Dean Foods Terminates More Than 100 Dairy Contracts as Milk Industry Continues to Decline
Leading U.S. milk processor Dean Foods has terminated 100 contracts with dairy farmers across eight states as American demands for dairy milk continue to fall.
Farmers in Indiana, Ohio, Kentucky, Pennsylvania, Tennessee, New York, North Carolina, and South Carolina received letters last week stating that the processor would no longer be buying their milk as of May 31.
“Basically, they just said we can’t take your milk,” Cathy Heim, a fifth-generation farmer from Stoneboro, Pennsylvania, told WFMJ. “If other dairies don’t watch, there will be more of the same thing and there will be more and more farmers that won’t have a place to ship milk to.”
Dean Foods says that the downsizing stems from a nationwide dairy milk surplus.
“A surplus of raw milk at a time when the public already is consuming less fluid milk and companies assertively entering or expanding their presence in the milk processing business, have exacerbated an already tenuous situation in a highly competitive market,” Reace Smith, director of corporate communications at Dean Foods, said in a statement.
Americans today drink about 42 percent less dairy milk than they did in 1970, according to the Pew Research Center. The nationwide milk surplus has led dairy farmers to purge millions of gallons of excess milk over the past few years, with an all-time high of 78 million gallons last year, according to Veg News.
WFMJ reports that Dean Foods recently lost its milk contract with a major retailer, rumored to be Walmart, which recently built its own processing center and bottling plant in Fort Wayne, Indiana. This center will supply Walmart and Sam’s Club stores in Illinois, Indiana, Ohio, Michigan, and Northern Kentucky.
The plant-based milk industry, meanwhile, continues to grow. Sales of plant-based milk have grown 61 percent since 2012, according to a report from research firm Mintel, and a November report notes that American plant-based milk sales are expected to reach $16.3 billion in 2018, up from $7.4 billion in 2010.
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