Sharp Drop in Demand Leads Farmers to Toss Milk, Break Eggs in Coronavirus Era

The new scenario taking place at dairies and hatcheries is not one of supplying Americans with diet staples but filling manure pits with milk and breaking eggs to keep chicks from hatching after a sharp drop in demand as the coronavirus outbreak and restrictions continue.

The Wall Street Journal reported on the development:

Farmers and food companies across the country are throttling back production as the virus creates chaos in the agricultural supply chain, erasing sales to restaurants, hotels and cafeterias despite grocery stores rushing to restock shelves. American producers stuck with vast quantities of food they cannot sell are dumping milk, throwing out chicken-hatching eggs and rendering pork bellies into lard instead of bacon.

In part, that is because they can’t easily shift products bound for restaurants into the appropriate sizes, packages and labels necessary for sale at supermarkets. Few in the agricultural industry expect grocery store demand to offset the restaurant market’s steep decline.

The Journal reported on a tanker truck pouring out 6,000 gallons of milk on Nancy Mueller’s Wisconsin dairy farm, the product harvested from 1,000 cows. In ordinary times the milk would be shipped to dairy processors across the state or bottling or to make cheese.

“It was heart-wrenching,” Mueller said.

The Journal reported on how producers are struggling across the country:

Farms are plowing under hundreds of acres of vegetables in prime U.S. growing regions like Arizona and Florida. Chicken companies are shrinking their flocks, to curb supplies that could weigh on prices for months to come. Mississippi-based Sanderson Farms Inc., which last week said demand from its restaurant customers was down 60 percent to 65 percent, has begun breaking eggs rather than hatch them and raise the chicks for slaughter. Other poultry companies are taking similar steps, meat-industry officials said.

“When you have panic in the marketplace, weird things happen,” Tanner Ehmke, a researcher of agricultural markets for farm lender CoBank, said in the Journal report.

Overall, with restaurant closures and other buyers shut down, dairies are left with at least ten percent more milk than they can use.

The Journal reported:

Dairy groups say the milk glut could grow as supplies increase to a seasonal peak in the spring, and shelter-in-place orders stretch on across the country. In response, cooperatives that sell milk from farmers to processors are asking their members to dump milk, cull their herds or stop milking cows early in an effort to curb production.

“Consumers have changed how they eat, and it’s rippling back right to the farm gate,” Dennis Rodenbaugh, executive vice president at Dairy Farmers of America, the largest U.S. dairy cooperative and the group that markets Mueller’s milk, said in the article.

Rodenbaugh said as much as seven percent of all milk produced in the United States last week was dumped and he expects that percentage to increase, according to the Journal.

Bob Wills, who owns and runs Clock Shadow Creamery in downtown Milwaukee, said that when the city’s restaurants closed, sales for the creamery’s chèvre and ricotta cheeses fell 95 percent in one day. 

“The creamery has stopped production and laid off all but one employee, though Mr. Wills said he has been able to absorb the milk from all but one supplier at a second cheese plant he operates that serves retail customers,” the Journal reported.

The Journal said Howard Bohl, who milks 450 cows in east-central Wisconsin, culled his herd by sending 20 cows to slaughter last week. 

Jim Ostrom, chief executive of Milk Source, which operates dairy farms in Michigan, Wisconsin, and Missouri, said ten tankers holding about 60,000 gallons of milk in all was dumped into its manure pits.

Dairy Farmers of America told the Journal that members will still be paid for dumped milk, but pay will be reduced because of lower production overall.

Last week two major dairy industry groups sent a “milk crisis plan” to the U.S. Department of Agriculture, asking the agency to support the dairy industry by paying farms that cut production and purchasing large amounts of dairy products for use in the nation’s feeding programs.

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