Dairy in Crisis: Should We Cry Over Spilled Milk or Something Else?

Updated: Aug 29, 2020

Series 2: Farming During COVID, Episode 5


I actually heard the refrain "There's no use crying over spilled milk." more than once growing up. Sometimes it referred to me literally tipping over a glass of milk at the dinner table and other times to when I overreacted to something trivial. This brings me to two points.


First, I used to drink a lot of milk. I would guzzle a cold glass after school, after sports or with a cookie. Now I barely use it as a condiment. I put a splash in my morning coffee. But now my cereal gets almond milk. My chai gets oat milk. Hmm. How did I get here?


Second point: when I first read about farmers having to dump milk during COVID, I was emotional. Ugh. I hate pouring even milk that has gone sour down the drain. What a waste. The pictures alone were enough to induce tears. But then I got my wits about me and started talking to farmers.


We are easily attracted to shiny objects. And the flash of a white river of milk had me at "hello." But the dairy crisis is full of sad stories. What I mean is that the dairy industry has bigger problems than spilled milk. I don't think it matters whether you guzzle milk like the 10-year-old me or if you barely skim it like the, well, much older me. It's a part of our farming world and you should know what's what.



In this episode of Talk Farm to Me, we feature two dairy farmers -- one from Wisconsin and one from Florida. Both farm dairy with their families. Both also have interesting jobs off the farm (like many farmers today). Sarah Lloyd is a food systems scientist with a PhD in rural sociology. Tim Moffet is a stand up comic. So get ready for a chuckle. And also a look under the hood of the dairy industry to see what's wrong, what's been wrong and what you can do about it. And, hey, Joel Salatin is back again this week with some thoughts about milk... especially raw milk. Maybe you didn't know it was an issue.


Thanks for coming along on the Talk Farm to Me journey so far! We are 10 episodes in and have well over 5,000 downloads and growing every day. Thanks, thanks, thanks! Keep sharing... I would love to have more listeners just like you. And let me know if you have any issues or farms you'd like me to cover... I'm all ears!


xoxo Farm Girl



GUESTS

Sarah Lloyd, PhD, Rural Sociology, Dairy Farmer, Food System Scientist -- Wisconsin

Tim "Tim the Dairy Farmer" Moffet, Dairy Farmer, Comedian -- Florida

Joel Salatin, Farmer, Polyface Farm, Swoope, Virginia

PHOTOS

All of the photos were provided by the farmers and Pixabay. Merci beaucoup.

MUSIC

All of the music in this episode is by Lobo Loco. All Night Long (ID 774) and Spencer Bluegrass (ID 1230) Creative Commons License (by-nc-nd)

SPECIAL THANKS

Always thank you to the amazing farmers and farm supporters who said "Yes!" to an interview. Sarah, thanks for all the great ideas. Tim, thanks for cracking me up.

TRANSCRIPT

For those of you who cannot listen to the podcast or prefer to read it, here's a full transcript. Please forgive any typos.


Talk Farm to Me, Season 1, Episode 10

The Dairy Crisis: Should We Be Crying Over Spilled Milk... or Something Else?


Sarah Lloyd (00:00):

Only healthy animals produce good milk, and so you spend so much time and money and love and care producing this milk. Then to have to just think about dumping it down the drain before it even leaves your farm is devastating.


Farm Girl (00:27):

Today on Talk Farm to Me we'll hear from two dairy farmers. One from Wisconsin and one from Florida about the dairy crisis, how COVID has exacerbated it and what can be done, including what you can do. We will also hear a word or two from sustainable farming pioneer Joel Salatin who joined us last week. Joel is back to share his strong opinions about milk.


Welcome to Talk Farm to Me, I'm your host Farm Girl. On Talk Farm to Me, the farmer takes center stage and we find out what they do and how they do it. No matter how you spend your time, I'm pretty sure you have more in common with farmers than you think. Sit back and relax and I'll bring a farmer and maybe a cow or two right into your living room for a chat.


In early April, dramatic headlines showed dairy farmers dumping milk down the drain. With restaurants and schools closed and milk exports coming to a halt during COVID, the dairy industry entered crisis mode. Dairy processors had a backlog of milk, cheese and other dairy products. With no products moving, they were not able to take on any new milk and the cows kept producing and milk had nowhere else to go.


Meanwhile, grocery stores had a shortage of milk and imposed some limits on what you were allowed to buy. Accusations of blame attacked the government, the processors, the system and even the farmers. Today on Talk Farm to Me, we aim to shed some light on the situation and to dig a little deeper into what's really going on.


We begin in Wisconsin, the second largest milk producing state in the United States. Dairy farmer Sarah Lloyd and her family farm dairy on a midsize farm with 400 cows.


Sarah Lloyd (02:55):

We produce 30 billion pounds of milk a year in Wisconsin. We could do that with just 250 farms that had 5,000 cows each. Or we can do that with 7,000 farms that have an average of 160 cows. I am much more interested in the distributed production of 7,000 small businesses being a business engine, being a production engine, because that's what I think is a longer term resilient strategy for just producing safe food, but also getting it to people, being part of vibrant communities.


