It would not be fair to say that the dairy industry has been hurting like other Ag industries. If you were to take a snapshot of just 2020 and the COVID-19 pandemic, you would still see dairy taking a large hit. Producers dumping milk because the supply chain is unable to handle it, and no market for the milk that would normally have gone to the foodservice industry. We saw farmers literally pouring their livelihoods down the drain. Now compound that with the prior years of depressed prices, and dairy has taken more than its fair share of lumps. This was supposed to be their year after all. One dairy industry executive says there are some positives that are happening despite the pandemic.
Michael Dykes is the President and CEO of the International Dairy Foods Association (IDFA). He says while there is adversity because of COVID-19, but the industry was seeing positive momentum in the six preceding months. Momentum like this cannot be ignored. He compares the positive factors against losing 50% of their market in the past few weeks.
Losing that market share carries a big price tag. Dykes says they estimated that the losses to the dairy industry would be between five and ten billion dollars. However, there has been a surge in retail demand due to more people eating at home. It wasn?t enough to offset the foodservice losses, but it is still positive on the consumer side.
Dykes says the IDFA was adamant in telling the United States Department of Agriculture (USDA) that any food purchases made by USDA should not be put into storage. Not only would this be negative pressure on the markets over the next few years, it would not help anybody. They wanted to see that food go out to help people whose lives had been affected by COVID-19.
They were pleased with the USDA?s decision to go with the food box program, and many of their members are helping with filling the boxes. They are able to use their supply network for the foodservice industry to help fulfill this need.
Dykes says their producer members are doing all they can to keep milk inventory, so producers are not having to dump milk down the drain. However, the producers need to have the capital to work with when they have contracts that have been canceled and they are still buying milk to help producers. To that end, the IDFA is happy to see loans available from the USDA that will help these producers keep their employees paid, farmers supported as much as they are able.
Dyes says despite the challenges of COVID-19, consumer demand is strong, and they are keeping the supply chain intact.
The dairy industry has been no stranger to fighting through difficult times. Hopefully, with assistance to producers, they can fight through one more and reach that light at the end of the tunnel they have waited half a decade to reach.
