms. I don’t think that we would do that in ordinary times,” Stephenson said.

And not all dairy organizations support the idea of temporary supply management during the pandemic.

Aaron Stauffacher is associate director of government affairs at Edge, a dairy farmer cooperative based in Green Bay. His organization thinks dairy processors should be the ones to help farmers decide how much milk to produce.

“This is really hitting different aspects of our food and dairy demands differently,” Stauffacher said. “Players need to be able to facilitate a more targeted approach to their own supply chain rather than just kind of encompass the entire industry in kind of a broad overarching program.”

Stauffacher said the USDA should instead focus on providing direct relief payments to farmers to make up for market loss this spring.

Edge supports a proposal by the Minnesota Milk Producers Association for direct payments to farmers from the USDA. The program would pay $9 for every hundredweight of milk produced in March in one lump sum payment.

Stauffacher said his cooperative also supports partially reimbursing farms for milk they were forced to dump because of lost demand.

He said several Edge members have been part of a wave of Wisconsin farms who have been forced to dispose of excess milk. Stauffacher said his group doesn’t know the exact number of farms who have had to dump milk but affected producers are encouraged to report to the state Department of Agriculture, Trade and Consumer Protection.

Both Edge and the Wisconsin Farmers Union are also asking the USDA to purchase dairy products through federal food assistance programs as a more immediate way to deal with the oversupply caused by lost demand from the food service industry. 

Earlier this month, both organizations joined a coalition of Wisconsin dairy groups in calling on the USDA for action. The letter asked the department to purchase nonfat dry milk, butter and cheese with funding from the CARES Act, a federal coronavirus aid package approved in March.


A ‘gut punch’ for dairy farmers: COVID-19 downturn presents devastating crisis

Dairy cows gather in a barn at a farm within the GLOW region. Area dairy farms are facing a crisis of devastating proportions.

After years of suffering low milk prices and slogging through negative trends, 2020 was meant to be the light on the horizon for area dairy farmers.

They were seeking a beacon of hope and positivity, a small promise for a better tomorrow.

Rising all-milk prices — up $4.30 from the year prior — meant that, for the first time in a half decade, farmers would finally turn a small profit on their milk, not merely break even or, as had typically been the case, lose a large percentage on every dollar.

As farmers geared up their soils for spring plantings, the latest dairy market report from the National Milk Producers Federation highlighted “positive growth,” citing the continued improvement of dairy exports and a national increase in demand for milk and butter products.

“This started out as a good year for dairy farmers with strong milk prices,” said O-AT-KA Milk Products CEO Bill Schreiber. “That quickly evaporated.”

When cases of COVID-19, that deadly and pervasive global pandemic, exploded in major U.S. cities, leaders took action, ordering the shutdown of schools, restaurants and all non-essential businesses. They called it a ‘pause’ order, but as images of vacant city streets flickered on the nighttime television, portraying the ‘city that never sleeps’ as now cricket-silent, and highlighting the mass burials taking place in developed nations, the enormity of the situation settled in.

Life ground to a halt for most people, in most places.

But some things simply cannot be stopped — including life on local dairy farms, where neither livestock nor farmer has a way to scale back the production of its raw, perishable product.

“You can’t shut (milk) off,” said Rochelle Stein, co-owner of Stein farms in Le Roy and chair of the Genesee County Legislature. “You know the struggles of new mothers. A great deal of moms freeze their breast milk, and some of them donate because they can’t shut it off. That’s exactly what we’re dealing with here … Cows are cows. They’re going to milk. They’re going to produce as usual.”

Yes, even when demand for local dairy products has diminished significantly.

“Take a moment to think about all the cheeses, creams, and butters consumed when you dine out,” wrote Jodi Smith Kryzsiak, an economist at Upstate Niagara Cooperative, in a special market update issued earlier this month. “Now, just wipe away those orders — they’re largely gone.”

Estimates suggest that about half of all butter and cheese is sold through restaurants when they’re fully operational, while 7 percent of fluid milk goes to area schools. Now, with the closures that have forced some diners and establishments to shutter their doors, and still others to serve modified take-out only menus, “The orders from these entities are fractions of the typical volumes that flow through those channels,” Smith Kryzsiak wrote.

Now, area farmers are left with as much as 72,000 pounds of milk per day — a full tractor-trailer load — that may soon have no place to go.

“I am aware of farms that have been told to dump their milk into their digesters because there is no processor willing to process that milk on a given day,” Stein said. “Here, we are proceeding as usual because we are members of a cooperative and they have contracts to fulfill. We are very fortunate right now that we have not had any milk turned away.”

But Stein warns that could change in an instant.

“We are always at risk today, with less demand for dairy, to be told that there is nobody to process the milk.”

Then comes the dumping and disposal — even at “lifelines” like O-AT-KA, a dairy processing plant employing hundreds of workers.

“We’re the last stop,” Schreiber said. “There is no place else for that milk to go if we can’t process it.”

“We have had some milk dumped,” he admitted. “Very minimal. We did it one time.”

Thus enter the disheartening images and devastating videos that have begun to swallow the web — thousands of gallons of fresh milk gushing from milk trucks and into manure pits and mud — all of it wasted.

Some estimate that farmers are dumping as many as 3.7 million gallons of milk each day — 10 percent of all milk in the country going “into the lagoon or the digester or the manure pit,” Schreiber said.

“That’s 1,100 truckloads of milk a day hitting the ground.”

