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Dairy farmers dumping milk as demand drops

Some Ontario dairy farmers have been told to dump their excess milk, as COVID-19 closures have caused the demand for dairy products to drop drastically.

With schools, hotels, restaurants and coffee shops now closed, the commercial sales of key dairy products, including cream, butter and milk, that set the pace for production have ground to a halt.

The situation is very similar in the U.S., though the differences in supply management systems between the two countries create some salient differences. For more detail on dairy milk-dumping in the U.S., the following article presents the nuances of the issue: https://www.dairyreporter.com/Article/2020/04/06/US-dairy-farmers-dumping-milk-due-to-coronavirus-situation#

Hard work down the drain

“It’s not a good feeling. [This is] something that I’ve worked hard for — and all my hard work is going down the drain,” said Remko Steen, a dairy farmer from Tillsonburg, Ont.

Last week, Steen said he was forced to dump about 12,000 litres of perfectly good milk down the drain.

The Dairy Farmers of Ontario (DFO) — the body that sets milk production quotas in the province — began ordering farmers to get rid of their surplus milk last week. In an email to CBC, CEO Cheryl Smith said only once before in the agency’s 55-year history have farmers been asked to throw out what they produce.

It’s not just the business and restaurant closures causing the supply problem, dairy farmers say, but also bottlenecks at the grocery store.

The problems started about two weeks ago, when shoppers swarmed Ontario’s grocery stores, fearing essentials would run out. Soon, many coolers were empty of all milk products, so some grocers responded by clamping down on panic buying, restricting buyers to one or two bags of milk at a time.

“We’re hoping we can get the grocery stores to stop limiting the milk, so that we can move this milk and get it [on] the shelves instead of dumping it,” Steen said.

Supply and demand ups and downs

For fellow dairy farmer Melinda Foster-Marshall, the past week has been a quota roller-coaster.

On Monday, DFO was offering incentives to farms that could ramp up milk output to meet the demand caused by the panic buying. But by Friday, the board warned that the tanker truck may not come to pick up her milk at all.

“You’re sitting here waiting, and you don’t really know what direction you’re going to go. It’s hard to plan for anything,” said Foster-Marshall, who runs an operation near Stittsville, Ont.

Canada’s dairy industry is overseen by supply management, a system that allows specific sectors to limit the supply of their products to what Canadians are expected to consume in order to ensure predictable, stable prices. In order to sell their products, a farmer must hold a quota, somewhat like a licence, to produce up to a set amount.

In a co-op system, all farmers whose product is marketed by the board will share the losses that come with the collapse in demand.

Farmers can manipulate a cow’s diet to reduce the amount of milk it produces, but those who try to limit output by restricting the amount the animal eats may end up endangering its health.