GNN Note – Profits over people will not end well for those participating in this scheme.
Frustrated shoppers have reason to cry over spilled milk.
Dairy farmers are dumping millions of gallons of the stuff. Meanwhile, some dairy products are sold out at many grocery stores across the country, due to intense demand for basic household goods amid the coronavirus crisis.
USA Today reports on one farm in Wisconsin:
About 7 o’clock Tuesday night, Golden E Dairy got the call that any dairy farmer would dread. They were being asked to dump 25,000 gallons of fresh milk a day because there was no place for it to go as the marketplace for dairy products has been gutted by the closure of restaurants, schools, hotels and food service businesses.
An hour later, the family-run farm near West Bend, Wisconsin, opened the spigot and started flushing its milk into a wastewater lagoon — 220,000 pounds a day through next Monday.
No place to go? What about empty dairy aisles? Aren’t those better destinations than drainage pits?
According to analysts, it is tricky to switch from dead markets to a surging one. As Gizmodo explains:
…although consumer demand for milk in grocery stores is booming, it isn’t easy for suppliers who normally make bulk products for restaurants to suddenly make the transition and make items for consumers. For example, it would cost millions of dollars simply to install the new equipment required to switch from making barrel cheese, used in restaurants, to making cheese wedges, used by grocers, per Reuters.
And the coronavirus crisis has made the shift especially challenging, as Yahoo Finance points out:
Mass closures of restaurants and schools have forced a sudden shift from those wholesale food-service markets to retail grocery stores, creating logistical and packaging nightmares for plants processing milk, butter and cheese. Trucking companies that haul dairy products are scrambling to get enough drivers as some who fear the virus have stopped working. And sales to major dairy export markets have dried up as the food-service sector largely shuts down globally.
Another issue is that it is illegal to sell unpasteurized milk in many states, Wisconsin included, so if dairy processors aren’t buying it from farmers, it goes to waste.
And farmers have narrow time windows to solve all these problems, because milk is so perishable.
It all adds up to a glut of milk at the dairy even while there are shortages at the stores.