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U.S. Capitalists Are Dumping Rivers of Milk

Millions of gallons of milk are being thrown away. One CEO says: “I might as well dump it in a manure pit.” The problem is not that people don’t need milk. The problem for capitalists is that milk isn’t profitable.

Daniel Nath

April 19, 2020
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Golden E Dairy Farm

Since the beginning of April, farms across the United States have dumped tens of millions of gallons of milk. Videos show tanker trucks pouring loads of milk into manure pits and onto fields. Fresh milk is being dumped in Vermont, New York, Pennsylvania, Georgia, Florida, Wisconsin, Texas, Idaho, Utah, Arizona, and California, as well as in Canada and Britain. 

One Wisconsin farmer told a local TV station he is pouring up to 30,000 gallons of milk onto the ground daily. 70 farms in Florida dumped 810,000 gallons in the first week of April. In the same period, the New York state dairy industry destroyed around 3.5 million gallons.

By closing schools, restaurants, hotels, and other big milk purchasers, the Covid-19 pandemic has thrown the production chain into chaos. Many scientists had warned over the past two decades of the dangers of an easily transmitted respiratory virus. But for agribusiness, the disease has been a shock.

Dairy is not being dumped because there is a lack of people who need food. The economic crisis catalyzed by the pandemic is pushing people into poverty in the United States and around the world. On April 4, three thousand people in Austin, Texas turned up to accept grocery boxes from a food bank. This is the norm, not the exception. In a recent Siena College poll in New York City, 49 percent of respondents said they were concerned about whether they could afford to buy food. Meanwhile, in countries such as India and Saudi Arabia, migrant workers whose jobs have been cut are threatened with starvation.

The industry cannot function properly if there are substantial shifts in overall demand. 

Price Dropped by a Third

Many companies that buy part of the milk supply make food products specifically for commercial buyers. The closure of schools, restaurants, hotels, and workplaces has halted demand for many types of dairy goods. 42 percent of U.S. dairy and more than half of U.S. cheese and butter is normally consumed in service industries.

There is a crunch as major sections of the supply chain stop production and don’t call for their normal stream of milk as an input. A Cornell University agricultural economist has said, “We’re talking about a 10 to 15 percent destruction of demand for milk products. It’s no wonder prices have tumbled and we’re dumping milk.” 

The chairman of the Arizona Milk Producers association gave an interview saying that every day in that state alone, “A million pounds of milk right now is being dumped because we don’t have a home for it.” In addition to school closures, he blamed the collapse of exports.  

As halted food factories stop ordering milk, they send economic signals to farmers that lead to dumping. The CEO of the Ellsworth cooperative in Wisconsin said, “We had one company break their written contract to take eight loads of milk per day, causing a backlog at [our] plants. We may need to dump milk if our supply is not reduced.” The CEO of Cayuga Milk Ingredients, a New York factory with 76 workers who process nearly one billion pounds of milk per year, said “Nobody wants [cream to make butter]. If you have extra cream, I might as well dump it in a manure pit.” 

The price of raw milk has fallen suddenly, in some cases from $18 to $13 per hundred pounds. Cooperatives have responded by ordering their members to dump. Southeast Milk, a large Florida cooperative, has called for its members to change production and slaughter cows until they can lower milk output 18 percent.

Individual farmers are upset by dumping. One small farmer commented, “The milk truck driver couldn’t look me in the eye because he told me it’s going in a manure pit today.” Another farmer in Canada said, “It’s a lot of work producing milk. I’m sure there’s people that can use it… I hate seeing food wasted… A few weeks from now, they could be crying for it.”

 Some industry representatives have called for the federal government to fix a much higher minimum price for milk. Some have also called for direct rescue payments to farmers to compensate them for their losses and for the USDA (Department of Agriculture) to buy large amounts of dairy products and distribute them either via food banks or in stores with vouchers. 

On April 17, Donald Trump’s USDA head announced that the agency will make $16 billion in direct payments to farm owners hit by lost demand and spend $3 billion buying food that would be given to food banks for distribution. $100 million per month is intended to buy dairy goods. Let us be clear: we can expect that most of that aid will be tax money going to large farm owners. And this amount of money to aid hungry people or make use of surplus dairy is severely inadequate.

The Just-In-Time Supply Chain and the Dairy Crunch 

The dairy industry is an extreme example of the just-in-time supply chain promoted by modern capital. In that system, commodities that form the raw material of a process should be sent through from where they are produced to where they are used at smooth rates matching predictable levels of demand. Holding inventories of goods should be avoided, and production should be made as inexpensive, productive, and profitable as possible. Raw milk and milk that has been bottled or turned into solid products need to move through the system at coordinated rates. If one part of the flow changes, the system is very resistant to making necessary adjustments to the movement of other parts.

Coordinated and rapid production are admirable goals. However, capitalism is indifferent to actual human needs. Just-in-time production often involves forcing auto and logistics workers to work faster until their joints wear out and nurses to work with unsafe staff-to-patient ratios. On the one hand, market pressure can promote investment that delivers amazing things like the Amazon fulfillment network for instance. On the other hand, capitalist decision-making about what to produce turns out to be totally irrational and callous to human beings. Both Boeing and Airbus have resisted shutting down their airplane production during the Covid-19 epidemic, while air travel is shut down around the world. But U.S. industry has refused to retool mass numbers of plants to produce N95 masks, medical gowns, and ventilators.

 Capital views having “extra” supplies or extra productive capacity as wasteful if it is not expected to generate profit — even if it is necessary from the point of view of proactively ensuring safety. The New York Times recently acknowledged this in an article that quotes the president of a hospital supply company saying about masks, “You’re talking about a commodity item. By definition, there’s not going to be a lot of redundancy, because everyone wants the low cost.” 

