Lower demand forces farmers to dump milk

Dairy farmers across Canada have been dumping raw milk because of market issues caused by the COVID-19 pandemic.

The Dairy Farmers of Canada said in a statement last week that the last thing anyone wants to see is milk being discarded, but the drop in demand for some products, as well as supply chain issues, have left farmers with little choice.

David Wiens, chair of the Dairy Farmers of Manitoba and vice-president of the Dairy Farmers of Canada, said the near complete shutdown of the restaurant industry has caused demand for key dairy products to decline.

As well, there have been kinks in the supply chain, he added.

He said while demand for dairy from restaurants has decreased, there has been an increase in demand for fluid milk at grocery stores.

Processors and retailers have been struggling to meet this increase, he said, pointing to a combination of many factors.

For instance, processors can’t increase fluid milk production overnight.

Further, restaurants and retailers have distinct distribution systems and are often served by different processors and distributors. Redirecting product would take time and co-ordination.

As well, changing consumer buying behaviour adds to the problem. When they stockpile and buy less frequently, the system has to re-forecast demand.

Therefore, the milk that was meant for restaurants, but could have been diverted to produce more retail fluid milk, gets dumped.

“With the COVID-19 pandemic, the impact has been unpredictable at best,” Wiens said. “The retailers and processors are trying to adjust to what this new normal is going to be.”

Dan Wong, president of the Western Dairy Council, said a combination of factors have contributed to the issue.

“I will say, though, the drop off in restaurants has been really noticeable. There is no question that has had a huge impact,” he said.

Canada isn’t the only country dumping raw milk and milk products because of the crisis.

Reports from the United States indicate dairy farmers have been dumping milk because of low demand. Key markets, like schools, restaurants and coffee shops have been obliterated.

Even though it’s been extremely difficult to find a home for dairy products, farmers can’t immediately reduce the amount of milk they produce. Cows must continue to be milked to keep them comfortable and well.

In Canada, Wiens said farmers won’t decrease supply just yet.

He said milk boards across the country will assess the market over the next few weeks before they make a decision on whether to reduce production.

He suggested it’s possible processors could increase fluid milk output.

“With more people being home now, our meal patterns are going to change. So, how does that impact the various products?” he said. “Once we have a better picture of that, we will know whether we should be sustaining this level of production.”

In Saskatchewan, SaskMilk said raw milk will be dumped as a result of the changing market.

“While every effort is made to make use of all milk produced, it is not always possible for all milk to be pasteurized and packaged at this time,” it said in a statement.

In Alberta, raw milk will also be dumped, said Karlee Conway, a communications specialist with Alberta Milk. She said the discarding of milk products has been a global trend.

“It’s a really unpredictable situation,” she said. “Our industry is based on consumer demand, so when we can’t forecast this, it’s really difficult to make those decisions about telling farmers how much they can produce.”

The supply of milk will likely remain at the level it is currently, she said, but added it’s still all unknown.

“I think once we get used to what COVID-19 means for us in this new normal, from here until likely for a while, we’ll hopefully have a more predictable market,” she said.

The Dairy Farmers of Canada has said it’s collaborating with organizations to use as much milk as possible. This includes donating to food banks.

Conway said some of the discarded milk in Alberta is sent to disposal sites. One disposal site, the biogas and cogeneration plant in Lethbridge, turns the milk into electricity.

She noted that raw milk must be pasteurized before it can be sold to retailers. It isn’t something most people consume, she said.

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