The Upper Midwest region is grappling with a concerning issue of milk oversupply, as processing capacity struggles to keep up with production demands. Hastings Creamery, located in Hastings, Minnesota, recently ceased operations for at least 30 days, leaving 45 farms in search of alternative markets for their milk. This situation highlights the broader challenges faced by dairy farmers in the region.
Lucas Sjostrom, the executive director of Minnesota Milk, explains that efforts have been underway to find alternative markets for the affected farmers, while government officials work to find a solution to keep the plant open. However, the existing milk buyers in the Upper Midwest are already overwhelmed, with some plants resorting to voluntarily dumping milk on-farm on certain days. Despite available transportation, most plants cannot accommodate additional milk, even when offered for free.
Hastings Creamery, which processes 150,000 lbs. of raw milk daily, purchases milk from dairy farmers in Minnesota and Wisconsin. The creamery produces various dairy products under its own label, as well as private labels for other companies and grocery store chains.
Justin Malone, one of the creamery's owners, acknowledges the challenging times faced by the dairy industry, with farmers being forced to dump milk due to the lack of processing plant capacity. This problem is not unique to Hastings Creamery, as Mitch Thompson, owner of Thompson Family Dairy in Lewiston, Minnesota, also had to dispose of milk from his herd on June 2. He expressed concerns about the milk market's ability to absorb the surplus, raising questions about the impact on milk prices.
Sarah Schmidt, vice president of marketing at Associated Milk Producers Inc. (AMPI), attributes the need to dump milk to a flooded milk market. Declining fluid milk sales, particularly with the closure of schools for the summer, have exacerbated the situation. Additionally, milk from outside the Upper Midwest has entered the region, displacing the usual seasonal sales. All AMPI milk receiving plants are operating at full capacity, making it challenging to process the excess milk.
Despite the uncertainties surrounding the market, Schmidt remains optimistic about dairy farmers' ability to meet demand for cheese and butter. She hopes that the lower cheese market prices will result in increased sales, benefiting both farmers and consumers.