Money & Business

Milk Group Turns to Advocacy to Fight Dwindling Dairy Demand

By / Oct 26, 2016 (StockSnap/Pixabay)

An excess of milk is creating an imbalance in the supply and demand for dairy, not to mention a drop in revenue for dairy farmers. The National Milk Producing Federation is hoping to start turning things around with some advocacy.

“Got Milk?”

Dairy farmers do, but it seems that fewer consumers are wanting a milk mustache these days.

In fact, dairy farmers dumped more than 43 million gallons of leftover milk in the first eight months of 2016, according to data from the U.S. Department of Agriculture (USDA). That’s the most spilled milk in decades.

Although Christopher Galen, senior vice president of communications at the National Milk Producing Federation (NMPF), said that boom-and-bust cycles in the dairy industry aren’t unusual.

“Really throughout the 21st century, we’ve really been on a three- to four-year cycle,” Galen said. “Where you have a year of high prices, a year of middling prices, and a year of low prices, and then the pendulum swings back.”

However, 2016 marks a second year of low prices for dairy farmers. One of the ironies, Galen said, is that when farmers are getting low prices for their milk, oftentimes it’s an incentive for them to produce a little more milk to make up the difference.

“If the milk you were getting was worth $2 a gallon and now it’s worth $1.50, in order to make as much revenue as when it was $2 a gallon, you’ve got to increase your production,” Galen said. He explained that if just one farmer does this, then it’s just a smart small business decision, but if a bunch of farmers do this, it starts to tip the scales of global supply and demand.

As a result, dairy farmers are struggling. In New Hampshire, for instance, 19 of the state’s 120 dairy farmers have left the dairy business. But it’s not just an American problem—farmers in the UK, New Zealand, and all across Europe are facing low dairy prices too.

While NMPF, which represents dairy farmers who collectively produce the majority of America’s milk supply, can’t fix this global situation, it is trying to help its members in two specific ways: by increasing the demand for dairy products and ensuring the government has an adequate economic safety net in place for dairy farmers.

“We’re trying to find ways, through policy, to increase demand, and that’s both short term and long term,” said Galen. “Longer term, we’re supporting the Trans-Pacific Partnership because it will increase our opportunities to export with some of the other countries involved with TPP.”

In the shorter term, NMPF is also working on its members’ behalf. This summer, the group asked the USDA to purchase some of the country’s surplus cheese and distribute it to foodbanks, which the USDA did before the close of the fiscal year in September. This fall and winter, the USDA will purchase more cheese.

However, Galen said that NMPF’s biggest policy-related goal is trying to improve the safety-net program for dairy farmers, which was last tweaked in the 2014 Farm Bill. The group will be working with its members to develop some recommendations to Congress about what they’d like to see changed if the opportunity presents itself.

“The idea is to get some sort of cushion or some sort of safety net that keeps people from losing their farms,” he said. “It’s not going to keep everyone in business, but at least helps take some of the edges off, so we don’t have a catastrophic situation.”

Emily Bratcher

Emily Bratcher is a Contributing Editor for Associations Now. More »

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