But with empty grocery store shelves and companies like Wal-Mart placing strict limitations on the purchase of products like milk and butter, how could this be happening?

Well, said Steve Ammerman, public affairs manager for the New York Farm Bureau, it’s certainly no fault of the farmers.

“This has been a confusing time for people who see empty store shelves and people in need, but then see farms having to dispose of their product,” he said. “It comes down to the major disruption across the food supply chain.”

While the need for products offered to our schools and restaurants has plummeted, demand in grocery stores has jumped — up 50 percent since the onset of the crisis, Ammerman said.

Producers simply weren’t prepared for a change-up of this magnitude.

“If the processor that was accepting a farm’s milk processed in bulk for the food service industry or small cartons for schools, they lost much of their customer base,” Ammerman said. “They cannot quickly change up processing lines and packaging needs and supplies to target different consumers.”

“Farms also typically don’t pasteurize, process and bottle milk themselves or keep cold storage capacity beyond a day or so,” he continued. “The cows don’t stop producing and there may be no place for the perishable milk to go at that point other than for it to be properly disposed of or land applied.”

And so, with no place left to go, it’s dumped.

But there are measures that can be taken to alleviate some of this waste.

“For grocery stores to be limiting the purchase of dairy foods today is an injustice to the fact that there is enough dairy to fill that grocery store shelf with dairy products,” Stein said. “There is no need for those limitations.”

And especially not when many area farms are already on their last legs.

“The past four to five years, the farmgate price for milk per hundredweight has been less than the cost of production,” Stein said. “Dairy farmers have been working on their equity … they had positioned themselves to make good, efficient investments in their business and they were just scraping to make ends meet.”

“All of the single-shot type of financial moves that people could make, they’ve already made,” she said. “The question becomes, where’s the next hole in your belt? How much more can you tighten down?”

In 2018, when prices per hundred pounds of milk were as low as $13.39, cooperatives thought the situation so dire that they sent suicide prevention letters with the monthly milk check.

Since the COVID-19 crisis, prices have plummeted about 30 percent owing to the supply chain disruption. Mere months ago, they’d been above $18 for the first time in years.

Prices are now about $12, Stein said: “well below the cost of production for most farms.”

And it happened almost overnight.

Officials, ranging from Stein herself to the U.S. Dairy Export Council President, have called the scenario devastating: “A kick behind the knees.” “A gut punch.”

Those viral images of gushing milk serve only as insult added to injury — each gallon representing endless hours of hard work and toil.

“Milk is what pays the bills,” Ammerman said.

As it’s literally dumped down the drain, the realities prove a worst nightmare for the “very quiet, humble backbone of most communities.”

“There is still too much milk than what the system can absorb right now,” Ammerman said. “Farmers have no control over that decision.”

Things are no different here in the GLOW region.

Though dairy farmers are putting their best foot forward in regard to innovation, finding ways to put milk into feed programs and to ensure that no drop is wasted, the ultimate decisions are out of their hands, Stein said.

And though she and all area farmers are doing everything in their power to mitigate waste and devastation, the extension of the New York State Pause Order until at least May 15 is no good news.

Late spring months are “critical for cashflow on dairy farms,” as inputs are purchased to prepare for the next calendar year, Stein says.

Feed costs, including silage, haylage, seed, fertilizer and pest management tools, represent about 30 percent of milk check costs, while labor is 50.

“That leaves you 20 percent to do your electricity, your veterinary needs, your equipment repairs,” Stein said. “It’s not a lot. And if you’re carrying any debt load, you have to get that out of there, too. It’s a scary time. And we all feel a loss of control.”

“Farmers are very proud, independent thinkers,” she said “The fact that we own and operate our own businesses demonstrates how proud and independent we are. We don’t ask for help easily.”

But now more than ever, they need the support of the community.

“Do what you can to create a demand,” Stein said.

Add a few extra sprinklings of cheese to your slice of pizza. Order takeout cheeseburgers. When you go to the grocery store, splurge on the ice cream and that extra carton of yogurt. Check with local food banks and pantries to see if they have voucher systems in place, or are able to accept cold dairy products.

“That extra few ounces of cheese may not matter much to you,” Stein said. “But it matters very much to us as producers. We need to create a local demand so processors have a customer. The only way to do that is to move dairy off the shelves.”

Legislation is in the works to alleviate some of the strain. Local lawmakers have sent letters urging support. The New York Farm Bureau has written to USDA Secretary Sonny Purdue requesting direct assistance, milk voucher and food buyback programs to help those in need.

Recently passed stimulus packages added funds to emergency food assistance programs like SNAP and WIC. Nine-and-a-half billion dollars has been allocated to dairy and other commodities.

But none of this will prove enough to save every farm, Stein said. Not unless immediate action is taken.

“There will be devastation without a program put in place, without adjustments in some of the costs of the farm regulation here in New York State especially, where we are held to different standards of the cost of labor, the cost of environmental capacities, the taxation,” Stein said. “The landscape will change, and not for the better. There’s a reality check today.”

Schreiber, too, shared a foreboding outlook:

“I don’t say this lightly,” he said. “Not everybody is going to survive, in terms of their business. Not everybody is going to come out the other end.”


UK dairy industry pulls together to manage milk supply through COVID-19

Government announces a temporary relaxation of UK competition law to support the dairy industry through the coronavirus outbreak.

The intention is that the industry will work together to address current market challenges, avoiding waste and maintaining productive capacity to meet future demand.

