Dairy: Farmers on Track to Produce the Most Milk Ever this Year- Pouring out Tens of Millions of Gallons of Excess

Kelsey Gee reported yesterday at The Wall Street Journal Online that, “U.S. agricultural officials stepped in to help dairy farmers for the second time in less than three months, pledging to buy another $20 million worth of cheddar cheese as prices remain the lowest in years.

Dairy farmers are on track to produce the most milk ever this year. In August, they urged the U.S. Department of Agriculture to support the market by buying as much as $150 million worth of products for food pantries and other government programs. The USDA initially said it would buy $20 million worth of cheese, or around 11 million pounds, two months ago.

“‘USDA is making use of every tool that we have to help them,’ Agriculture Secretary Tom Vilsack said after regulators met dairy producers on Tuesday in La Crosse, Wis.”

Ms. Gee explained that, “U.S. farmers are reckoning with a glut in commodities from corn and soybeans to pork and poultry, thanks to favorable weather at home and skyrocketing output globally.

“The oversupply is expected to prompt the third straight year of falling farm incomes. U.S. dairy farmers in August were making $17.10 per hundred pounds of milk, down 30% since prices hit records two years ago.”

Meanwhile, in an article posted today at The Wall Street Journal Online (“America’s Dairy Farmers Dump 43 Million Gallons of Excess Milk“), Ms. Gee reported that, “Farmers in the U.S. are pouring out tens of millions of gallons of excess milk, amid a massive glut that has slashed prices and has filled warehouses with cheese.

More than 43 million gallons’ worth of milk have ended up in fields, manure lagoons or animal feed, or have been lost on truck routes or discarded at plants, according to data from the U.S. Department of Agriculture. That is enough milk to fill 66 Olympic swimming pools, and the most wasted in at least 16 years’ worth of data requested by The Wall Street Journal.”

Ms. Gee indicated that, “Desperate producers are working to find new uses for the excess, like getting more milk into school lunches, and in revamped tacos and Egg McMuffins. But many can’t even afford to transport raw milk to market at current prices, which have plunged 36% on average since prices hit records in 2014.”

Today’s article added that, “Dairy and meat producers in the U.S. and abroad expanded their operations two years ago in response to a shortage, setting the stage for the current global glut.

“American farmers are in the process of harvesting record-large corn and soybean crops, and meatpackers are now producing the most ever meat and poultry. As a result, food prices in the U.S. have plummeted and farm incomes this year are headed for their third consecutive drop.”

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