Dairy farms experience challenges over decrease in milk sales

Americans might be choosing something other than milk products to stock their fridges as the dairy industry has been experiencing a decline in overall consumer sales.

Early last week, Borden Dairy Co. filed for bankruptcy protection, as reported by The Associated Press, following similar action from competitor Dean Foods in November.

A Jan. 5 news release on Borden Dairy Co.’s website cites the rising cost of milk and market changes for the company’s voluntary reorganization. Both Borden Dairy Co. and Dean Foods plan to continue operating as normal during the restructuring.

John Phillips Dunn of the Missouri Dairy Association said the difference in sales is often in fluid milk versus other milk products, such as cheese and yogurt. With a variety of beverage options available, Dunn said, many are reaching for something other than the milk they might have consumed in the past. He attributes the decrease in milk sales to a loss of consumer interest, something he said could be alleviated if consumers would rediscover the drink.

While he said the decline in sales may have less of an impact on Missouri farmers who sell to cooperatives such as Dairy Farms of American (DFA) or Prairie Farms, the change in consumer behavior is still difficult. The decrease in sales of milk products can be tough on processors, Dunn said, but he said DFA and Prairie Farms still seem to be doing well. Dunn said Borden Dairy Co. does not buy from dairy farmers in Missouri, and to his knowledge, none of the less than 700 family-owned dairy farms in Missouri sell to the dairy processor.

Corvin Schoen, left, walks to help his 8-year-old nephew Kelby fasten a gate after leading a group of dairy cows to the farm's milking facility Sunday at Schoen Farms Inc. near Oak Ridge. Kelby is a member of the eighth-generation of Schoen farmers to work at the family dairy farm.BEN MATTHEWS

John Schoen owns an eighth-generation dairy farm in northern Cape Girardeau County and is a board member at Prairie Farms. He said the drop in fluid milk prices may be attributed to a changing culture around mealtimes.

“It is the culture of our family organization now, they’re not taking much time for breakfast. They’re grabbing a to-go bar and putting the kids on the bus. Probably the first milk they get is at school for breakfast,” Schoen said. “Families are not sitting down to eat together like they used to.”

He added that milk is often not offered as a beverage option as restaurants, decreasing milk consumption by families.

As sales of fluid milk decreases, Schoen said he has seen a rise in popularity of cultured milk products such as cheese and yogurt. In addition, he said whole milk seems to be on the rise, as it may be more satisfying to customers than skim or 2% fluid milk.

Operational and real estate costs might also be affecting small dairy farmers, Schoen said. Of the fewer than 20 dairies in Southeast Missouri, he said he sees the loss of one or two farms each year. While small dairy farms — those with 25 to 50 cows — exist, they may often be economically difficult to operate, Schoen said. He said the recent Borden Dairy Co. and Dean Foods actions, however, should not affect Southeast Missouri farmers who sell to cooperatives such as DFA or Prairie Farms.

In June 2018, a nearby Prairie Farms processing location in Fulton, Kentucky, closed, according to previous reporting by the Southeast Missourian.

Fluid milk sales have been declining since 2010, according to 2019 data from the U.S. Department of Agriculture. In 2010, sales of fluid milk were at 55,003 millions of pounds, compared to 47,672 millions of pounds in 2018, a decrease of more than 7 millions of pounds.