The dairy sector in the United States is once again dealing with supply chain challenges. This time, there is a milk carton scarcity.
The United States Department of Agriculture (USDA) published a policy document on October 25, 2023, admitting that “schools in multiple states are experiencing milk supply chain challenges related to packaging issues.”
The letter authorized state agencies to enable USDA-funded milk program operators to waive program requirements if supply problems occurred. Hospitals, nursing homes, and jails, in addition to schools, make extensive use of single-serve boxes.
A manufacturing backlog at Pactiv Evergreen, a packaging company in Lake Forest, Illinois, seems to be at the foundation of the problem. Pactiv Evergreen describes itself as “the leading manufacturer of fresh food and beverage packaging in North America.”
The firm has not provided an official explanation for why it is unable to fulfill its orders at this time. However, a report of the issue on the packaging industry website “Packaging Dive” on November 3 highlighted that Pactiv Evergreen announced earlier in 2023 that it was reorganizing to consolidate its beverage and food merchandising divisions.
As part of that approach, the corporation shut down a paper mill in Canton, North Carolina, as well as a conversion plant in Olmsted Falls, Ohio. The combined closures resulted in the loss of around 1,300 jobs.
When the milk carton crisis occurred in September 2023, numerous dairy processors contacted Tetra Pak, another major dairy packaging producer in the United States. However, Tetra Pak has had to reject orders down due to its inability to satisfy the rapid increase in demand.
“Tetra Pak has increased overtime production in our factory to ramp up production of single-serve, chilled gable-top cartons,” Seth Tepley, president and CEO of Tetra Pak U.S. and Canada, said. “However, we do not currently have the production capacity to fully make up for the unexpected shortage, which means we are unable to fulfill every new request for additional supply.”
Meanwhile, schools in New York, California, Pennsylvania, and Washington State are already experiencing disruptions. Some are looking at bulk milk dispensers and shelf-stable packaging as alternatives to continuing to provide milk. Others fill reusable or disposable cups with milk from plastic bottles.
Others are taking advantage of the USDA exception and foregoing milk entirely. A communications message to parents from the Lake Stevens School District in northwest Washington was featured in a November 3 New York Times story. “Sometimes we may not have milk during breakfast or lunch,” it said. When milk is available, we want to emphasize it at breakfast.” Students were also asked to bring their own water bottles to school.
According to Rochester local news station WROC, schools in Rochester, NY are providing pupils with juice instead of milk. Kendra Lamb, a dairy producer in Genesee County, New York, told the station that she is particularly worried about any problem that delays milk from reaching customers.
“Because our product is quite perishable, certainly, any reduced demand would be a concern for us,” he added. “We’re hopeful that our cooperatives are going to be able to…find another way to provide the wholesome milk to the people who need it.”
However, New York State Assemblyman Chris Tague was less positive, referring to the packaging issue as a “national crisis” in a recent post on X, previously known as Twitter. “How we handle this situation will set a precedent for milk availability in schools,” the legislator and former dairyman said. “And right now, it is not going in the right direction.”
According to International Dairy Foods Association spokesman Matt Herrick, US milk processors are working with other package suppliers to fix the shortfall, but the situation is expected to last until at least early 2024.
