Over the last couple weeks, stories of “milk dumping” on Wisconsin dairy farms have made the national news.
Over the last couple weeks, stories of “milk dumping” on Wisconsin dairy farms have made the national news. I wondered what was happening with dairies in Minnesota. Especially here in Brown County, where dairy farming is a big part of the agriculture picture.
When I have a “dairy” question, the first person I ask is Shannon Seifert. Seifert, who grew up on a dairy farm in rural Sleepy Eye and currently resides in New Ulm, ran the Brown County Dairy Princess program for several years — that’s how she became my dairy point person.
Seifert works as Program Manager for Midwest Dairy, regional check off organization for dairy farmers; and as Membership Director for Minnesota Milk, Minnesota dairy farmers’ policy organization.
In addition to answering my questions, Seifert referred me to a couple more resource people, who also answered questions about the COVID-19 pandemic’s effect on the industry.
Sarah Schmidt is Vice President of Public Affairs at AMPI, a dairy marketing cooperative owned and governed by dairy farmers, which area residents are very familiar with, as it’s corporate office is in New Ulm. Schmidt said AMPI has 20 dairy farmer member-owners in Brown County.
Steve and Kerry Hoffman are dairy farmers in Brown County’s Cottonwood Township. The Hoffman’s milk 150 cows and plant corn and soybeans, in addition to oats and alfalfa. Steve also serves on the AMPI Board of Directors, so has that duel prospective, and took a brief planting break to talk a bit.
The good news is that Minnesota dairy farmers have not had to dump milk during this current time of reduced demand for dairy products.
Schmidt said AMPI has been able to continue to process the cooperative’s members’ milk.
“At AMPI, we make what we sell. Customer orders are matched with milk production and manufacturing capacity in eight locations throughout the Upper Midwest,” said Schmidt. “The cooperative’s award-winning cheese, butter and powdered dairy products are marketed to foodservice, retail and food ingredient customers. AMPI produces nearly 10% of the nation’s American-type cheese, processed cheese and butter. The butter plant is located in New Ulm.” [AMPI has plants in New Ulm and Paynesville, plus plants in South Dakota, Wisconsin and Iowa]
Hoffman said their dairy has seen no interruptions in getting milk to the plant, also citing the cooperative’s production of commodity cheese and butter. Schmidt said block cheese is sold to processors who cut and wrap it for grocery stores.
One of the topics that sparked my interest in this story, were reports that milk demand was reduced because schools and restaurants are closed. However, I knew that schools were providing milk in the daily meals delivered to children. Seifert explained delivery of cold milk had challenges, especially in the metro area.
“We think that we have remedied the issues with school milk in the U.S. and Minnesota specifically, “ Seifert said. “Midwest Dairy was able to sponsor over 1,500 soft-sided coolers for schools and an additional number of hard-sided coolers for larger metro school districts, to allow for cold milk to be safely distributed to school feeding sites and via the school bus system. Delivering safe food is a primary concern in the school lunch system.”
Seifert said the biggest reason for the decline in milk usage, and all foods in the United States, has been the dramatic decrease in eating out.
“As a country, we were on track to spend almost as much of our annual income on eating out as we did on eating in,” Seifert said. “Secondly, we are assuming there is some food waste involved in eating out that is no longer in the food supply system.
“Our food manufacturers and processors had to shift their abilities from making commercial kitchen style food to making retail sizes, and some of those businesses cannot make the shift. You might notice more offerings of larger sized food items, such as 10 pound bags of cheese, in the grocery store as these companies try to help move food to the consumer through grocery stores.”
“Dairy is a tricky food. We cannot shut off the cow and tell her to wait to produce her milk until we need it again,” said Seifert. “Dairy farmers have to keep milking their cows every day, it’s a critical part of the cows’ care and wellbeing. Because milk is produced 365 days a year and highly perishable, that is why the dairy sector was the first to see these issues. Meat, fruits and vegetables will be next.”
If supply and demand were not problem enough, the dairy industry continues to struggle with the price their commodity brings.
Both Hoffman and Schmidt made excellent attempts to explain the complexities of milk pricing to me. The resulting message, from both, is that prices were getting better and now are not good.
“Economists had dubbed 2020 as a recovery year for dairy farmers,” said Hoffman. “And late last year and in January we had pretty respectful prices. Now they are back down to the lowest in about 11 years.”
Schmidt said, “In January, the USDA published margin was $10.73 per cwt (hundredweight). Given COVID-19 and the impact on commodity markets, the forecasted margin for April is $5.84 per cwt. This represents nearly a 50% decline.”
Other industries and businesses in the country have been provided with financial assistance by the government to meet the pandemic’s challenges. Dairy is now on the list, too.
“AMPI advocated for the creation of a government aid program that would help those in need of food assistance during this time and lessen the financial hardship dairy farmers will be experiencing as a result of the dramatic market drop,” explained Schmidt. “USDA’s Coronavirus Food Assistance Program was announced last week. It will include direct payments to farmers and purchases of dairy products for food banks and feeding programs.”
Seifert added an optimistic note for the dairy industry.
“I know farmers are struggling, but we will get through this together,” said Seifert, adding an optimistic message. “Dairy is a strong and resilient community. Pay attention to the food pantry work and how quickly farmers are working to get meat and milk to those families that are unemployed right now. In Minnesota alone, Midwest Dairy is working to deploy 20-plus brand new coolers for food pantries to carry milk for the first time in their locations.”