BOSTON — There’s so much milk flowing out of U.S. cows these days that some is being dumped because dairies can’t find buyers.
Domestic output is set to be the highest ever for a fifth straight year.
Farmers are still making money as prices tumble because of cheaper feed.
But supplies of raw milk are topping capacity at processing plants in parts of the United States and compounding a global surplus even with demand increasing.
Agri-Mark, a 1,200-dairy cooperative in New England that had $1.1 billion in sales last year, started dumping skim milk with manure.
While it isn’t unusual for small amounts of milk to spoil or go unsold, Northeast dairies dumped 31 percent more this year through May than the same period of 2014, government data show.
“Usually we’d find someone to buy it at a reduced price, or ship it to the Midwest,” said Bob Wellington, a senior vice president Agri-Mark of Andover, Mass. “But those plants are full. There’s no way to process it in the time needed for a perishable product.”
Domestic output in May reached 18.4 billion pounds, the most in any month, and is on pace to reach a record 208.7 billion pounds this year, according to the U.S. Department of Agriculture.
Globally, production will rise 2.1 percent to a record 582.52 million tons, according to the agriculture department.
“The world needs less milk,” said Eric Meyer, president of HighGround Dairy, a Chicago broker.
Global dairy prices have dropped 39 percent from an all-time high in February, 2014, and are the lowest in five years, United Nations data show.
In Chicago, benchmark Class III milk futures, used in cheese making, are down 36 percent to $16.23 per 100 pounds from a record $25.30 in September.
Prices may fall to $14.41 by the end of the year before recovering in 2016, predicted Tom Bailey, a New York analyst at Rabobank International.
The milk slump has been a boon to buyers, contributing to a slowdown food inflation.
Dairies in the Northeast dumped 31 million pounds of milk in the first five months of 2015, including 7.9 million in May, which was 67 percent more than the same month last year, USDA data show.
Farmers are saying it is the most ever and preparing for lower prices, even though many are still making money now.
First Published July 3, 2015, 4:00 a.m.
