Why Are Dairy Farmers Dumping Milk?

The past few years have presented some unprecedented challenges to the US dairy industry. Faced by tariffs abroad and falling demand at home, farmers across the country have been struggling to make ends meet. And that was before the pandemic.

Over the last two months, the COVID-19 emergency has been pushing the US dairy industry to the absolute breaking point. Today, there are reports of dairy farmers being forced to simply dump huge quantities of milk. What, exactly, is going on here?

As experts in agricultural loans and ranch refinancing, we hear a lot of discussion around this top. In this article, we’ll share with you what we’ve learned.

A Sudden and Sweeping Change for the Dairy Industry

Prior to the onset of the COVID-19 pandemic, a huge portion of the dairy industry’s profits came from school cafeterias. Those small cardboard milk containers, as it turns out, were a sizable part of the dairy industry’s economic foundation. Now that schools across the country have been forced to close due to the pandemic, all of that’s suddenly changed.

The restaurant industry, which was another major purchaser of dairy products, has also been forced to indefinitely close up shop. This has been another severe blow to an already-struggling dairy industry.

Millions of Gallons of Milk Being Dumped Across the United States

The result? A massive surplus of dairy products. According to the Wall Street Journal, US dairy farmers are now left with 10% more milk than they can sell. And with no one to sell to, dairy farmers are now being forced to simply dump huge quantities of milk. In April, it was estimated that between 2.7 and 3.7 million gallons of milk were dumped every day. It’s impossible to even wrap our minds around such staggeringly high numbers. And it’s difficult to predict at this point what the long-term economic effects of this crisis will be. 

Keep Your Property Protected with Ranch Refinancing

What can be said definitively at this point is that this pandemic will affect every corner of the dairy industry. In order to stay protected, it’s important for US dairy farmers to have a strong financial strategy in place. Ranch refinancing, in particular, can do a great deal to help you maintain your financial independence in a post-pandemic world. To get connected with ranch refi options that can keep your property protected during COVID-19, give us a call today!