The Covid-19 virus has wreaked havoc in every corner of the globe and the dairy industry is feeling a serious pinch with the decreased demand for and an oversupply of its product. Across the Midwest, some farmers have even been forced to dump thousands of gallons of milk each day because the market has dramatically shifted and factories are unable to keep up with the increased demand from the retail market while others are working to find a market for the milk that they produce daily.
Local dairy producer David Schwartz, who is a member of the American Milk Producers International Cooperative (AMPI), has not had to dump any milk. He has had to sell some border cows sooner than normal, he says. “But we’re just a minority in this. The people with hogs have to go to market when they’re ready to sell and the plants are shutting down. It’s just an evil circle and everything multiplies.”
The crux of the situation is that there are more people sheltering in their homes and buying more products through grocery stores. As a result, factories cannot keep up with the dramatic increase in demand, Wisconsin dairy producer Hank Wagner of Wagner Farms explains. According to Wagner and other milk producers, there is a plentiful supply of milk even though grocery store shelves may indicate otherwise.
While factories have been preparing products meant for service industries such as restaurants and schools, that demand has gone down 90% while retail has increase 200%. “The two offset each other but the factories have been producing products for the service industry that cannot be sold to consumers in stores. It’s hard to shift from service to retail industry,” Wagner explains.
To further stymie the situation, demand through grocery stores is creating a challenge in producing containers and labels – factories cannot keep up with 2 to 3 increase production levels. “There are so many things in this complicated picture of getting milk from these cows that is produced every single day, all day, processed and through to the consumer,” says Wagner.
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