A COVID-19 ‘gut punch’

Dairy cows gather in a barn at a farm within the GLOW region. Area dairy farms are facing a crisis of devastating proportions.

After years of suffering low milk prices and slogging through negative trends, 2020 was meant to be the light on the horizon for area dairy farmers.

They were seeking a beacon of hope and positivity, a small promise for a better tomorrow.

Rising all-milk prices — up $4.30 from the year prior — meant that, for the first time in a half decade, farmers would finally turn a small profit on their milk, not merely break even or, as had typically been the case, lose a large percentage on every dollar.

As farmers geared up their soils for spring plantings, the latest dairy market report from the National Milk Producers Federation highlighted “positive growth,” citing the continued improvement of dairy exports and a national increase in demand for milk and butter products.

“This started out as a good year for dairy farmers with strong milk prices,” said O-AT-KA Milk Products CEO Bill Schreiber. “That quickly evaporated.”

When cases of COVID-19, that deadly and pervasive global pandemic, exploded in major U.S. cities, leaders took action, ordering the shutdown of schools, restaurants and all non-essential businesses. They called it a ‘pause’ order, but as images of vacant city streets flickered on the nighttime television, portraying the ‘city that never sleeps’ as now cricket-silent, and highlighting the mass burials taking place in developed nations, the enormity of the situation settled in.

Life ground to a halt for most people, in most places.

But some things simply cannot be stopped — including life on local dairy farms, where neither livestock nor farmer has a way to scale back the production of its raw, perishable product.

“You can’t shut (milk) off,” said Rochelle Stein, co-owner of Stein farms in Le Roy and chair of the Genesee County Legislature. “You know the struggles of new mothers. A great deal of moms freeze their breast milk, and some of them donate because they can’t shut it off. That’s exactly what we’re dealing with here … Cows are cows. They’re going to milk. They’re going to produce as usual.”

Yes, even when demand for local dairy products has diminished significantly.

“Take a moment to think about all the cheeses, creams, and butters consumed when you dine out,” wrote Jodi Smith Kryzsiak, an economist at Upstate Niagara Cooperative, in a special market update issued earlier this month. “Now, just wipe away those orders — they’re largely gone.”

Estimates suggest that about half of all butter and cheese is sold through restaurants when they’re fully operational, while 7 percent of fluid milk goes to area schools. Now, with the closures that have forced some diners and establishments to shutter their doors, and still others to serve modified take-out only menus, “The orders from these entities are fractions of the typical volumes that flow through those channels,” Smith Kryzsiak wrote.

Now, area farmers are left with as much as 72,000 pounds of milk per day — a full tractor-trailer load — that may soon have no place to go.

“I am aware of farms that have been told to dump their milk into their digesters because there is no processor willing to process that milk on a given day,” Stein said. “Here, we are proceeding as usual because we are members of a cooperative and they have contracts to fulfill. We are very fortunate right now that we have not had any milk turned away.”

But Stein warns that could change in an instant.

“We are always at risk today, with less demand for dairy, to be told that there is nobody to process the milk.”

Then comes the dumping and disposal — even at “lifelines” like O-AT-KA, a dairy processing plant employing hundreds of workers.

“We’re the last stop,” Schreiber said. “There is no place else for that milk to go if we can’t process it.”

“We have had some milk dumped,” he admitted. “Very minimal. We did it one time.”

Thus enter the disheartening images and devastating videos that have begun to swallow the web — thousands of gallons of fresh milk gushing from milk trucks and into manure pits and mud — all of it wasted.

Some estimate that farmers are dumping as many as 3.7 million gallons of milk each day — 10 percent of all milk in the country going “into the lagoon or the digester or the manure pit,” Schreiber said.

“That’s 1,100 truckloads of milk a day hitting the ground.”

But with empty grocery store shelves and companies like Wal-Mart placing strict limitations on the purchase of products like milk and butter, how could this be happening?

Well, said Steve Ammerman, public affairs manager for the New York Farm Bureau, it’s certainly no fault of the farmers.

“This has been a confusing time for people who see empty store shelves and people in need, but then see farms having to dispose of their product,” he said. “It comes down to the major disruption across the food supply chain.”

While the need for products offered to our schools and restaurants has plummeted, demand in grocery stores has jumped — up 50 percent since the onset of the crisis, Ammerman said.

Producers simply weren’t prepared for a change-up of this magnitude.

“If the processor that was accepting a farm’s milk processed in bulk for the food service industry or small cartons for schools, they lost much of their customer base,” Ammerman said. “They cannot quickly change up processing lines and packaging needs and supplies to target different consumers.”

