Inside: Dairy Market
Milk supply leads to dumping actions in US
Milk supply in the United States (US) was ahead of 2017 for the fourth consecutive month in April. Some states lack the capacity to process the milk. This leads to dumping actions.
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Compared to the same month last year, American dairy farmers milked 0,7% more to 7,8 million tons. The higher milk supply is a result of the increased dairy herd. In April, the US had 14.000 more animals than in the same month in 2017. In total, dairy farmers milked 8,74 million cows in April. However, compared to the dairy herd in March, a reduction of 2.000 cows is visible.
The shrinking dairy herd is a result of this the low milk price that American dairy farmers get paid. The price is so low that dairy farmers in the state of Wisconsin have asked the US Congress for emergency aid. However, the US Department of Agriculture (USDA) expects better times to emerge. In their forecasts they assume that the milk price will increase next year (2018/2019). This is due to a shrinking dairy herd.
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Milk supply in April was above the 2017 level, although the difference was greater in March.
Milk dumping in the northeast
In the northeastern US, with states such as Vermont and New York, the increasing milk supply is causing problems. For example, several milk processors in that region (including: O'Lakes dairy, Agri-Mark, St. Albans Cooperative Creamery, Dairy Farmers of America) have started dumping actions, which have been approved by the federal government. In practice there are 2 types of dumping.
In the most favorable case, the milk is transported to the factory to be skimmed. The cream is then used for butter production, while the skimmed milk is dumped. This is because there is a lack of processing capacity to turn it into skimmed milk powder. In a less favorable case, the raw milk is already dumped on the farm, often in the manure pits. This form of dumping is allowed at least until July 15, although it cannot be ruled out that the dumping period will be extended.
Milk money has been paid
In principle, the dairy farmers in question do not experience any financial consequences from the dumping actions and are also paid milk money. According to Bob Wellington of Agri-Mark, the increasing milk supply is not so much the problem; according to him, it lacks processing capacity. By the way, this problem is not new. Significant volumes of milk were also dumped in 2015 (53.900) and 2017 (77.110 tonnes).