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article imageU.S. dairies forced to dump milk as virus disrupts supply chain

By Karen Graham     Apr 3, 2020 in Business
Despite a strong demand for basic foods like dairy products amid the coronavirus pandemic, the milk supply chain has seen a host of disruptions that are preventing dairy farmers from getting their products to market.
The country doesn't have a problem with shoppers clearing out dairy cases of milk, or the various other milk products in grocery stores - but it's not making up for the closings of restaurants and schools.
The shift from foodservice markets to retail grocery stores has created a logistical and packaging nightmare for plants that process milk, butter, and cheeses. Trucking companies are scrambling to find drivers because some have stopped driving out of fear of the virus.
And as for the major dairy export markets - global sales have literally dried up as the food-service sector largely shuts down globally.
Alyssa Badger, director of operations at HighGround Dairy in Chicago told Bloomberg that while some dumping usually occurs during the U.S. spring, this year it will be “even more aggressive."
“There’s no way to offset how much loss we’re seeing with school closings and foodservice demand in the form of cheese and butter, just because someone’s buying an extra gallon of milk,” Badger said.”
Looking at the global food supply chain, farmers, agricultural economists, and food distributors can already see and assess the broader problems associated with the pandemic and its impact on the dairy industry. Their products are highly perishable - milk can’t be frozen, like meat, or stuck in a silo, like grain.
Wisconsin, a state famous for its cheeses has been dealt a particularly harsh blow by COVID-19. About one-third of the state’s dairy products, mostly cheese, are sold in the foodservice trade.
And strangely enough, the forced dumping of milk comes as consumer demand for dairy products has soared. At first, it was "panic buying," but that has started to level off a bit - plus retailers are limiting the number of dairy products a consumer can buy per shopping trip.
Retail purchases of milk rose nearly 53 percent for the week ended March 21, while butter sales surged more than 127 percent and cheese rose more than 84 percent, compared to the same period a year earlier, according to Nielsen data, per Reuters.
More about coronavirus, dairy industry, supply chain disruption, reducing oversupply, Class III milk futures
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