Back in the days when credit flowed too freely, milk farmers throughout the U.S. took advantage of the situation and bought more heifers. Global demand for milk was soaring, and the world’s appetite for dairy in the form of cheese, ice-cream and powdered-milk seemed insatiable. “The world seemed to take any amount of milk that we could produce,” says William Van Dam, CEO of the Alliance of Western Milk Producers. Shortly afterwards, the market crashed and global demand for dairy dried up. Today, farmers are burdened with too many cows and too much milk.
To make matters worse, tens of thousands of cows, bred with technology that ensures mostly female calves, are now entering the market. They will soon start producing milk of their own, exacerbating the milk glut. According to Ray Souza, the president of the Western United Dairymen, the future is bleak: “Just as the industry starts to recover form these difficult times, were going to see these heifers enter the marketplace. At the very worst, it could certainly stop the recovery altogether and send us into another price recession.”
While human actions were responsible for creating the milk glut, they are now being called on to try and solve it. In response to the excess supply of milk, the National Milk Producers Federation is culling dairy herds nationwide. These efforts, euphemistically referred to as reducing herd size, are carried out in a “controlled way,” so as not to drive down the price of beef. According to Agriculture Secretary Tom Vilsack, this is trend is playing out across other livestock sectors too. The USDA is responding to shrinking demand for pork by encouraging international pork trade and domestic sales to programs that feed people in need.