With the UK’s dairy farmers producing over 40 million litres of milk every day, the legislation, which will be laid shortly, will allow the industry to adapt to changes in the supply chain including decreased demand from the hospitality sector and reduced collection by retailers who have had to close.

The government has already relaxed competition rules to allow retailers, suppliers and logistic services to work together. While this has already allowed the dairy industry to redirect some of their supplies to retailers, this announcement will enable further collaboration between dairy farmers and producers so they can avoid their surplus milk going to waste and harming the environment.

This could include sharing labour and facilities, cooperating to temporarily reduce production or identifying where there is hidden capacity in the supply chain for processing milk into other dairy products such as cheese and butter.

Dairy UK and the Agriculture and Horticulture Development Board (AHDB) will now lead work to bring the industry together to identify spare processing capacity, how to stimulate demand and how production could be temporarily reduced.

Environment Secretary George Eustice said:

“Our dairy industry plays a crucial role in feeding the nation and it is essential that they are able to work together at this time.

“We’ve heard loud and clear our dairy farmers’ concerns which is why we are further suspending competition rules law to allow dairy farmers to work together on some of the most pressing challenges they are facing. I am also urging farm businesses to access the loans that are available from their bank to support them in this period.

“We welcome our farmers’ heroic efforts in ensuring food supplies remain resilient and will continue to support them through this difficult time.”

The dairy sector is the UK’s largest farming sector, with milk accounting for 16.85 percent of total agricultural output in the UK in 2018.

Of this, approximately 50 percent of UK dairy sector output is fresh milk and as such accounts for a significant amount of UK processing capacity.

The government encourages any farm business facing difficulties to access the range of support which has been put in place to help businesses manage this challenging period. This includes the Coronavirus Business Interruption Loan Scheme farming businesses can access. The government has been speaking to the banks and they are ready to support farm businesses as best they can.

Alok Sharma, Business Secretary said:

“COVID-19 presents an enormous challenge to the country. We must be adaptable and help businesses implement creative solutions to new problems.

“Temporarily relaxing competition law for the dairy sector will mean farmers can work together to minimise waste of milk, and use it to make other essential dairy products.

“This important step will help our dairy farmers weather this storm, providing support to a key sector in the British economy.”

Today’s announcement will help ensure this fresh milk does not go to waste, supporting industry to adapt to a temporary reduction in demand by collectively identifying opportunities for processing milk into storable milk products such as butter, cheese and skimmed milk powder.

The UK’s food supply chain remains resilient and the Environment Secretary continues to meet regularly with representatives of the food and farming industry to ensure people can get the food and groceries they need.


Dairy industry faces months-long economic recovery

Even though the state agriculture department has said multiple times the market is starting to correct itself, dairy farmers in Missouri and across the country are looking toward one of the most challenging summers in recent memory. (Noah Brown/KRCG 13)

Farmers for the last few months have been facing tough markets as demand chains have fluctuated drastically following stay-at-home orders.

Even though the state agriculture department has said multiple times the market is starting to correct itself, dairy farmers in Missouri and across the country are looking toward one of the most challenging summers in recent memory.

Vetter Farms in New Haven, Missouri, has been one of the lucky ones and has managed to avoid the worst of COVID-19.

“It hasn’t affected us because we ship to Prairie Farms and they say that all the milk is still getting shipped through and it’s going through their plants pretty well,” Maria Vetter said.

Even though they’ve dodged milk-dumping, Cliff Vetter, Maria’s father, said he understands they’re probably in the minority.

“Oh I’m sure it’s difficult,” he said. “I’m sure the price (of milk) has gone way down.”

According to an economic impact study published by the University of Missouri, milk prices have fallen nearly 9 percent from their projected totals earlier this year.

The plummet prompted Sens. Josh Hawley and Roy Blunt, as well as 11 other U.S. senators, to petition the federal agriculture department and Sec. Sunny Purdue, the department’s head, to provide substantial assistance to dairy farmers.

While the petition doesn’t dive into specifics, it suggests heavily relying on the Coronavirus Aid, Relief and Economic Security (CARES) Act. The CARES Act was signed into law March 27 and provides a comprehensive recovery package for the entire nation, and it includes several provisions for farmers.

“Economic stability for the dairy industry will help ensure that a stable and abundant food supply is available to the public at reasonable prices now and long into the future,” the letter read. “The Congress provided several ways in the CARES Act to help the dairy industry. We urge you to develop strong measures to help mitigate the current market upheaval so that the dairy industry can survive this crisis.”

That aid, Vetter said, could be the jolt the dairy industry sorely needs.

“Yeah, it probably is at this time,” he said. “Gets commerce moving in the right direction.”


Virus sours business for already-reeling dairy industry

This was supposed to be rebound year for dairy farmers embattled by at least four years of depressed milk prices — and then the coronavirus hit.

Schools, restaurants, institutions and universities closed to help slow the spread of the virus, wiping out much of the food service market that makes up for a big chunk of dairy farmers’ business.

Now farmers and cooperatives from Florida to Wisconsin to Maine are dumping milk because there are no plants that will take it and the price paid to farmers has collapsed again.

Plants set up to make food service products — like large packages of mozzarella cheese — aren’t able to pivot quickly and start churning out gallons of milk. Retail milk sales were up when the virus first hit as consumers bulked up on groceries but has declined since then, officials said.

