Prognosis: negative

On the express train to the hurt locker.

Are we dumping milk because of greed or low demand, no. It’s the supply chain, there are only so many jug fillers, all were running 24/7 before this cluster you-know-what.

Now demand for jug milk has almost doubled. However, restaurant demand is almost gone; NO ONE is eating out. 

Restaurant milk is distributed in 2.5 gal bags or pint chugs; further, almost 75 percent of milk is processed into hard products in this country, cheese and butter. Mozzarella is almost a third of total cheese production; how’s pizza sales going right now??

A bit of history – Years ago (40+) every town had a bottler, they ran one shift a day, could ramp up production easily. Now with all the corporate takeovers (wall street over main street) we are left with regional “high efficiency” milk plants that ran jug lines 24/7 before this mess, no excess capacity.

Jug machines cost millions and are MADE IN CHINA. Only so many jugs can be blown at a jug plant. We farmers don’t make the jugs, damn hard to ramp up production.

I’m a dairy farmer, believe me NO dairyman likes dumping milk; and so far there is NO guarantee they will get paid. Milk must be processed within 48 hours of production and 24 hours of receipt in the plant or it goes bad. Same with making it into cheese and butter, and neither stores well for long.

The same supply line problems exists where restaurants are supplied with bulk 1 pound blocks of butter or single serv packs or pats; and cheese is sold in 10 to 20 pound bags (think shredded Mozzarella for pizza). Furthermore, it is not legal for this end of the supply chain to sell direct to consumers in most states.

We are headed for the same problem with canned veggies. The vast majority of produce comes off and is processed in season; canned or frozen. The supply is already in cans for the season; restaurants use gallon cans or bulk bags of frozen produce.

At some point we will run out of consumer sized cans in stock because home size sales are up (40%+) and restaurant sales are almost nonexistent. Fresh produce out of U.S. season comes from Mexico (different climate). I’m talking sweet corn, green beans, peas, tomatoes, all veggies are seasonal in the USA. Fresh, out-of-season, row crops are  imported. (There are exceptions, like hydroponic grown, but small amount of total).

Eggs? Same problem. Bakeries and restaurants of any size use Pullman egg cases, 30 dozen at a pop, 30 eggs to a flat, 12 flats to a case. There are only so many 1 dozen egg cartons available and only so many packing machines.

Industrial bakeries and processors of packaged food buy bulk liquid eggs, no carton at all. Also in many states it is illegal to sell this supply-chain directly to consumers.

On your standard buffet of any size, do you really think they boil eggs and peel them? They come in a bag, boiled and diced; those nice uniform slices of boiled egg you see on your salad, a lot of them come in tubes boiled and extruded at the same time, just unwrap and slice. Your scrambled eggs come in a homogenized bag on most buffets.

Another example of Main Street being gutted and “improved by wall street” NO local egg processors available or many small egg producers either, all corporate and huge, contracted to sell to the corporate masters.

This is a warning the same problems exist in all supply chains.

The supply chain is farked.

David Osterloh,
61-year-old dairy farmer

Scary stuff.

5 thoughts on “Prognosis: negative

  1. The tribe is fine with that as they yearn for the “good old days” of their Messiahs – Lenin and Stalin.  And now with the Kung Flu, they have added Mousey Tongue to make a troika.  Or their very own Holy Trinity!  Not only was Bernie’s campaign claiming the gulags “paid a living wage,” there was Bloomberg commenting on farmers!!!

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  2. “…how’s pizza sales going right now??”

    Well, judging from the frozen pizza counter at the grocery store, pretty damn good.

    Our supply chain has become a super efficient method of moving goods from the producer to the consumer. It’s adaptable, but only if this thing becomes more permanent. Take milk – no reason a grocer cannot take delivery of the restaurant bags and the consumer can fill his own container.

    The problem we really have is the short term (hopefully) nature of the disruption. It’s not worth making the changes required.

    But no matter. No one will be able to afford milk pretty soon.

    1. Yes I got sticker shock this morning with milk.

      Up from 2.19 it had gone to 2.69. Today it was in the 3.50 range.
      I was thinking that. Take the used milk jugs, wash them and bring them to the store to be refilled from the larger restaurant distribution supply chain.

      They’re dumping milk they can’t sell and can’t hold for long and they’re doing it for lack of retail containers. Less supply, same demand and price goes up.

      Whether the milk people get compensated or not, SOMEONE takes the loss. Much of this Fed Funny Money Bailout is just Loss Shifting.

      1. Hey Kenny, I bought food lion whole milk yesterday for $2.24 a gallon.
        They had some “name branded” milk that was above $3.

        1. OK That’s weird. I didn’t check Food Lion and just bought one so I’m out $1.25 potentially. I bought the off brand too no less.
          Food Lion’s suppliers must be more retail and less commercial supply chain oriented. So they haven’t had to dump as much.

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