Less doesn’t mean more in this case.
Sixteen western Pennsylvania milk producers are left with no one to process their raw milk beginning on June 1. Deans Foods notified dairy farmers across the state the company is not renewing 24 contracts due to cost-cutting measures as people are consuming less fluid milk.
The three factors, according to the Center for Dairy Excellence, going into the decision include Wal-Mart constructing a new Class I fluid milk processing center, a decline in the consumption of fluid milk, and a rising surplus.
Deans Foods has told dairy farmers in Pennsylvania, Kentucky, Indiana, North Carolina, South Carolina, and Tennessee of its plans to scale back the amount of milk the company intakes due to cost-cutting measures.
Wal-Mart’s new 25,000-square foot fluid milk processing plant will be using dairy farms located with 200 miles of the Fort Wayne, Indiana, plant, that will supply the retail giant’s stores and Sam’s Club locations in Illinois, Indiana, Ohio, Michigan and Northern Kentucky.
Ginger Fenton, who works with Lawrence County dairy farmers through Penn State Extension in Mercer County, said some farms in the area were affected by Deans Foods’ decision.
“I know that I can tell you fluid milk consumption is down,” Fenton said. “There are many factors that are involved. It is a global issue, I think, with diary consumption, and exports.
“There is not a quick fix that I know of.”
However, one local dairy producer says the lack of dairy contracts and Walmart’s entry into the fluid milk production industry is “gonna hurt.”
Joe Gorgacz, who runs Valentino Cheese and Dairy Company with his wife, said “It is going to hurt the farmers, and it is a trickle-down thing. They don’t have to buy feed, hay, fuel.”
Gorgacz said he spoke to a milk hauler on Thursday who said he “didn’t know what the dairy farmers were going to do with all the excess milk.”
“I don’t know what they are doing,” Gorgacz said. “This industry is getting goofy.”
While the state sets the price of milk, Gorgacz said, the decline of fluid milk consumption and the lack of milk-producing contracts are two aspects that are going to have a big effect on the industry.
“I’m not against big business,” Gorgacz said. “You get Wal-Mart and Amazon involved and us little guys don’t have a chance.”
Valentino’s Cheese and Dairy Company, based in New Castle, produces Italian basket cheese, which is popular at Easter, but may have trouble making cheese with a lack of bulk milk.
“I am ready to retire,” Gorgacz said. “I don’t see myself doing this in 10 years. I won’t be able to get the milk to get the cheese made.
“This is what is happening to us small guys. We are getting pushed out.”
The Pennsylvania Department of Agriculture and Center For Dairy Excellence are working to find alternative milk markets for the farmers.
Dairy Farmers of America said in a press release the organization is “sympathetic to the farmers who have been impacted by this decision and realize it has created a tough situation for them.”