“So dairy producers were really looking at 2020 to be the year they repair their balance sheets, and now they have a worse hit to their balance sheets than they ever actually experienced in those previous years,” said Alan Bjerga, a spokesman for the National Milk Producers Federation.

Stewart Young points out how much milk flow one cow is producing during one of its three milkings of the day. The cow produced about 14.5 gallons of milk. (Provided photo — S.N. Briere, Cortland Standard)

“We had about four or five good months there for the farmers, and this was looking to be an up year finally after about four straight years of flat and low milk prices, but it’s going to be a terrible year for milk prices here. We’re going to see milk prices down as low as we saw in 2009 after the financial crisis caused a recession,” said John Umhoefer, executive director of the Wisconsin Cheese Makers Association.

Dairy farmers expect milk prices to fluctuate, but typically they go in a three-year cycle. The last slump extended longer, with fewer people drinking milk in part because of plant-based alternatives like soy milk, turbulent export markets and too much fluid milk for the demand. Cows don’t shut off, and fluid milk is highly perishable.

In the past five years, about 5,000 dairy farms have gone out of business across the country, and the ramifications of the virus outbreak will drive more to the brink, according to Cornell University agricultural economist Andrew Novakovic.

It’s the worst the industry has seen, comparable to the Great Depression, he said.

“It’s going to push dairy farmers out of business; it’s going to push processors out of business,” Novakovic said.

The couple that owns Darlington Ride Farms in Darlington, Wisconsin, come from long lines of dairying families and said earlier this month that they had been disposing of 15,000 gallons of milk a day for about a week — something they’ve never had to resort to before.

“It’s absolutely devastating,” said Katie DiGangi. “It’s devastating. It’s really hard for us and it’s hard for our family, and it’s really challenging.”

Farmers who belong to cooperatives get paid something for dumped milk, but it greatly reduces their revenues, according to Bjerga.

To try to make do, Agri-Mark Cooperative, which gets milk from 840 farms in all six New England states and New York, has been churning out retail products since the virus hit. It has also donated food service products — such as big containers of sour cream — to food banks.

“The retail market’s been stronger but certainly not anywhere near enough to make up for the loss of 50% of the business,” said spokesman Doug DiMento. “So we’ve been making cheese. We’ve been putting out more cheese in the last month than we ever have.”

Dairy groups and agriculture officials from some dairy-producing states have asked the U.S. Department of Agriculture to step in to support the industry and buy the additional products for emergency distribution.

It’s frustrating during a national emergency to see empty shelves or limits on milk purchases at a time when some is being dumped, said Dale Cole, who has a 90-cow dairy farm in Sidney, Maine.

“We want to sell it to people who need it,” he said. “It’s very frustrating for the farms.”

In the meantime, the unknown of how long the pandemic will last is causing added stress and anxiety.

The small Putnam Ridge Farm in Newbury, Vermont, which milks 37 Jersey cows, needs to upgrade a tractor but is trying to figure out what it can afford right now.

“It’s pretty scary actually,” said Sarah Putnam.

Dairy farming, she said, has “always has been a roller coaster ride anyway, and it seems like this is a extreme ride.”


P.E.I. dairy farmers in ‘for a tough year’

With the closure of restaurant dining rooms during the COVID-19 pandemic cutting into demand, P.E.I.’s dairy farmers have reduced production.

‘We operate on very low margins’

Some cows are being put out to pasture to wait out the drop in demand, while others are being culled. (Darryl Dyck/the Canadian Press)

With the closure of restaurant dining rooms during the COVID-19 pandemic cutting into demand, P.E.I.’s dairy farmers have reduced production.

The 160 milk producers on P.E.I. have dropped the amount of milk cows produce by between three and five per cent. So far Island farmers haven’t had to dump any milk yet, which has happened in other provinces.

Gordon MacBeath, chair of Dairy Farmers of P.E.I., said this amounts to between 150,000 and 200,000 fewer litres a week, with a cost of about $150,000 a week to the industry. 

“We told producers to prepare for a tough year,” said MacBeath.

“We operate on very low margins, with pennies per litre, so when we take a percentage like that out of our daily production then it will have a significant impact on the bottom line of P.E.I.’s dairy farmers.”

Some farmers are drying cows off, allowing milk production to stop and putting them out to pasture, said MacBeath. Those producers are hoping to quickly ramp up production again when demand returns.

Others have decided to cull some of their cows, usually sending them to Atlantic Beef Products in Borden-Carleton.


Florida dairy farmers scramble to keep up with volatile milk market

As the nationwide shutdown stretches on across the country, farmers here in Florida are feeling the effects.

Over the past few weeks, demand for milk has plummeted, and local dairy farmers have struggled to curb production fast enough – leaving them with hundreds of thousands of gallons of excess milk on their hands.

Joe Wright,President of Southeast Milk Inc Dairy Co-Op says they had to dump 135 tanker truckloads full of milk earlier this month since buyers like schools and restaurants have mostly closed down.

The dairy co-op has now had to dump 135 tankers of milk (Credit: Brittany Nickerson Thurlow)

“We just didn’t have any sales for probably 10% of our milk. I mean no sales so all we had was grocery stores sales,” Wright explained.

But even grocery stores couldn’t take in all of the extra product. Stores like Publix began limiting the sale of milk to curb panic buying, and as the extra milk piled up, the price of milk across the country began tumbling.

Some grocery stores have had to limit the sale of milk since the shutdown (Credit: Brittany Nickerson Thurlow)

“Financially, we have a train wreck on our hands,” Wright told CBS12 News.

