April 14, 2020

US dairy groups work to keep market moving

With the COVID-19 pandemic still bringing major dairy market disruptions, dairy checkoff leaders addressed the current market situation to free up obstructions and ensure dairy products are reaching consumers.

"The pandemic has been a gut punch to commodity prices across the board for American agriculture, but it has probably been most significant for the dairy industry and dairy farmers," says Tom Vilsack, President and CEO of the U.S. Dairy Export Council. "We've seen Class 3 milk prices decline by 26% and Class 4 milk prices by 36% in the recent days. A more significant drop than just about any other commodity has endured."

Tom Gallagher, CEO of Dairy Management Inc., says efforts have been immediately redirected "to do things to get products in the hands of people immediately."

DMI is also working with its food service partners to connect suppliers and end users. With 60% of butter and 40% to 50% of cheese used in the food service sector, markets took a tremendous blow. Added to the stress was the closing of schools across the country, which accounts for 7% of the fluid milk use.

"Our challenge is to find where we can connect those disconnected supply chains to new outlets," Gallagher says.

Barb O'Brien, president of DMI, says they have realigned their staff and created four emergency action teams that are working across traditional channels to address the challenges facing the market.

In addition to the news conference on Friday, April 10, O'Brien also outlined DMI's business plan shift in a letter to Agriculture Secretary Sonny Perdue. "We have prioritised our work to focus on three key areas: schools, hunger and food service and industry partnerships," she says.