Not only does America have milk – it’s got a surplus of over 8 million metric tons, forcing dairy farms to shutter and farmers to simply start dumping millions of gallons of milk that far exceeds domestic and foreign demand.
Declining consumption, increased production, retaliatory tariffs and lower prices in the face of increased costs have been walloping American farmers for some two years now, according to the Reedsburg Times Press.
Northeastern states are the most affected by the glut. The State of Wisconsin has seen a net loss of more than 400 dairy farms this year alone, and in December last year, the state’s farmers dumped a record 160 million pounds of skim milk they couldn’t sell. That’s three times the amount they were forced to dump in 2012, according to CSMonitor.
By July, farmers in the Northeast had dumped 145 million pounds of milk, and 23.6 million pounds of that was dumped in July alone, according to Bloomberg.
Much of the blame will be laid on Canada, which moved last year to implement its own supply management by restricting dairy trade from the U.S.
But the blame isn’t all about Canada, and you have to follow some less direct paths to the end of this glut.
For instance, the European Union has also seen a surge in its exports of dairy, and because Russia in 2014 largely banned all dairy exports from the EU, the EU has tapped up other markets, pushing out American dairy.
Nor is it just about exports.
Americans, while enjoying a brief flirtation with a yogurt craze, are now weaning themselves off milk, which has always been the dairy farmers top revenue generator.
But American farmers aren’t necessarily like other industries from an operational perspective. They milk cows whether the market wants them to or not. They keep producing, even when supply is at the glut level. Then, it’s either shut down or find another way to put all the milk to use.
“Dairy farmers are free-market guys –