April 11, 2020
US dairy industry sounds alarm as supply exceeds demand; urges swift action
The International Dairy Foods Association (IDFA) and the US' National Milk Producers Federation (NMPF) have urged concerned authorities to take swift, comprehensive action to support the US dairy industry through the COVID-19 crisis.
The milk and dairy-product producers, in a recent letter to the US Department of Agriculture, underscored the main challenge facing US dairy today, which is that supply has exceeded demand by at least 10%. This gap, they said, could widen as supply increases to its seasonal peak and as "shelter in place" conditions last.
The NMPF and IDFA urged USDA to use as many tools as possible—and as quickly as possible—to bridge the supply and demand gap without creating any long-term market repercussions.
They lamented that the COVID-19 pandemic has lowered milk prices, sapped demand by shutting down most restaurants and other foodservice businesses, and brought unprecedented challenges to dairy farms and processors.
"As most of the country shelters in place and large swaths of the foodservice sector come to a standstill, dairy sales outside retail channels have plummeted. Market prices have fallen rapidly, creating a crushing economic outlook for producers of nutritious, and necessary, milk and dairy products", said NMPF President and CEO Jim Mulhern.
At the same time, NMPF and IDFA thanked Congress and the administration for passing and signing into law the CARES Act, a substantial relief package to bolster the programmes and support mechanisms needed to weather the COVID-19 crisis. Through the CARES Act, Congress has deployed substantial financial resources to the USDA which, the milk producers said, should address dairy's unique challenges.
They urged the federal government to use every financial tool in its arsenal to bring balance to the dairy industry as quickly as possible to ensure that it is intact after the COVID-19 disaster.
The organisations are also asking the USDA to address the growing and widening food insecurity facing many Americans by redirecting wholesome, nutritious dairy foods to food banks and national nutrition programmes.
