Walmart’s Milk Production Plant Is Tough News for Many Dairy Farmers

Dean Foods ended contracts with more than 100 dairy farmers

In 2016 Walmart announced that it would be opening its own milk-processing plant in Indiana, and according to Reuters stock prices at Texas-based Dean Foods, which is one of Walmart’s milk suppliers, dropped after the announcement. Now more than 100 farmers in eight states have received word that Dean Foods would be canceling their contracts, and they’ll have to find a new home for their milk by May 31.

According to the New York Post’s Ed Zwirn, farmers in Indiana, Ohio, Pennsylvania, New York, Kentucky, Tennessee, North Carolina, and South Carolina were notified last month that their Dean Foods contracts would be ending.

According to AgWeb, Dean Foods said in the letter that it was a “difficult decision” brought on by multiple factors. One was the new Walmart plant. Dean Foods reportedly did not specify by name, but it did say that new milk plants were a contributing factor.

“The introduction of new plants at a time when there is an industry-wide surplus of fluid milk processing capacity forced us into this position,” Dean Foods spokeswoman Reace Smith said to the NY Post.

The other major reason for ending the contracts with the farmers is that there is a significant milk surplus. According to The Johnson City Press, U.S. dairy production is up. The production of milk in the U.S. is increasing by about 350 gallons a year. At the same time, milk consumption has been dropping and many consumers are drinking nut- and soy-based milks. On average, people in the U.S. are drinking about three gallons less milk per year now than they did in 2010.

The falling milk prices are bad news for dairy farmers, and the producers whose contracts were terminated by Dean Foods now have about a month to find someone else to buy the milk the cows are producing. For more ways to use up a bit more milk, here are 24 recipes to help finish off a gallon.

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