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
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
All of the photos were provided by the farmers and Pixabay. Merci beaucoup.
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)
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.
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.
Sarah Lloyd (11:16):
I took Economics 101 and I thought that when the price was low that that was supposed to signal me to lower my production because that's Economics 101. Supply and demand, price signals and because of these issues with the banks that I talked about, farmers stats not being able to pay their loans because the price is low. Instead of reducing their production, the bank loans them more money so they get more cows.
We kept getting this low price, but then the logic that was driving the production was not getting that signal and so production increased all these five years. I mean it just shifted from more smaller farms to fewer big farms, but they did not reduce production. That's why we have to look at some kind of a policy mechanism that can allow for us to manage the supply to actually fit the demand.
Farm Girl (12:30):
Before we get to any possible policy solutions, let's understand what's going on a little bit deeper on the farm, on the frontline. For example, what if a farmer wanted to reduce milk production to respond to a decrease in demand? What exactly does she tell the cows? "Hey girls, can you stop lactating so much, we have a production issue."
Sarah Lloyd (12:54):
There are some things that people can do, but they're not all easy. One thing you can do is you can change your feed ration and so you can back cows off a bit. It's not without consequences because then maybe later in their lactation they're not as productive.
Farm Girl (13:14):
There's no easy spigot type on, off valve on the cows and if you reduce their production and demand goes back up, you won't be able to meet it. There are other ways to reduce the supply of milk too.
Sarah Lloyd (13:27):
They can sell non-productive cows into the beef market. If a cow becomes less productive, it's a perfectly healthy animal but it's just not producing a lot of milk those animals go into the beef market.
Farm Girl (13:46):
This is called culling the herd. Culling means to kill some of them off. It's not an option that most farmers want to exercise, and now during COVID it's harder to find a place to slaughter your dairy cows because the meat processing plants are closed down or operating on very reduced volume.
Sarah Lloyd (14:08):
Now you may know there's a bit of a problem with the beef market because it's also getting slammed with COVID, shut downs. We're hearing about processing plants closing because the workers have COVID, and so that's not a great solution right now. I can try to sell my dairy cows to reduce my production, but I'm going to not get any money for them. Maybe I won't even be able to get them in to be sold because it's such a backup.
Farm Girl (14:43):
As Sarah has explained to us, oversupply of milk is a systemic problem. It's been going on for at least five years. The results, milk prices have dropped and in order to bring in more money, small farms have gone out of business and bigger farms are getting more cows to try to make ends meet on tight margins. Now during COVID, these issues are exacerbated. Milk processors can't handle the regular supply of milk because their customers like restaurants and schools are closed, so what happens then?
Sarah Lloyd (15:20):
There are farmers here in Wisconsin that received letters from their processor, the cheese maker that takes their milk, that ask for a 20% reduction. Just because if they didn't reduce 20%, the processor would need to dump the milk.
Farm Girl (15:38):
Cue the headlines and rivers of white milk going down the drain along with the money the farmers projected to bring in on their production. A lot of critics have been asking, "Well, why can't you just divert the milk that was intended for schools to the grocery stores instead?"
Sarah Lloyd (15:56):
A wholesale packaging is very different than what you buy in the grocery store, and so even though the grocery store sales have gone up, it's not enough to offset the loses in the wholesale or food service sector. If I have a plant that makes sour cream but I only make it in like big tubs like for a restaurant, I can't just shift into like store sizes because I don't even have those containers in stack.
Farm Girl (16:33):
We have a systemic overproduction of milk, sales out lets for milk, restaurants, schools and countries we export milk to are on pause. Dairy processors are backed up with products that are not moving, they can't take on any more milk. The cows are still innocently chewing their curd and making milk. What's more, it's not as simple as you might think to divert milk intended for say a restaurant or a school to a grocery store. Add to that, less dairy farms in local communities and more giant ones instead, so many issues stacked one on top of the other, no wonder there's a crisis.
Let's leave Wisconsin for a minute, we will come back to Sarah to talk about solutions in a minute, but first I want you to meet dairy farmer Tim Moffet. Like Sarah, Tim also has a job working off the farm as a comedian.
Tim Moffet (17:40):
My name's Tim, I'm a dairy farmer. Thank you, appreciate that. A bunch of lactose intolerant, non-cheese eating -- vegans. Any vegans? Too weak to raise your hand?
Farm Girl (18:00):
Tim has been telling jokes his whole life, it's natural for him.
Tim Moffet (18:04):
It's a defense mechanism I think in a set, when things get too serious crack a joke because I don't want to deal with this right now.
Farm Girl (18:13):
Well, there's plenty of seriousness in the dairy industry to fuel a lot of jokes, and so that's what Tim, Tim the dairy farmer does. He sneaks out of the back door of the barn and does standup comedy, mostly for farmers.
Tim Moffet (18:29):
All right, here's the stupidest joke I've ever written. What's a cow with no lips say? Oooow, because they don't have lips.
Farm Girl (18:50):
Ha. Ha. Ha. Ha.
Tim Moffet (18:53):
Glad I could make you laugh.
Farm Girl (18:56):
What do cows do for fun?
Tim Moffet (18:59):
Farm Girl (19:01):
They go to the moo-vies.
Tim Moffet (19:02):
Oh my God are we going down this road? What do you call a cow with no legs?
