Imagine walking to the mailbox on a Monday only to find a note from your processor that in one month they will no longer be picking up your milk. That’s what happened to several Grasslands producers in Southern Wisconsin this week.
Grasslands handles the majority of cream sold in Wisconsin. The generic, unsigned letter producers received cited issues selling product to Canada as the reason for their decision to cut ties with some of their producer suppliers, but some producers aren’t buying it. For the approximately 75 producers reportedly being dropped, distance from the milk plant appears to be a factor in determining to kill their contracts.
At press time, Grasslands had not responded to a request for comments.
With only 30 days to find a new home for their milk, those who lost their contracts are looking to strike deals with other processors in the area which Mike North, of Commodity Risk Management, says could be a challenge.
“In a normal market where milk is not coming out of our ears, the search [for a new processor] includes many factors including distance from the plant, how milk is paid for and recent history of patronage dividends if you’re looking at a coop,” he says. Unfortunately we are not in a normal market.
Oversupply has plagued much of the Upper Midwest and spring flush isn’t here yet.
“It will be very difficult to find anyone in the market to buy milk,” he says.
By: Anna-Lisa Laca
Source: Farm Journal’s MILK