Farm Girl (03:41):

Like many farmers, Sarah Lloyd also works off the farm. She advocates for family farmers trying to figure out better policies that result in stronger prices at the Wisconsin Farmers Union. Lloyd has a doctorate in Rural Sociology and has recently accepted a position at the University of Wisconsin-Madison. Through the university center for integrated agricultural systems Lloyd applies her knowledge and training as a food system scientist. She is tasked with examining opportunities for structural change in agriculture and what that means for farmers and communities. Did I mention that she ran for Congress in 2016? Sarah Lloyd is tireless. At the top of her list, the dairy price crisis.


Sarah Lloyd (04:33):

The price crisis started really more than five years ago and is particularly fueled by oversupply. This problem is a structural problem that's been around for a long time.


Farm Girl (04:48):

Okay, pay attention here, this is how it all started. It's dairy industry 101 and it's important to you now, because when you see headlines about farmers dumping hundreds of thousands of gallons of milk during COVID, you need to know why. To me, dumping milk is a heart breaker. Do you feel that way too? Well come with me on this little journey to learn more about why it's happening and maybe even how there's a bigger, sadder problem that we have not been paying attention to. Ready?


Sarah Lloyd (05:22):

This problem of oversupply is not actually new, we just had processing facilities to soak up the excess milk. What the overproduction has created over all these years is a low price paid to farmers, because there's a surplus of it on the market and farmers don't get paid very well.


Farm Girl (05:49):

External factors are at play here too like exports. Over the past 15 to 20 year period, the US has moved from exporting 4% of dairy to other countries to 15%. What happens when one of these countries changes their buying habits?


Sarah Lloyd (06:07):

Prices paid to farmers I think kind of late 2014 or early 2015 started to tank. Actually a big part of it was that China, who imports a lot of US dairy products, that China shifted their buying patterns. Dairy has become heavily dependent on the export markets, so that's another vulnerability that's been created so that when China which was like the biggest customer just shifted that it wasn't buying from the US, then that started to lead to this issue and the prices began to drop.


Farm Girl (06:52):

That's one reason, but US tastes began to change at the same time. Here's sustainable farming pioneer, guru and farmer Joel Salatin who we heard from in our last episode. He too pointed out the supply problem with milk, think about this for a minute. You can probably see this playing out in your own refrigerator.


Joel Salatin (07:14):

I mean dairy farmers, as dairy cows are demonized and people move to soy milk, almond milk, coconut milk and the fact that is fluid milk consumption in this country is down like 30%, that's massive. You can't continue running the same number of dairies and dairy cows when consumption drops 30%, you just can't.


In most of America today, milk has become a condiment. You put a little bit of it in your coffee or you put some on your cereal in the morning, but it's more a condiment than an actual food source.


Farm Girl (07:56):

All right, so we are consuming less milk and dairy farms are still overproducing and all of this means that they are making less money. Let's do some milk math. Milk is sold by the 100 weight, it's a measurement that's denoted by the letters CWT. 100 weight is pretty much what it sounds like, 100 pounds and 100 pounds of milk is about 12 gallons.


Milk is priced according to class, different classes or for different uses, liquid milk, butter, cheese, et cetera. Supply and demand as well as federal and state dairy policies determine milk prices. It's pretty complicated actually, but let's just say that in the past five years milk prices are down 46 cents per gallon.


You know what else? Of the price fetched per 100 weight, only one piece of the pie goes to the farmer. The rest of it covers the cost of the store including facilities, utilities, advertising, labor, processing and delivery so the farmer is getting pennies to the gallon. Want to hear how it gets worse from there? According to the most recent USDA survey on the cost to produce milk, the average farm spends more to produce milk than they earn. You want to know by how much? $3.55 per 100 weight, so according to numbers like that, when you buy a gallon of milk, the farmer looses 30 cents. Let's go back to dairy farmer and farmer advocate Sarah Lloyd and the problem of oversupply.


Sarah Lloyd (09:43):

We have no mechanism to organize that supply to reduce it. It's a collective action problem because we are not creating scarcity on the market to try to get the farmer price up. What's happened is like farmers get paid less and less, they're producing more and more so they're creating this vicious downward cycle.


Farm Girl (10:09):

Lloyd gives us an example, keep your eyes and ears on the banks, I will bet you didn't think that the dairy problems started here. I sure didn't.


Sarah Lloyd (10:18):

You can think about it like running on the treadmill that you're getting a certain margin and then someone's like, "Oh your input costs are going to go up and the price we pay you is going to go down, so now your margin is smaller." Then maybe you can't pay your bank what you owe them and then the bank says, "I know, how about I lend you more money and you can get more cows because then you'll be clearing more money across your books. Then you can service your debt to me, you can pay the loan payments." Now I'm just running faster on the treadmill.


Farm Girl (10:58):

We have too much milk on the market. We are supplying more than consumers can drink, so prices go down, but then farms operating on very thin or negative margins have to get more cows to bring in more money to pay their bank loans. More milk, it makes no sense.