Dairy producers say closure of schools, restaurants and “panic buying” led to low demand

(AP Photo/Michael Conroy)

Dairy farmers facing unprecedented supply chain disruptions are dumping millions of gallons of excess milk and bracing for a prolonged downturn.

Images of farmers standing beside lagoons of their own product have become a viral phenomenon amid the coronavirus pandemic.

Unpasteurized milk cannot be donated.

“It’s happening all around the Midwest,” said Doug Leman, the executive director of Indiana Dairy Producers. “It’s been real disheartening. I do expect it to get worse before it gets better, as everything else is, but we’ll get through this.”

The mass closure of schools and restaurants — the milk market’s biggest consumers — led to a sharp decrease in dairy demand, according to industry experts.

Restaurants typically account for nearly 40% of Indiana’s cheese and butter consumption, Leman said.

The sudden downturn was preceded by a unexpected spike in demand he attributed to nationwide “panic buying.”

“People ran out to stores and they were hoarding milk,” Leman explained. “But the cows were milking the same amount, 24 hours a day. That just disrupted the whole process, from processors to delivery to refills.”

Processing and packaging plants struggled to keep up with rapid shifts in wholesale market and retail grocery store needs.

Panic buying patterns began tapering off after schools, restaurants, coffee shops and other food service businesses shut down, leading to a glut of milk on the market.

In a letter dated April 1, groups representing Midwestern dairy farmers and cooperatives urged the U.S. Department of Agriculture (USDA) to provide direct relief to farmers and commit to a “substantial purchase of dairy commodities” with the extensive purchasing power granted by the Coronavirus Aid, Relief and Economic Security (CARES) Act.

Most farmers directed to dispose of raw milk by dairy cooperatives are reimbursed for their product. Nevertheless, flushing milk into wastewater lagoons is “heartbreaking,” farmers said.

Indiana Gov. Eric Holcomb urged Hoosiers to increase consumer demand. He assured the state “there is no shortage of milk” during a virtual Statehouse briefing Tuesday.

“Winners drink milk,” Holcomb said. “We know that here in Indiana. We want more people to drink milk.”