As much as 7% of milk products nationwide were dumped in the first week of April, as milk producers could not sell milk to bottlers, with contracts for school lunches and restaurants evaporating due to massive closures and stay-at-home social distancing, the Wall Street Journal reported.
Here in the Inland Empire, several smaller dairy farms still exist, mostly in Chino, south Ontario and near San Jacinto. Since the late 1980s, many have moved or closed, the valuable land sold for housing and warehouse development.
Michael Oosten, 34, owner of Marvo Holsteins Dairy in Lakeview, near San Jacinto in unincorporated Riverside County, sat for a phone interview on Tuesday, April 14, on how Southern California dairy farmers are doing during this crisis.
Q: How did your farm get started?
A: We’ve been at this location since 1988. My grandfather started the dairy in 1945 in the Cerritos area. There are 22 farms in this area today.
Q: What is the size of your operation?
A: Every day we milk about 2,500 Holstein cows. They are the black and white ones. They typically produce 20,000 gallons a day. We produce raw milk. It goes to a processing plant. We are part of a cooperative. We also make butter under the Land O Lakes label.
Q: Have you had to dump any milk?
A: No, I have not. We are very fortunate for that. People dumping milk are the furthest from the market. We are close to the processors so we are not dumping milk. It’s not happening in Southern California — it has not occurred yet. The closest farm I’ve heard (dumping milk) was in Bakersfield and in the San Joaquin Valley there have been some limited instances of milk dumping. I’ve been told in Arizona they’ve been dumping a million pounds of milk a day.
Q: Why is the break in the demand chain more acute among Arizona farmers?
A: Because their processing plants are geared for milk, milk powder and cheese that gets exported to Mexico. They are unable to get that across the border because of quarantines, 15% of milk produced in the U.S. is exported.
Q: Milk sales have been up and down. Explain what’s been happening to the industry.
A: Initially stuff was flying off the shelves so the bottler had to make more milk jugs and cartons. Getting it to the stores was where the supply pinch was. But there was a huge fall off from food services like Starbucks, hotel chains and cruise lines, who are idled. Also, all the milk to schools is in individual packages and that’s funded by the USDA. With them not buying meals that was a huge hit to our business.
Q: So has demand dropped?
A: Milk has a limited shelf life. If they can’t sell it they have to dump that raw milk because that market (schools, businesses) is temporarily closed. Then people started to stock up (at the grocery stores). So, about two weeks ago the supply chain on milk has caught up and it has stabilized to a degree but it is not normal.
Q: How is this new normal affecting your business and other dairy farmers?
A: The biggest effect is economic. Milk prices have decreased 30%. They’ve gone from $18 (per 100 pounds of product) to $12 hundred weight. If this is long-lasting, we are concerned about that.
Q: Are you asking for economic relief?
A: We are still milking cows at the same rate but there is less demand. The elephant in the room if you are a dairy farmer is: How will you pay your bills. We (dairy farmers trade group) have submitted a proposal to Sonny Perdue (U.S. Secretary of Agriculture) for money through the CARES Act (Coronavirus Aid, Relief, and Economic Security Act). Cash reimbursements would be a big part. We are optimistic the USDA will help us out. We will get past this.
The Associated Press contributed to this story.