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Walmart’s milk production hits farmers hard


Being a dairy farmer is an utterly tough slog in the best of times. Now they have plenty more beef.

Declining consumption, increased production and lower prices in the face of increased costs have already hit dairy farmers hard in upstate New York and elsewhere.

Now they’re facing competition from the big box stores.

Walmart, in an apparent quest to dominate its supply chain, has started producing its own milk, a development that has prompted Texas-based Dean Foods to cancel contracts with more than 100 farmers in eight states.

The cancellation notices went out last month to farmers in Indiana, Ohio, Pennsylvania, New York, Kentucky, Tennessee, North Carolina and South Carolina. The contracts terminate on May 31.

The greatest number of farms impacted is in Pennsylvania, where 42 farmers — more than half of them in the Amish country’s Lancaster County — have received pink slips.

While many New York dairy farms are taking a direct hit from the action, everyone from the farmers to industry analysts are predicting sour times ahead in the milk business.

Dawn Erlwein, whose family started what is now called Myers Century Farm in Jeffersonville, NY, in 1837, has a bleak outlook for her family enterprise and its 120 cows.

“If the farms keep getting bigger and bigger and they keep hiring immigrants, they can make all the milk they want to,” she said. “People like us will be the ones working for them.”

Rianne Erlwirn-Owens, 24, is part of the seventh generation of her family to work at Myers Century Farm.

She graduated from Utica College as a registered nurse three years ago, but worked as an RN only two weeks before heading back to the farm. Because her parents wanted their children to have a backup profession, she said they “insisted that my brother and me go to college for something other than farming, but once I went away to college, I realized how much I loved farming.

“I’m very proud of being an RN, but I really love farming,” she said. “Obviously the future doesn’t look too good right now, but I’m hoping for the best.”

Part of the problem facing American dairy farmers is the move to nut- and soy-based drinks.

“Americans drink about three gallons less milk per person per year just since 2010, and per capita consumption is down about 11 gallons since 1975,” said Dean Foods spokeswoman Reace Smith. At the same time, she noted, “the US dairy industry is currently producing 350 million more gallons of milk each year than the year before.”

Smith confirms that Walmart’s decision to open a milk bottling plant in Fort Wayne, Ind., played a part in the decision to fire the dairy farmers. “The introduction of new plants at a time when there is an industry-wide surplus of fluid milk processing capacity forced us into this position,” she said.

According to Matt Gould, a dairy industry analyst based in Philadelphia, the new Walmart plant, which is supplied by its own cows and will be able to produce about 3 percent of the total annual US milk, could not have come at a worse time for farmers.

The milk surplus, he said, is particularly acute in the Northeast, where pressed farmers dumped a record 160 million pounds of skim milk in December 2017 alone, about three times the amount of milk they sent down the drain in 2012.

“The total market has been in decline for many years, and this is before Walmart got into the business,” Gould said.

Many other farmers also are suffering from dairy’s decline.

“It’s going to get much, much worse,” predicted MaryAnn Dirie, whose upstate Youngsville farm contains 50 to 60 milkers. Dirie, 58, said that while Dairy Farmers of America, the cooperative she and her husband Richard, 68, deal with, has not cut any farmers from its roster, it has already reduced payments to them and other members. Also, she pointed out, DFA itself markets to Dean Foods, Hershey’s and other companies likely to be caught up in the milk supply problem.

“They’re not paying us for our milk as it is and now they’re going to drop the prices,” said Dirie. Her husband’s family started Dirie’s Dairy Farm in 1944 when his father came up from Brooklyn to Sullivan County and married a local girl.

 

Source: New York Post


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