“Farms also typically don’t pasteurize, process and bottle milk themselves or keep cold storage capacity beyond a day or so,” he continued. “The cows don’t stop producing and there may be no place for the perishable milk to go at that point other than for it to be properly disposed of or land applied.”

And so, with no place left to go, it’s dumped.

But there are measures that can be taken to alleviate some of this waste.

“For grocery stores to be limiting the purchase of dairy foods today is an injustice to the fact that there is enough dairy to fill that grocery store shelf with dairy products,” Stein said. “There is no need for those limitations.”

And especially not when many area farms are already on their last legs.

“The past four to five years, the farmgate price for milk per hundredweight has been less than the cost of production,” Stein said. “Dairy farmers have been working on their equity … they had positioned themselves to make good, efficient investments in their business and they were just scraping to make ends meet.”

“All of the single-shot type of financial moves that people could make, they’ve already made,” she said. “The question becomes, where’s the next hole in your belt? How much more can you tighten down?”

In 2018, when prices per hundred pounds of milk were as low as $13.39, cooperatives thought the situation so dire that they sent suicide prevention letters with the monthly milk check.

Since the COVID-19 crisis, prices have plummeted about 30 percent owing to the supply chain disruption. Mere months ago, they’d been above $18 for the first time in years.

Prices are now about $12, Stein said: “well below the cost of production for most farms.”

And it happened almost overnight.

Officials, ranging from Stein herself to the U.S. Dairy Export Council President, have called the scenario devastating: “A kick behind the knees.” “A gut punch.”

Those viral images of gushing milk serve only as insult added to injury — each gallon representing endless hours of hard work and toil.

“Milk is what pays the bills,” Ammerman said.

As it’s literally dumped down the drain, the realities prove a worst nightmare for the “very quiet, humble backbone of most communities.”

“There is still too much milk than what the system can absorb right now,” Ammerman said. “Farmers have no control over that decision.”

Things are no different here in the GLOW region.

Though dairy farmers are putting their best foot forward in regard to innovation, finding ways to put milk into feed programs and to ensure that no drop is wasted, the ultimate decisions are out of their hands, Stein said.

And though she and all area farmers are doing everything in their power to mitigate waste and devastation, the extension of the New York State Pause Order until at least May 15 is no good news.

Late spring months are “critical for cashflow on dairy farms,” as inputs are purchased to prepare for the next calendar year, Stein says.

Feed costs, including silage, haylage, seed, fertilizer and pest management tools, represent about 30 percent of milk check costs, while labor is 50.

“That leaves you 20 percent to do your electricity, your veterinary needs, your equipment repairs,” Stein said. “It’s not a lot. And if you’re carrying any debt load, you have to get that out of there, too. It’s a scary time. And we all feel a loss of control.”

“Farmers are very proud, independent thinkers,” she said “The fact that we own and operate our own businesses demonstrates how proud and independent we are. We don’t ask for help easily.”

But now more than ever, they need the support of the community.

“Do what you can to create a demand,” Stein said.

Add a few extra sprinklings of cheese to your slice of pizza. Order takeout cheeseburgers. When you go to the grocery store, splurge on the ice cream and that extra carton of yogurt. Check with local food banks and pantries to see if they have voucher systems in place, or are able to accept cold dairy products.

“That extra few ounces of cheese may not matter much to you,” Stein said. “But it matters very much to us as producers. We need to create a local demand so processors have a customer. The only way to do that is to move dairy off the shelves.”

Legislation is in the works to alleviate some of the strain. Local lawmakers have sent letters urging support. The New York Farm Bureau has written to USDA Secretary Sonny Purdue requesting direct assistance, milk voucher and food buyback programs to help those in need.

Recently passed stimulus packages added funds to emergency food assistance programs like SNAP and WIC. Nine-and-a-half billion dollars has been allocated to dairy and other commodities.

But none of this will prove enough to save every farm, Stein said. Not unless immediate action is taken.

“There will be devastation without a program put in place, without adjustments in some of the costs of the farm regulation here in New York State especially, where we are held to different standards of the cost of labor, the cost of environmental capacities, the taxation,” Stein said. “The landscape will change, and not for the better. There’s a reality check today.”

Schreiber, too, shared a foreboding outlook:

“I don’t say this lightly,” he said. “Not everybody is going to survive, in terms of their business. Not everybody is going to come out the other end.”

(Reporter Scott DeSmit contributed to this report)

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