The same economic drives that are preventing the manufacturing of adequate personal protective equipment (PPE) and ventilators are destroying “extra” dairy. Capital does not want to pay to operate enough food production plants under these conditions to use all the milk that exists. Production capacity is sitting motionless while factories are full of unsold food. Many factories are equipped with machinery to make products for food service companies in bulk packaging or single-serving milk cartons for schools. 

Mainstream media coverage urges individual consumers to help by buying an extra jug of milk or block of cheese. This is disconnected from the actual scale and causes of the problem. A response from University of Missouri economist Scott Brown shows how integral this destruction is to capitalism: “Even if we have plants able to try to process that milk, there’s little reason to do it at this point due to lack of demand.”

 “Surplus” Food and Workers’ Control

Irrationality in the dairy industry existed before the pandemic. And other sectors of food production are in trouble too. Over the last decade, the U.S. dairy industry increased milk output by 13%. But 43 million gallons of unsold milk was dumped in 2016. 1.4 billion pounds of unsold cheese built up by 2018. 

The Wall Street Journal wrote in 2016 that the “glut” of cheese was “just the tip of a surplus of U.S. agricultural products … swamping markets for grain, meat, and milk.” Indeed, in 2018, corporations had 2.5 billion pounds of unsold meat stockpiled. Today farmers are dumping vegetables, and the pork industry may have unsellable pigs.

Destroying food when over 22 million people in the United States have lost their jobs is obscene. The structural forces that cause the dumping have to be challenged. Real guaranteed access to groceries would be an excellent component of a “pandemic wage.” 

The recession in motion will inevitably cause murderous hunger all over the Global South. International solidarity demands that we call for massive aid to people in the semi-colonial world. Powdered milk, frozen butter, and cheese could be produced and sent to poor countries in crisis.

The Covid-19 crisis is revealing just how much major industries and institutions are not managed to work for working and oppressed people. In New York City, running the transit system with no physical distancing is killing disproportionately Black and Brown people on their way to work; in small towns, the same thing is being done in meatpacking factories. In both these cases, this system “saves” money by abusing people. 

This fact is normally papered over, but the Covid-19 crisis is beginning to affect the consciousness of workers around the world. When one of the editors of Bloomberg News writes, “one consequence will be social unrest, even revolutions,” and a Macronist member of parliament in France predicts, “the current ordeal could resurrect the class struggle,” these capitalist strategists are revealing that they know their system is pushing all of the costs of the pandemic onto the oppressed and exploited.

To deal with both food waste and hunger, we should demand that all foodstuffs be put to use. This means guaranteeing food for all regardless of ability to pay and forcing the full capacity operation of food industries. The question is: who will pay? Right now supposedly many milk, cheese, and butter plants cannot run. They should be mobilized by the government, just like the medical supply industry should have been mobilized by the government in January and February.

No dairy factory should be permitted to sit idle while there is unused milk. Factories should be required to implement rigorous social distancing and essential workers should receive double normal wages as hazard pay. Currently, the existing food banks are totally inadequate with sometimes nine times as many people as usual relying on them. Everyone who cannot afford food should have public assistance to get it. There should be emergency planning of grocery store and warehouse space. There are tens of thousands of closed restaurants that could be put to use to distribute food, as workers in one McDonald’s in France took over their workplace kitchen and supply room to aid their community. Unemployed people could be put to work.

But again: who will pay? Big food companies like Kraft that process dairy should not be allowed to maintain their profits. If it supposedly costs too much to run food processing industries, it should be done at the expense of cutting into corporate profits. Order Kraft or Nabisco to make use of their capital and equipment to produce and set a price for output based on the cost of production. Where else will the money come from? Take it from the rich. The coronavirus has been terribly handled and is imposing terrible costs. Yet the $2 trillion CARES rescue act includes a provision giving $70 billion to 43,000 business owners with annual incomes of over one million dollars. State policy is about hoarding money for the very rich while resources for necessities and safety for the majority are restricted. Money can also come from slashing the military budget.

Who Will Pay?

What about farmers? Farms are businesses but their class position varies. A small farm may milk 80 cows or less. Its owner may work longer hours in a year than the average wage worker. On the other hand, the very large U.S. dairy farms are powerful businesses milking ten to thirty thousand cows. They employ large work forces and invest in businesses processing and selling their milk. Their owners are businessmen. 

Emergency state purchase of “surplus food” should help small farmers to make a living and avoid bankruptcy. (About half of the total number of U.S. dairy farms have “gone under” in the past 15 years, concentrating the industry.) The government should ensure that their price reflects the cost of production. Big farmers can pay by being forced to take a financial haircut.

Heavy demands should be placed on corporations and large farmers to deliver beneficial production at reasonable prices, and if they refuse, their businesses should be nationalized. This can only be effective with widespread rebellion from within the workforces, fighting for themselves and the broader working class.

Health care workers have begun to seriously question the people who run their industry. Amazon employees and meatpacking workers have become more conscious of the fact that they are being asked to risk their lives and work overtime for the benefit of super rich stockholders.

The 150,000 largely immigrant dairy farm workers, the people who work in dairy processing plants, the truck drivers, retail workers, and the working class in general — all of us have  an interest in running dairy and the whole food industry efficiently for our human needs. Divided from each other we can’t do anything to control how food is used. We have to fight for workers’ control. We need to change where the money flows, how it is used, and whether production is planned to ensure the majority have what we need to live and thrive, without being forced to rely on charity or political promises from the ruling class who put us in this crisis.

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Daniel Nath

Daniel is a political writer, lives in the Midwest, and is forklift certified. He has covered topics including police crimes, borders, and why unions can't be apolitical

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