But the picture is not all bad. On Friday, Publix lifted the ban on milk sales, and local farmers say the demand began creeping up.

“A lot of the buy one per family or the limiting restrictions in the stores have now been lifted, and now it’s flowing like it needs to flow” Jacob Larson, the owner of Larson Dairy told CBS12 News.

Larson Dairy Farm (WPEC)

Larson has had to curb production about 5% to meet the new market demand, and like many farmers, he’s now taking things day by day as he learns to adjust to a volatile marketplace.

Larson Dairy Farm (WPEC)

“It’s a lot of balancing too much milk costs you money, not enough milk costs you money,” Larson said. “For us here at the farm, we keep doing our job. Number one we take care of the people and number two we take care of cows we leave the rest up to the Co-op if that milk is not used, it’s up to them to dispose of it.”

Larson Dairy Farm (WPEC)

Wright says he’s pleased to report the Co-op has had no need to dump milk recently, but with rapidly changing demand and a bleak futures market, he says there’s no telling what tomorrow could bring.

“Today we’re not dumping milk. Doesn’t mean we won’t go back to it, but…we don’t know where we’re going to end up and we’re nervous about this.”


April’s Dairy Data Dashboard

Every month, USDEC aggregates domestic and global dairy data to create 10 charts displayed in a one-page, printable dashboard. 

The April Dairy Data Dashboard is now available.

 Dashboard (2)-1


Germany calls on EU to support dairy farmers

Germany’s agriculture ministry has called on the European Union to take action to support dairy farmers who face a steep fall in milk sales due to the ongoing pandemic.

According to Reuters, Germany’s Agriculture Minister Julia Kloeckner has written to the EU Commission and asked the body to give financial support for warehousing costs to store milk powder to help dairy markets recover from depressed prices.

France made a similar request last week.

Despite a temporary upswing in milk sales in the retail sector, the coronavirus has shutdown most of the restaurant sector, gutting demand.

Germany’s exports of dairy products have also fallen, the Association of German Farmers said separately.

Kloeckner said private warehousing space to store unsold milk powder should be made available.

Lower German dairy exports, especially to Asia, mean prices could fall further, Kloeckner said in her letter.

Read more about this story here.

Australian milk production bounces

Australian milk production bounced in February with production up 8.1 per cent on the previous year.

Australian milk production bounced in February with production up 8.1 per cent on the previous year, the latest figures from Dairy Australia reveal.

But year-to-date production was down 2.6pc to the end of February.

The figures have not been adjusted for the leap year with an extra day in February this year.

Milk production was up in all states, except Queensland.

Gippsland and Tasmania are leading the resurgence.

Production in Gippsland was up a massive 22.1pc on the previous year, while year-to-date production is up 4.4pc.

Tasmanian production jumped 16.8pc in February with year-to-date production up 3.3pc.

Other regions recorded more modest increases in February: SA up 4.7pc (down 4.4pc year-to-date), NSW up 2.7pc (down 5.6pc year-to-date), WA up 0.5pc (down 3.7pc year-to-date), northern Victoria up 0.6pc (down 5.8pc year-to-date) and western Victoria up 3.9pc (down 5.3pc year-to-date).

Queensland continues to bleed production, down 4.9pc in February and 13.1pc year-to-date, confirming its position as Australia’s smallest milk producer, with just 3.5pc of the nation’s total.


CME update: cattle futures sink further as COVID-19 closes more meat processors

US Livestock futures plunged on 13 April as worries of reduced meat processing capacity clouded the market.

According to Reuters, after meat processing giant Smithfield Foods announced that it would shut one of its pork plants indefinitely due to coronavirus infections among plant workers, livestock futures tumbled.

The closure of the South Dakota plant was the latest in a series of plant closures and production slowdowns at beef and other meat processing plants around the country.

On Monday 13 April, meat packer JBS USA announced it would temporarily shut its beef plant in Greely, Colorado until 24 April. The plant slaughters about 5,400 cattle a day, according to Kerns and Associates, or about 5 percent of the daily US slaughter.

“If these plants keep shutting down, we’re going to have a major issue,” said Ted Seifried, chief market strategist for Zaner Ag Hedge.

“We’ve got the animals, but if we can’t get them processed and the meat to grocery stores, we’ve got a huge backup of product. What we were concerned with at the beginning of this crisis is now happening.”

CME June live cattle futures ended the day down 3 cents at 81.375 cents per pound and May feeder cattle futures settled down 4.5 cents at 114.450 cents per pound. Tuesday’s trading limits will expand to 4.5 cents for live cattle and 6.75 cents for feeders.

The meat packer closures would leave livestock producers with fewer buyers for their animals, which puts downward pressure on live animal prices.

Cash fed cattle prices fell $7 per cwt last week in the southern US Plains market, according to traders, and could slump further in the weekly round of packer buying later this week.

Meat prices, however, have somewhat stabilised following a recent slump, with choice and select boxed beef up about $2 to $3 per cwt, according to the USDA.

Read more about this story here.

International dairy processors feeling coronavirus pain

Dairy markets have started to feel the impact of coronavirus, with lockdowns in many countries disrupting trade and shutting restaurants.

Fresh Agenda director Steve Spencer said the most significant impact was being felt in American and EU markets.

Both countries were approaching peak milk output.

Output was growing by 1-1.5 per cent, year-on-year, but processors had found that a large percentage of their food market – foodservice or eating out – had shut.

