On COVID-19 and milk dumping
Just as dairy farmers were looking forward to a decent, even profitable milk price in 2020, along comes COVID-19 to possibly destroy all hopes. Dairy farmers spend all the money they can make, supporting local businesses. Over the last 20 some years surviving ones found ways to beat out the competition. The use of better genetics, feeding and cow comfort has created more, more milk, more milk. It’s what they are good at to their own financial demise.
The banks have also over-loaned money for farm expansions during relative “good” milk price times in history. Interest for life for many.
The markets go up and down. Save in good times to buy out the smaller neighboring farm in bad times. There has been basically 9.2 million cows milking for 20 years in the U.S. Butter and cheese is traded globally so that comes into play also. In 1994 the national herd production per cow was 56 pounds per day. Now it’s about 76 with roughly 9.36 million cows on fewer but much bigger “factory corporate” farms as some advocates call them. Many are now owned by cheese and butter processors. Walmart has built their own bottling plant to remove a middle man or two. It is a tough business for the farmer now with a fine line profit margin.
My dad had a saying: “Independence is the farmers’ greatest strength, but their greatest weakness.” The inability for all to get together and agree how to control supply and demand. Cranberry farmers can can as many berries as they want to maintain a profit. In the past some farmers have voluntarily dumped milk called a “milk strike,” the processors get (angry) and threaten to stop picking up the striking farmers’ milk. There are plenty cows so one or two dropped farms won’t hurt cheese or butter supply.
It is a rat race. I’ve been advocating for a profitable price since 2000. It’s a vicious circle of up and down, good and stupid. If the dairy farm community crashes again there is likely to be a real recession again. In 1980, during the last “farm depression” years, the farmers received 40 cents of the retail dollar. Now it is down to 19 cents of each dollar the consumer spends. The grocery store, distributor and processors divide up the rest.
Hopefully something good will come out of COVID-19 for the .2 percent of population that works seven days a week. Now rBst free milk comes to you from one of God’s greatest creations, the dairy cows.