Dairy farmers awash in milk, low prices

Virginia dairy farmers have always endured price fluctuation in milk prices. But the latest downswing has seen milk checks shrink by 35 percent the past two years, with little improvement in sight.

That’s why some dairy farmers welcomed news that the U.S. Department of Agriculture is purchasing 11 million pounds of excess cheese from private sources for use in food banks across the nation.

“The dairy industry in Virginia, and the nation as a whole, is suffering from decreased whole milk consumption,” explained Kyle Leonard, an Augusta County dairyman and member of the Virginia Farm Bureau Federation Dairy Advisory Committee. “That’s been our bread and butter; selling milk that people drink.

“Consumers, in general, for some reason aren’t drinking as much whole milk. And that’s bothersome because its nature’s most perfect food,” Leonard said.

A soft world market for dairy products and increased production by some dairymen also contributed to an oversupply of milk and lower prices at the farm, Leonard said. “Dairy farmers across the world are suffering,” he said. “Whether it’s in Europe or New Zealand, consumer demand has decreased.

“It’s difficult to make ends meet and we’re having to really tighten our belts as much as we can, and try to find a way to get consumers to drink more milk,” Leonard said.

A number of dairy and farm groups, including the American Farm Bureau Federation, asked the USDA to take steps to remove excess milk supplies from the marketplace. “The USDA’s action will help alleviate the tough realities of the market and keep family farmers in business at a time when too many are leaving,” said AFBF President Zippy Duvall. “More than 1,200 dairy farms went out of business in 2015 across the nation.”

The USDA estimated the value of the purchased cheese at $20 million. It will be sent to food banks across the nation as part of the USDA’s regular nutrition assistance programs.

While the cheese purchase could help reduce a backlog of dairy products, a long-term source of aid for some dairy farmers is the USDA’s Dairy Margin Protection Program. It’s only been in effect since 2014 and farmer enrollment in the program has been slow, said Tony Banks, VFBF assistant director of commodity marketing. The USDA has extended the MPP registration date for this year from Sept. 30 to Dec.16.