CLACKAMAS COUNTY, Ore. (KOIN) — As dairy farmers in states across the country dump tens of thousands of gallons of milk due to backups at processing facilities and other supply chain complications, many onlookers are left asking: Why?
Industry experts say they haven’t heard of farmers in Oregon or Washington having to dump milk yet, but as KOIN 6 News reported last week, they face many of the same problems as their counterparts in other states. Exports have decreased and big domestic customers like schools and restaurants are closed.
Here are a few of the questions readers have asked.
Why don’t they just turn the milk into something else?
Dairy experts say many farms and processors are trying to, but it takes time.
In the Midwest and other places where we’ve seen farmers dumping milk, it’s generally because the processing facilities are backed up or struggling with supply chain changes.
“Each processing plant generally has a certain purpose,” Kimmi Devaney, communications director for Dairy Farmers of Washington said. “There’s a cheese plant, a milk plant, a butter plant, and a drying facility to create dry milk powder. The dry milk powder plant can’t just pivot and become a cheese plant. A cheese plant can’t just pivot and become a yogurt plant overnight.”
Processors are also having to change the way they package existing products. For example, they may have previously produced whole pallets of dry milk powder intended for exports (now reduced). Or a cheese processor may have produced bags of shredded cheese in excess of 50 pounds, then distributed those huge bags to pizza companies or restaurants (significantly reduced).
“People don’t need a pallet of dry milk powder at their homes,” Devaney said. “They don’t need a 50 pound bag of cheese at their homes. So as they’re trying to get that milk redirected into the plants that package for retail, such as grocery stores, that’s where you’re seeing that backup of milk.”
Why don’t they just donate it to schools/food banks/nursing homes/etc.?
The short answer; it’s illegal in many states.
If you have 10,000 pounds of milk in a tanker “you can’t just back that up to a food bank and say, ‘Here you go. Here’s your milk.’ Or back it up to some family’s home,” Devaney said.
The milk farmers are dumping comes straight from the cows and has not been pasteurized or homogenized yet (because of the processing backups). Unpasteurized milk (also called raw milk) is considered a “potentially hazardous product.” According to the Washington State Department of Agriculture, Salmonella, E. Coli and other organisms can occur in raw milk and cause illness. It is legal to sell raw milk in Washington, but only by licensed producers and processors who must follow additional regulations.
Oregon law is even stricter. You can only sell raw milk if you have three dairy cows or fewer, and raw milk can only be sold on the farm where it was produced.
I don’t feel bad for farmers. Why is milk so expensive, anyway?
To break even, Devaney said dairy farmers need to be paid about $17-$18 per 100 pounds of milk they sell. One gallon of milk weighs about 8.6 pounds. So to break even, they need to get approximately $1.51 per gallon that you buy in the store. This week, I bought a gallon of milk at Safeway for $1.99.
There are many other people in the supply chain after the milk leaves the farm. It has to go to the processing plant, then there’s packaging, and then it goes to retail and distribution, Devaney said. All of those people have to get paid too.
Right now, dairy futures are in the $12 to $14 dollar range, meaning farmers might expect to get around $1.12 per gallon, lower than the amount they need to break even.