“They face the urgent problem of simply too much milk for the market over coming months and quickly drying it to lower supply and divert it to storable products,” Mr Spencer said.

“Industries are calling for government help to buy surplus product off the market and help address the need to slow down milk, while compensating farmers for the sudden drop in the size of the market. ”

The most significant price impact had been seen in skim milk powder, with prices in the EU nearing intervention buying prices, a little below 1700 euros/tonne, and below US$2,000/t in the US

Cheese prices had also fallen hard, with US cheddar prices trading at US$2,500/t.

There was a double impact on butter prices, with retail markets closed, additional milk being sent to driers and a large portion of fresh cream going into food service..

“The extent of this pressure will depend on how quickly milk supply will be slowed and of course, how long lockdowns remain in place,” Mr Spencer said.

Growing uncertainty

Maxum Foods Dustin Broughton said uncertainty was growing.

“The impacts of lockdowns to control the spread of disease on employment in major business sectors will transform into staggered and uncoordinated measures to unwind restrictions and settle into a deep recession in major economies – the length and depth of which depends on many factors,” Mr Broughton said.

“These profound changes will significantly impact the upstream supply chain, causing changes in product mix in response to major shifts in product demand – mainly due to weaker cheese demand – to avoid large production of mozzarella and processed cheese.”

Demand from developing regions remains robust, including a recovery in Chinese business and consumer activity, conditional on COVID-19 being held in check.

While the market crash has been sudden, milk price signals and supply-side impacts would lag.

“Commercial and policy measures may intervene to address surplus milk supplies – kicking the can down the road into a scenario that global markets have only just shaken off,” Mr Broughton said.

He said skim milk powder prices had fallen, with the expected rapid stock build, initially as a result of the slowing of global trade, due to restrictions on freight and logistics.

“The risk has escalated with the expected increase in skim milk powder and non-fat dried milk (NFDM) production as major producers avoid production of cheese exposed to food service markets which have been decimated by COVID-19 lockdowns,” he said.

European spot prices for whole milk rose in March, after softening in February, as global markets continued to be disrupted by the spread of COVID-19.

New Zealand values dropped under US$3,000/t mid-March and continued to slide through the month.

The story Overseas dairy processors feeling coronavirus pain first appeared on Stock & Land.

Irish dairy farmers enter unique collaboration to meet COVID-19 challenge

Irish Farmers Association (IFA) Dairy Chairman Tom Phelan takes steps to reassure Irish dairy farmers as the pandemic grinds on.

IFA National Dairy Chairman Tom Phelan reports that the group has been contacted by multiple concerned farmers who were worried over media stories of milk dumping in other countries affected by COVID-19. In order to reassure Irish dairy farmers, Phelan issued the following statement:

“Dairy farmers here can take a great deal of heart from the fact that our industry is driven by the co-operative ethos our forefathers had the foresight to choose for our sector. Our co-ops have a strong track record of collaboration at peak to cope with processing capacity difficulties, which occur every year. They also process our milk mostly into long life, storable commodities, not products destined for the food services trade, which is temporarily closed.

“I do not wish to understate the seriousness of the challenge posed by COVID19 to the entire food industry, dairy included. But I know from ongoing, bi-weekly contact with stakeholders including processors, that they are working very hard together on contingency planning. At this point of the season, all is going as well as possible.

“Staff working in our plants and truck drivers collecting our milk are all working very hard and farmers appreciate this. Farmers are also playing our part to ensure the safety of all. Management are working to anticipate staffing issues by training additional employees to do critical jobs, they are redirecting milk to a different plant where necessary, and I am very clear that all are committed to doing everything possible so that every drop of milk is collected and processed through peak and beyond.

“I have asked all co-ops to communicate in detail, regularly and frequently with their suppliers so they understand the specific challenges being encountered and how they are being dealt with by their co-op. We are all in this difficulty together, and we need to work hand in hand with our co-ops to ensure the sector can come through the challenge of the pandemic,” he concluded.


Upstate NY dairy farmers deal with lower milk prices

After milk flew off the shelves in the initial rush for food during the onset of the COVID-19 outbreak, social distancing regulations set at state and federal levels have caused lower milk prices and dairy surpluses nationwide.

“It went from everybody buying milk in the stores, to empty shelves to now we’re dumping milk,” said Todd Giroux, president of the Clinton County chapter of the New York Farm Bureau.

“We went from having what looked like one of the best years in a long time, to, in three weeks, just hoping we’ll make it through it.”

The lower demand for dairy products in restaurants and the food service industry as a whole has led to dairy surpluses across the country, including the north country.

Bill Harrigan, treasurer and member of the board of directors for Agri-Mark, said that while there are still good sales numbers in grocery stores, it’s not nearly enough to replace “the high percentage of the milk market that is lost by the lack of the food service outlet.”

“Prices haven’t dropped to the level where there’s no profit to it, but it’s a matter of how much we’re going to lose and for how long,” Harrigan said. “There’s a fair amount of anxiety.”

Agri-Mark is a regional farmer cooperative best known for its Cabot and McCadam cheese and dairy products.

While the takeout- and delivery-only model that restaurants in the state have had to adopt does not present the same demand, Giroux is happy that there is still some demand there.

“We are lucky with what is still being done out there in the food service industry,” Giroux said. “We’re lucky there’s still a lot of pizza being made and the places that are still open are using plenty of product, it just isn’t enough to make up for the sudden stop.”