Farm Girl (19:14):
Tim Moffet (19:15):
Farm Girl (19:21):
Ha, ha, ha, ha.
Tim typically does standup locally once a week to stay sharp and to work out new material. Then he does about 30 gigs a year for companies, conferences and events where farmers are the main audience. His main message is twofold. If you're a farmer, keep laughing, it helps. If you're not a farmer, check in with one from time to time just to see how they're doing, farmers are stressed.
Tim Moffet (19:50):
I mean as a farmer you do get stressed, but you're dealing with stress on a daily basis. Today it might be a broken waterline, tomorrow could be a tax issue. Farmers have always been an overly proud type of person, "Well I don't need to be talking about this to nobody or nobody needs to know my business." They ended up keeping everything cooped up inside and stress, we all know stress will kill you quick just as quick as anything. I mean it just deteriorates everything.
Farm Girl (20:32):
Tim and his brother have been dairy farming together for 30 years, having grown up working with their dad raising beef. They started with two cows, grew to 500 and then switched to producing organic milk nine years ago with just 200 grass-fed cows. Tim and his brother consolidate their milk with other organic dairy farmers for sale through a coop.
Tim Moffet (20:55):
The state wide Florida, Georgia area coop and it all goes to Publix.
Farm Girl (21:02):
Publix is a supermarket chain that operates in the south eastern United States with the bulk of its 1,200 stores in Florida. During COVID supermarkets like Publix are experiencing a high demand for milk and they are trying to spread out what they have among their customers.
Tim Moffet (21:21):
They're limiting how much milk you can buy, like you can only buy two gallons but yet we're dumping milk everyday by the thousands of gallons.
Farm Girl (21:30):
Yup, Tim and his brother are dumping milk. Their cousins who have 5,000 dairy cows are dumping more, so what does dumping milk entail?
Tim Moffet (21:41):
Just open the valve on the tank, let it go down the drain. Or if you're in what's called a direct load situation where the milk comes out of the cows and then it goes through a giant chiller and then it gets directly loaded onto a tank or truck. In that situation they would just take the tank or truck out to the pasture or wherever and just let it rip. I've only had to dump a couple tanks, whereas some of the big dairies are dumping huge tanker loads every day.
Farm Girl (22:13):
Tim downplays the amount of milk he's had to dump, it's just how he is, but I need to let Wisconsin dairy farmer Sarah Lloyd chime in here on this because it is a big deal.
Sarah Lloyd (22:25):
As a farmer you think about all the time and care that you spent in raising the animals and keeping them healthy. 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. It's not just the economic loss, I mean yeah, it's wrong. It's wrong in so many ways.
Farm Girl (23:05):
The milk dumping crisis is becoming bad enough that some agricultural groups are trying to find other uses for well, spilled milk. Tim has tried a couple of these solutions.
Tim Moffet (23:18):
You can feed it back to the cows somewhat, that's always an option. I just spread it out as fertilizer.
Farm Girl (23:27):
Tim echoes what Wisconsin dairy farmer Sarah Lloyd was telling us about the dairy industry. It's not a secret.
Tim Moffet (23:34):
There's always been too much supply.
Farm Girl (23:37):
That supply issue is made worse by milk that comes to Florida from other states.
Tim Moffet (23:42):
They send milk in from Michigan and Ohio and wherever else, they ship it down here cheaper than what they pay us.
Farm Girl (23:50):
Tim notes how COVID has made the existing problems worse.
Tim Moffet (23:54):
See in the dairy industry right now, March is actually, this is our booming time, March and April. This is when we normally have an abundance of milk, but normally we have schools and restaurants and whatever to take it. Here again we're in an oversupply situation and the schools and the restaurants and whatnot are closed down so it makes it even more.
Farm Girl (24:22):
Sarah Lloyd has been in the dairy business all her life. She has experience on the farm, she works with other farmers through the Farmers Union. She applies her doctorate in Rural Sociology to thinking about the issues plaguing the dairy industry on every level. When Sarah and I spoke, the milk dumping headlines had already broken. They started in Wisconsin but her farm had not dumped any milk and she didn't actually know of anyone who had to dump milk. It was happening of course, but from talking with her milk dumping did not seem as widespread as the headlines made it appear.
The problems in the dairy industry are real though, oversupply persists, prices for milk are low and the milk money pie is not divided in such a way as to give the farmers a fair price. The number of family dairy farms have gone down while big farms have taken on more cows to make payments to the bank. Then COVID hit and the problems became more pronounced.
Sarah has a lot of ideas on how to address the dairy crisis, exploring other countries best practices, talking across supply chains, developing local and regional food systems, well thought out aid and incentives and something that you can do too. Every single solution involves brave conversations with participants from across the supply chain from the farmer to the consumer and everyone in between.
Sarah Lloyd (26:00):
One of the things that the university is interested in doing is trying to provide the research and analysis for the farmers and the farm organizations who want to try to build policy solutions. We're trying to convene the conversations between the researchers and the farmers and the advocates. It's going to take trust building and relationship building, so I think there's definitely momentum around coming up with these better policy situations, trying to build these relationships between and across the supply chain.
Farm Girl (26:43):
Sarah worries that if talking isn't central to the solution, that misunderstandings will prevail. She is concerned about the entire supply chain, not just the dairy farmer, but yes, also the dairy farmer.