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Vermont dairy farms have dumped more than 60,000 gallons of milk since the beginning of April, as state and federal measures to curb the spread of the new coronavirus continue to wreak havoc on the dairy industry.
Forced closures of schools and restaurants across the region, combined with limits in supermarkets on how much milk customers can purchase at one time, have lead to an oversupply of milk in Vermont. Farmers have dumped nine loads, or roughly 63,000 gallons, to since April 1, according to the Vermont Agency of Agriculture.
“It’s plenty of milk, but it isn’t huge yet,” Diane Bothfeld, director of dairy policy at the Agency of Agriculture, told Senate lawmakers Thursday.
“But that is the first eight days, so that’s like a load a day so far,” she said. “It’s certainly a concern area.”
Bothfeld said the agency is particularly concerned that there are signs in supermarkets across the state telling people not to buy too many dairy products, when in fact there is a surplus of milk.
The Vermont Agency of Agriculture has sent a letter to every retailer in the state and is currently in communication with Hannaford, Price Chopper, Shaw’s and the Retail Grocers Association asking supermarkets to remove those warnings.
“The message is difficult, within your communities, to say ‘limit your purchase of gallon jugs to two’ when milk is being dumped,” Bothfeld said.
The Agency of Agriculture is also looking at ways to process the excess milk into yogurt and cheese, but does not expect a quick solution to the oversupply.
“Because of our size and scope in Vermont, we’ll never eat our way out of this,” Bothfeld said. “We make way too much milk.”
“We can process more, but we don’t have enough people in Vermont itself to consume all this product,” she added.
Last week, Anson Tebbetts, secretary of the Agency of Agriculture, said the worst months for dairy producers will likely be between April and August as compensation for dairy farmers falls and as the production of milk continues to outpace the demand.
Milk prices in the Northeast took a hit in March as the economy and life as usual ground to a halt — falling 10% in the last 14 days of the month. Prices tumbled to $15.80 per hundredweight, far below the region’s cost of production.
Catherine de Ronde, a senior economist at Agri-Mark Cabot dairy cooperative, said that if milk prices continue to fall in coming months, the average Vermont dairy farm could see an annual revenue loss of about $175,000.
“We’re going to be facing a rapid loss of dairy farms and we’re really jeopardizing the security of our local food systems and our rural communities,” de Ronde said during a Thursday conference call on the state of the dairy industry hosted by Rep. Peter Welch, D-Vt.
De Ronde added that nationally, based on conservative economic forecasts, 10% of dairy produced in the next several months will not have a market because of the economic shut down caused by Covid-19.
In response to the falling milk prices and in an effort to deliver direct support to Vermont’s dairy farmers, Tebbetts drafted a letter to U.S. Secretary of Agriculture Sonny Perdue asking the department to set a milk floor price of $19.50 per hundredweight for the next four months.
On April 1, Agri-Mark Cabot circulated a letter asking for similar relief measures.
During the same conference call, Kyle Thygesen, the milk buyer for Stonyfield Organic, told Welch and others that demand for Stonyfield Organic yogurt has been up by 25-30% over the last four weeks.
Thygesen added that so far there is no dumping of organic milk in the state but that he is concerned this could shift in the next three to six weeks depending on supplies and buying habits.
“Our farmers seem to be okay, but they are very concerned about their market and also the market of our conventional neighbors,” Thygesen said.
The economic crisis has been particularly hard for the state’s cheesemakers that heavily rely on restaurants throughout the region buying their goods. They have seen a 50-70% drop in sales in recent weeks.
The Vermont Cheese Council has been working closely with the Agency of Agriculture to find ways to support cheesemakers and just launched an online sales directory to encourage consumers to have a direct point of contact with a producer.
Marty Mundy, the executive director of the Vermont Cheese Council, said in a statement that the loss of revenue from the closure of restaurants in New York City and Boston has left its mark on the state’s cheesemakers, but he is hopeful more people will reach out directly to farms to make purchases.
“How consumers choose to spend their money during this time will have a big impact on the sustainability of local dairy farmers and the cheese industry in the region,” Mundy said.
Meanwhile, Tebbetts and the agency have been working with large supermarkets, including Hannaford, to expedite the process for them to take on new food providers and get Vermont’s cheeses onto the shelves.
“Some of those new products should be showing up,” Bothfeld said. “On a side note, that’s occurring with beer as well. So you’re going to see more craft beers at both Shaw’s and Hannaford.”