Giroux said that he has been in touch with both state Assemblyman D. Billy Jones, D-Plattsburgh, and federal Congresswoman Elise Stefanik, R-Schuylerville, in recent weeks to help make sure that the region’s dairy farmers stay on the lawmakers’ radar.

“The Farm Bureau has some initiatives that they’re pushing for at the state and federal levels to try and see whatever we can get, whether it’s direct payments or to reopen the dairy revenue protection program, or whatever it may be,” Giroux said. “I’ve just been pushing and pushing them to not let our government forget us. This is a national disaster. I wish I could say it was tied to one area, but this is huge.”

For now, though, farmers like Giroux and Harrigan will continue to supply the north country stores with all of the dairy products they could need.

“The milk is still being produced, and dairy products won’t be in short supply,” Harrigan said. “The cows are still being milked every day, and we’re making more than enough milk to meet everybody’s needs.”

And for those who want to help area dairy farmers make it through these trying times, both Harrigan and Giroux agreed on how: buy dairy.

“Keep buying; If you see an empty store shelf, ask when they’re getting it filled,” Giroux said. “At the end of the day, everybody still has to eat, and we’ll do our part to make that happen.”


Dairy Industry Struggles in Coronavirus Crisis: ‘We Will Lose Farms’

Vermont’s agriculture secretary and its lone member of the U.S. House of Representatives met with farmers Thursday, telling them in a virtual gathering that they are working to help them through the coronavirus crisis.

“This literally is the first pandemic that our county has experienced in a hundred years,” observed Rep. Peter Welch, a Democrat, in addressing farmers who attended the online meeting.

Welch and Secretary Anson Tebbetts of the Vermont Agency of Agriculture said a series of requests have been filed with the federal government — both by the state’s congressional delegation and by a coalition of agriculture leaders representing each of the New England states.

The officials sent letters to the U.S. Secretary of Agriculture, Sonny Perdue. The letters asked for support, such as guaranteed minimum prices for dairy commodities, direct government payments to farm families and for the USDA to stock the nation’s emergency food shelves with more milk products.

Over the past decade, the nation has lost 17,000 dairy farms, Vermont’s congressional delegation said in a letter to Perdue.


Australian dairy farmers assured there will be no need to dump milk

The Australian dairy industry has reinforced its intention to maintain milk flow during COVID-19 concerns, putting practices in place to ensure this happens.

The Australian Dairy Industry Council is aware of footage of dairy farmers in the European Union, United Kingdom and United States having to dump milk due to oversupply caused by the shutdown of restaurants and other bulk buyers to stop the spread of COVID-19.

ADIC chair and Australian Dairy Farmers president Terry Richardson assured farmers there was little risk of milk needing to be dumped in Australia.

“These are turbulent times and we feel for our colleagues in the Northern Hemisphere because spring marks the start of their peak milk production period and food service outlets have shut down, but it’s a different situation in Australia,” Mr Richardson said.

“The dairy processing sector has a strong track record of ensuring the reliable collection of raw milk over many years and through various crises.

“During COVID-19 the industry continues to work collaboratively to ensure continuous, safe and efficient milk collection from the farm gate, right through the supply chain, with no interruptions.”

The dairy industry has formed a National Response Group to ensure a united response to the COVID-19 pandemic, while maintaining supply chains and product quality, and protecting the health and safety of farmers and workers.

Comprised of representatives from ADF, the Australian Dairy Products Federation and Dairy Australia, the group has worked to ensure dairy and all supply components are classified as an essential service, and have implemented measures to keep supply chains operating.

ADIC deputy chair and Australian Dairy Products Federation president Grant Crothers said processors and haulage companies continued to work together to ensure milk pick-ups would occur safely under any circumstances.

“Dairy farmers’ milk will continue to be collected, and we see no reason whatsoever for milk to be dumped,” Mr Crothers said.

“Should any dairy processor not be able to pick up milk, they’d simply need to pick up the phone and call another processor or the ADPF, it’s as simple as that.

“As long as farmers continue to produce safe, fresh and nutritious milk, Australia’s processors will ensure supply across retail, and replenish all products.

“The message for Australia is clear. The dairy industry is essential and open for business.”


US dairy farms face financial trouble as coronavirus spreads

For dairy farmers in the United States, the timing of the Covid-19 pandemic could hardly be worse.

As the disease caused by the coronavirus SARS-CoV-2 spreads across the US and changes so many aspects of public life, it’s also reshaping how consumers buy dairy products. And while lots of farmers are experiencing increased demand for their foods, experts estimate demand for dairy has evaporated by nearly half.

The US dairy supply generally increases in the spring season, part of the natural cadence at which cows produce milk. But according to a new report by CoBank (pdf), there’s little demand for it this year. Economic weakness led big export markets, including China, to slash the volume of US milk they’re importing. School closings across the US—particularly elementary schools—have also put a major dent in milk consumption.

“The biggest thing is the collapse in the restaurant and food service demand,” says Lucas Fuess, a food industry analyst with HighGround Dairy. “It’s tough to get numbers, but I would estimate as much as 40% of dairy goes into food service channels.”

That’s a significant number, especially considering many US dairies were already largely struggling financially. Farm balance sheets, checking accounts, and cashflow were already in a pretty critical situation going into 2020, Fuess says. Now, with the US expected to skid into a recession, people may be spending less on premium dairy products. The result: “We could see a lot of bankruptcies pretty quickly,” he says.

