CLARION CO., Pa. (EYT) — Several Clarion County dairy farmers are in a tough spot after they were recently informed by a Texas company that their milk contracts will expire in a few months.
Nearly 100 dairy farms in six states, including Pennsylvania and New York, were informed by Dallas-based Dean Foods that their milk contracts will end on May 31.
Reace Smith, director of corporate communications for Dean Foods, issued the following statement:
“Unfortunately, Dean Foods has made the difficult decision to end milk procurement contracts with a number of farmers in about 90 days. We regret this decision had to be made.”
Strattanville area dairy farmer, Bobby Smith, is one of the local farmers that will be affected. His family’s farm was recognized by the state just a few years ago for becoming a Century Farm.
“It’s not good at all,” Smith said. “I’ve been trying to find another distributor, but I’ve not made any deals yet.”
Smith has contacted several companies but only spoke to a few.
“Right now, I’d say there’s a 50-50 chance of catching on with DFA (Dairy Farmers of America), but if not, I’ll probably have to sell my milk cows and then my heifers. We do a little bit of grain farming, but I might have to go out and find a job.”
DFA is a dairy marketing cooperative owned by nearly 14,000 dairy farmers and is one of the most diversified manufacturers of dairy products.
However, in a March 6 story on milkbusiness.com, DFA said it wouldn’t be able to rescue those milk producers.
“We are sympathetic to the farmers who have been impacted by this decision and realize it has created a tough situation for them,” says Monica Massey, senior vice president and chief of staff at DFA. “We currently face difficult marketing environments, particularly in areas of the Northeast and Mideast, and unfortunately, don’t have a market for their milk at this time.”
Currently, Smith is milking 55 cows at his farm. They produce 2,000 pounds of milk every day and a total of nearly 85,000 gallons a year.
Smith cites the new Walmart milk plant in Indiana as a big part of the problem for the smaller dairy farms in the area.
Dean Foods has had a private label contract (Great Value) with Walmart for several decades, but the new Walmart plant in the region is where many local farms sell their milk.
According to a statement from Dean Foods, the reasons for terminating producer contracts include, “The introduction of new plants at a time when there is an industry-wide surplus of fluid milk processing capacity” and losing milk volume at “higher levels than anticipated” during this time of increased volume competition.
Another ripple effect could be coming from McDonald’s, which announced in February that it will no longer offer cheeseburgers and chocolate milk with its Happy Meals.
The hamburger chain said it wants its Happy Meal options to have 600 calories or fewer and have less than 650 milligrams of sodium. It also wants less than 10 percent of the meal’s calories to come from saturated fat and added sugar.
The cheeseburger and chocolate milk didn’t meet those new standards, the company said. It is, however, working to cut sugar from the chocolate milk and believes it will be back on the Happy Meal menu eventually, but did not estimate when this would happen.
