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Indiana dairy producers lose market for milk

dairy cows at feed trough
WHO WANTS MILK? These cows produce milk every day. Right now, several dairies in Indiana don’t have a market for their milk after May.
The 27 affected dairies have until late May to find a new market for their milk.

June is National Dairy Month, but it could be a sad time for more than two dozen dairy operations in Indiana if they can’t find a market for their milk. Included in that number are several large dairies that produce large quantities of milk daily.

One dairyman reports that the situation developed because around March 1, Dean’s Dairy exercised its right to provide 90-day notice to no longer buy a dairy farm’s milk. One problem is the details are sketchy about what these dairies might do to find another market. Greg Slipher, who follows animal agriculture issues for Indiana Farm Bureau, recently related what he knows about the situation in an interview with Indiana Prairie Farmer.

What do you know about this situation? Our information indicates 27 dairies in Indiana and about 100 dairies total in eight states who sold milk directly to Dean’s Dairy were notified around March 1 that [Dean’s] would no longer buy their milk. Under terms of their contracts, either party could give notice 90 days prior to ending the arrangement. That means these dairies have until around June 1 to find a market for their milk.

Do you know if someone else will buy milk from these dairies? No, we don’t know. Our latest information from leaders inside the dairy industry in Indiana indicates that the farms are trying to find a market, but many would-be buyers already have all the milk they need. The root cause of the problem is that there is more fluid milk available right now than people want to buy.

Is this part of a bigger trend? Yes. Milk consumption has been declining in this country on a per-person basis for many years. At the same time, milk production has been increasing. If you want to help these guys, drink an extra glass of milk today and encourage others to drink milk. There is more milk than there is demand.

Is Farm Bureau aware of the plight of dairy producers at the national level? Yes. American Farm Bureau drafted a letter which was recently sent to USDA, asking for an audience with the people who work in areas related to milk marketing to discuss the issue and possible solutions. Indiana Farm Bureau signed onto the letter. Unfortunately, this isn’t going to provide help on a short-term basis.

Are co-ops the answer? Traditionally, many dairies have marketed through a co-op instead of directly with a company. However, we’ve heard that even some existing co-ops today have quotas on how much milk existing members can produce.    

TAGS: Marketing
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