There are a few ways to visualize the pain dairy farms are feeling. One is by charting out prices on the spot market, a daily auction where buyers and sellers make bids for and trade dairy products. The daily settlements set the prices that companies use when doing business, reflecting how much farmers can get for their goods. Spot market prices of butter and cheese blocks show a clear dip in the last part of March.

Another way to visualize the downturn: actual photos and videos of milk dumping being shared by dairies on Twitter. Farmers who have more milk than they can sell are literally dumping whole milk onto the grounds of their farms because there’s nowhere for it to go.

There are a couple bright spots, the CoBank report points out.


“A stable-to-slowly shrinking cow herd will keep milk production figures in check while the world emerges from a global pandemic,” it states. The number of dairy cows in the US has been decreasing for decades as farmers have found ways to increase the amount of milk individual cows produce. The stability of that downward trend will help farmers plan for future business. “Feed costs are expected to be lower, which will also help dairy farmers weather this uncertain time.”

The question is how many farms will be able to weather the current crisis.


The long-term impact of coronavirus for the Australian dairy industry

When the dust settles over the coronavirus, it is critical that all levels of government assist industry to rebuild.

The world has been turned upside down over the past month. The impacts on most people’s lives are extreme and this is likely to last for many weeks or months to come. As well as the personal toll, the financial impacts of coronavirus are unprecedented and are likely to be greater than World War II. Already it is having a devastating impact on the economy and will likely lead to a major recession.

In an effort to stave off a recession for Australia, both state and federal government financial packages to individuals and to businesses have been astonishing. But it all comes at a cost; it will lead to high debt levels which will probably take 10 years for the country to pay back.

In addition, the private sector will face a massive financial hit. Although the impacts on businesses will be partially offset by government spending, most businesses will be in a far worse financial position compared to pre-pandemic.

So what does all this mean?

It means that all industries will have to tighten their belts substantially and accept that this will probably take at least five years to recover from. The amount of money that businesses will have will be less, and the amount that state and federal government have to spend will also be reduced. This will have a domino effect, devastating businesses outside of the initial hit.

When the dust settles over the coronavirus, it is critical that all levels of government assist industry to rebuild and make significant funding available for this to occur.

As we are an essential industry like the rest of agriculture, the dairy industry has been able to continue operating during this time of crisis. Even though we have fared OK during the chaos to date, the long-term impacts could still be severe as we manage production when our export markets are in jeopardy.

While the state and federal stimulus packages and other financial support have been welcome and necessary to steer our nation’s economy through this troubled time; the government cannot take a short-term approach. It is going to be a long road back to a properly functioning economy and long-term projects and ongoing advocacy for our industry does not and cannot stop.

There are several good reasons why dairy and all agricultural industries are considered essential to the wellbeing and future of Australia. State and federal government need to be considerate of the long-term impacts on the economy and industries such as dairy beyond the next six to 12 months.


Covid brings tears and spilt milk to Canadian dairy

Dairy farmers in one of Canada’s largest milk-producing province are poised to dump millions of litres of milk due to coronavirus.

Dairy Farmers of Ontario has told farmers to get rid of raw milk to keep prices stable and prevent oversupply.

The industry group says demand has crashed as restaurants and other bulk buyers shutter due to Covid-19.

Some 500 farms have been asked to dump 5 million litres a week, according to a trade report.

The policy is a volte-face from last week, when Dairy Farms of Ontario, which oversees nearly a third of Canada’s dairies, had asked farmers to increase production amid concerns about a shortage.

“In its 55-year history, Dairy Farmers of Ontario has only once before had to ask producers to dispose of raw milk,” Cheryl Smith, the association’s CEO, told BBC.

Canadian dairy is produced under what is known as a supply-management system, which strictly controls production quotas and imports to support prices.

At first, the industry co-op was concerned there would not be enough milk to meet demand, as Canadians panic-bought at the grocery store. But hoarding has died down, and the dairy frenzy has waned.

Meanwhile, bulk-buyers like restaurants, hotels and schools have been forced to close due to federal restrictions. That means there’s milk on the shelves not being sold, risking a price plummet.

Dairy Farmers of Ontario is hoping that by spilling fresh milk, the supply will balance out and prices will remain stable. The group has not confirmed how much milk they are asking farmers to dump, but says it will be done on a “select and rotating” basis.

Producers told Ontario Farmer, a trade publication, that about 500 farms across the province have been asked to dump as much as five million litres a week. The province produces about 3 billion litres of milk a year, or about a third of Canada’s total supply.

“We are working very closely with processors and industry groups to respond to the unpredictable market fluctuations that are now part of our current environment,” Ms Smith said in a statement.

Dairy Farmers of Newfoundland and Labrador, another provincial dairy association, asked farmers to dump 170,000 litres last week. The province produces about 50 million litres a year.

Dairy Farmers of America, the largest dairy cooperative in the US, has also asked farmers to dump milk.

Dairy farmers aren’t the only industry struggling with how coronavirus has affected their supply and demand. Global oil prices have tanked with demand, as factories close down and air travel grinds to a halt.

But unlike dairy groups that have asked members to dump milk to keep prices stable, the Organization of the Petroleum Exporting Countries (OPEC) has decided to ramp up production. The move, spurred by a price war between Russia and Saudi Arabia, has pushed prices even lower.

The supply war has wrought havoc on another key Canadian industry- oil, based largely in the province of Alberta.


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