Northwest Iowa — While it’s probably not really common around our area just yet, it could happen — the dumping of milk. And this during a time when some grocers’ coolers are low on milk. How can this be?
Those are the questions we asked of Iowa State University Extension and Outreach Dairy Specialist Fred Hall. He says at first glance, it does seem to defy logic.
(as said:)”There has been milk that I’m aware of dumped in Nebraska and some in Minnesota and Wisconsin. To my knowledge there hasn’t been any dumped in South Dakota or Iowa. Now I would say it can happen and it likely will. Here’s the dichotomy we’re faced with. When the coronavirus hit it changed the marketplace completely. Milk that was destined for institutional use — hospitals and schools — that’s usually packaged specifically for those uses.”
He says it’s all about what product the production lines are set up to produce. He gives us some examples.
(as said:)”The butter pats you see in restaurants — they won’t repackage that. They’re not allowed to repackage it to make the traditional quarter-pound bars that we all buy and use at our house. Another example is if you’re a hospital and you’re putting milk into food trays you probably buy a 5-gallon reusable container for milk, fill the glass, and put it on the tray. You may use the small serving-size like schools use but ultimately those don’t go to the store because people traditionally want to buy gallons or half gallons. So once it’s in that system, it’s got a fairly short life. And if you’re set up as a process of doing that it’s real hard to transition.”
Hall also tells us that people were hoarding groceries, that “drained the pipeline.” Plus, he says that some of the plants are being hit by the coronavirus — either their line employees or truck and delivery personnel. He says all that plays a role in finding coolers not completely stocked with milk.
He says another issue is storage.
(as said:)”They just don’t have the storage or the time element to hold product indefinitely. With butter and cheese it’s a little better. But once those storage areas are full, they really can’t take any more milk. So they have to go back to the producer and say, ‘Here’s the option, you either have to reduce production or dump milk.’ The immediate way to reduce it is dumping milk. So that’s kind of a quick and dirty review of why we’re seeing an abundance of milk and pictures of it being dumped and yet some of the store shelves are empty.”
Hall says they’d ask people to continue to buy milk, and the store shelves should look more normal shortly. He does say that if dairy producers end up having to dump milk, they should make sure they measure that milk and report it to their creamery or coop so that it’s included in a federal market order report. He says if there ever would be a payment, it will have to be documented. He also advises dairy farmers to lock in some milk when prices improve, even just a little, and if it goes up again, you can lock in some more. He says it’s about “controlling the bleeding of the profit at this point.”
On the retail side, Hall predicts milk prices to stay the same in stores, but they hope the prices will rise on the farmer side, as costs are not being covered right now.