Dairy leaders shift plan to connect supply with needs
April 10, 2020
Dairy industry leaders are abruptly shifting their focus as the ongoing COVID-19 pandemic has not only wreaked havoc on communities all across the nation but also on dairy farmers and the supply chain -- a very different story from just a few short months ago.
“I think it’s fair to say the pandemic has been a gut punch to commodity prices across the board for American agriculture, but probably most significant for the dairy industry and dairy farmers,” U.S. Dairy Export Council chief executive officer and president Tom Vilsack said. “We’ve seen Class 3 milk prices decline by 26% [and] Class 4 milk prices by 36% in recent days -- a more significant drop than just about any other commodity has endured.”
Furthermore, reports of dairy farmers dumping milk, dairy product rationing in retail grocery stores and food banks running out of items have surfaced, highlighting only a small portion of the very challenging and complex situation.
“The first and most critical is to do things to get product in the hands of people immediately,” Dairy Management Inc. (DMI) CEO Tom Gallagher noted during a conference call Friday. “That’s a dire need.”
He added, “Our challenge that we’ve tried to deal with is where we can connect those disconnected supply chains to new supply chains.”
Industry leaders have been working 24/7 to reallocate supply where it is needed the most, four emergency action teams have been established to solve problems and staff have been realigned to address the most pressing needs.
“There is not one answer in terms of what the [dairy] checkoff can do," Gallagher said. "We have to try a ton of different things, and hopefully, that will add up.”
Due to the extraordinary challenges, DMI leaders have outlined a shift in its business that they say will help farmers weather the growing challenges they face amid the COVID-19 pandemic. A letter has been sent to Agriculture Secretary Sonny Perdue to share the new focus.
The outline prioritizes work focused on three key areas: schools, hunger and foodservice and industry partnerships.
In the letter, DMI president Barb O’Brien said: “With unprecedented impact on virtually every aspect of the dairy sector -- from farm inputs and production and workforce challenges to disruption in transportation, processing, warehousing and marketplace access -- DMI and its network of 16 state and regional units have quickly responded to the still deepening business and cultural shifts occurring as a result of the global COVID-19 pandemic.”
O’Brien said the checkoff’s mission of building sales and trust on behalf of U.S. dairy farmers and importers will prioritize limiting milk disposal and redirecting supply to serve those in greatest need over the next two months.
Details of the effort include:
* Ensuring access to school meals. By working through the farmer-founded GENYOUth organization, local promotion groups, the U.S. Department of Agriculture and technology and food companies such as Domino’s, YUM! Brands and others, the goal is to ensure that school children will continue to receive meals. This is critical not only for the health of children but to maintain the 7% of fluid milk that flows through the school channel.
GENYOUth created the “For Schools’ Sake – Help Us Feed Our Nation’s Kids!” movement, which so far has generated $3 million in corporate and individual donations. More than 5,000 applications have been submitted by school districts across the country requesting up to $3,000 grants for equipment, packaging and other supplies as school foodservice professionals work tirelessly to feed at-risk children. GENYOUth seeks to raise an additional $12 million to satisfy these requests.
For more on the current efforts by GENYOUth, listen to this week’s "Feedstuffs in Focus" podcast.
* Helping food banks meet growing need. DMI is working with cooperatives and companies, quick-service and foodservice partners and Feeding America to broaden access to dairy foods for the growing number of people facing food insecurity. The checkoff is convening cooperative leaders in search of a destination for excess supply with local processors and food banks. This effort already is diverting more than 100,000 gal. of milk per week into the hunger system in Texas, New Mexico, Indiana, Michigan, Ohio, New York and New England.
* Convening partners across supply chain. Working with domestic and international partners to realign the supply of dairy products to those in need while working through the U.S. Dairy Export Council to assure that dairy products continue to flow or resume flowing into the critical export market.
After more than 10 years of partnership with dairy farmers, Domino’s is working with GENYOUth and local organizations to pilot a grab-and-go meal program at 31 public school sites in Miami, Fla. So far, approximately 23,000 meals have been made available, and similar opportunities through other franchisees in Michigan and other locations are being explored.
“The dairy checkoff has earned the knowledge, credibility and relationships to work across the chain to accomplish — on farmers’ behalf — what no other company or sector can do alone,” O’Brien said. “We are urgently executing these strategies across the U.S. to help dairy farmers in this time of crisis, which is more important now than ever in our history.”