MADISON, WI (SPECTRUM NEWS) — Economic fallout from the Coronavirus Pandemic is now starting to force some Wisconsin dairy farmers to dump milk.

Mark Stephenson, director of dairy policy analysis at the University of Wisconsin – Madison said a few farms had to start dumping milk starting Tuesday.

“Some farmers have gotten notice to pull the plug on the bulk tank and to dump their milk rather than have it shipped,” Stephenson said.

It's a drastic, but coordinated step. Stephenson said larger farms that have space to dump milk in manure lagoons would likely be asked first. However, the financial hit would be spread out across a co-op, meaning every farmer would take less money.

Stephenson said the need to dump milk comes first from processors who don't have enough product orders for the milk they would usually buy, then a co-op would coordinate how to proceed with the dumping.

Stephenson said you would have to go back a long way to find another situation like this in Wisconsin. He said a few years for a brief time period some farms had to dump milk when a processor suddenly stopped buying milk from them, but this is bigger than that.

“This isn't typical or normal, usually it's a big enough system that you can handle a little bit of this surge, but this is not a little bit of surge, this is bigger and more difficult,” Stephenson said.

Stephenson said the largest contributor has been abrupt change in consumer habits under social distancing regulations. Restaurants and schools that would normally buy things like nacho cheese or single slices for burgers now have significantly smaller orders.

“Probably means total less dairy sales, and our dairy plants are responding to just a lack of orders by indicating we don't need milk if we can't sell cheese,” Stephenson said.

Milk prices started dropping in January when the Coronavirus shook international trade hopes with china. Prices have been falling ever since. Stephenson said futures markets for milk this summer show prices at their lowest since 2009 and the financial crisis.

“So coming up pretty quickly, and they're dropping like a brick right now,” Stephenson said.

Stephenson said prices could get lower than at any point over the last five years — a time span of depressed prices that forced dairies in Wisconsin to close at a very high rate.

The rate of farm closures had started to slow in the first couple of months of 2020, now Stephenson expects them to pick back up.

“There are farms that are stretched to the end, of their credit, their borrowing capacity, we've gotten more farms that are just going to have to look at this and say it's time for me to go, I can't make it through this,” Stephenson said.

The situation sparked several responses from dairy groups and government agencies on Wednesday.

Governor Tony Evers directed the Wisconsin Department of Agriculture, Trade and Consumer Protection to send a letter to the United States Department of Agriculture asking the agency to buy unused commodities and re-direct it to food banks, nutrition assistance programs and other sources.

“In a time when many people are already food-insecure, it’s more important than ever that we get Wisconsin’s nutritious commodities in the hands of consumers who need them the most,” Evers said in a press release. “I’m hopeful that our federal partners understand the urgency of the need here, and will take action accordingly.”

DATCP also asked the USDA to re-open enrollment for the Dairy Margin Program.

Seven groups representing dairy cooperatives and farmers in Wisconsin sent a similar letter to the USDA on Wednesday. Those groups are The Cooperative Network, Dairy Business Association, Edge Dairy Farmer Cooperative, Professional Dairy Producers of Wisconsin, Wisconsin Cheese Makers Association, Wisconsin Farm Bureau and Wisconsin Farmers Union.

They urged the federal government to provide direct aid to farmers as well as expedite the process of buying and re-directing commodities that would otherwise go to waste.

“Direct relief to dairy farmers and a substantial purchase of dairy commodities by USDA can ensure our industry will remain fiscally able to function in its primary role of feeding the nation and the world,” the groups wrote.

The groups specifically asked for the USDA to focus on product purchase of non-fat dry milk, butter, cheddar, mozzarella, other Italian styles of cheese, and dairy products purposed for use by restaurants and food service vendors.

Farms were included in the recent coronavirus economic relief package congress passed. The bills included about $9.5 billion for livestock producers including dairies.

Senate Majority Leader Scott Fitzgerald (R-Juneau) talked about the incoming federal relief in a media availability on Wednesday.

“I'm just very very hopeful that the federal dollars will help on that front and that we don't shed a ton of diary farms as a result of the downturn,” Fitzgerald said.

However, it's still unclear how that money will be distributed and rolled out. Stephenson said he suspects there will be direct checks, but he doesn't think it will cover losses.

Stephenson said the market could balance out as consumer spending figures out how to operate within Coronavirus restrictions. However, the gap left from drastically decreased restaurant business among other drops in non-grocery spending is large.

“Right now we're just in this hiccup, this time period when that big surge of buying at retail has slowed down and now we've got plants that are looking at no orders,” Stephenson said.

DATCP is asking anybody dumping milk or knows someone who is dumping milk to record the losses and send the information to its Farm Center at 1-800-942-2474 or FarmCenter@wisconsin.gov.

The Farm Center staff are also available to assist farmers with the emotional stress that comes with emergency milk disposal.