KALAMAZOO COUNTY, MI (WKZO AM/FM) — Dairy farmers are facing challenges to the industry as the COVID-19 pandemic’s impact deepens on the local economy.
The combination of tariffs on foreign purchases and a poor season for Michigan agriculture in 2019 had soured the outlook for dairy producers in the state. A roaring economy gave many more hope heading into 2020, but those were quickly dashed as the COVID-19 outbreak caused most state businesses to grind to a halt.
Governor Gretchen Whitmer’s “Stay Home, Stay Safe” executive order allows most food production operations to continue and classifies a wide array of workers in the food and agricultural supply chain as essential workers.
Despite being exempted from the ban, many dairy providers are finding severely depressed demand for the product. Michigan milk providers have seen a nearly 40% decrease in prices for the product as restaurants and largescale food operations shutdown or slow the typical ordering of goods.
Michigan Farm Bureau Livestock and Dairy Specialist Ernie Birchmeier says the agriculture industry and food suppliers have had to quickly retool their sales projections as wholesale buyers like schools and restaurants cease orders and grocery-store patrons become the primary buyers of milk, even though they do not make up for the lost business. The overall declining demand for milk-based products like butter, cheese, and yogurt is also hurting dairy farms.
Recent estimates by the American Farm Bureau indicate 36% decline in some milk prices from the same point in mid-January.
Many retailers like Walmart have announced restrictions on the number of purchases for products like milk, eggs, toilet paper, and hand sanitizer to prevent hoarders from causing shortages on store shelves. The consumer demand bump has kept dairy operations busy, but difficulties in the supply chain from farm to table are still hurting the bottom line for dairy producers.
“Products like milk that we’re used to having go into many small cartons for school lunches, eggs that may have gone in large containers or liquid form for restaurants, are being shifted into smaller containers that can be used for consumers,” said Birchmeier.
Dairy farmers cannot easily reduce the number of milk-producing cows, and many do not want to during what could end up being just a temporary downturn. That means that while they keep producing the same level of milk they are left with a surplus of the spoilable product.
The International Dairy Foods Association and National Milk Producers Federation, two of the largest dairy networks in the country, have unveiled a plan to pay producers to dump milk in an effort to keep supplies flowing.
WOODTV8 has reported that area producers like Swisslane Dairy Farms in Alto are also considering doing the same if market conditions continue.
Michigan Senators Debbie Stabenow and Gary Peters have both urged federal agencies like the U.S. Department of Agriculture to provide relief for struggling farmers.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by congress includes $9.5 billion in secured funding programs that will be allocated for food, livestock, and dairy producers negatively impacted by the outbreak.
