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Plant Closures: Not One Person or Group is to Blame

May 29, 2018

 

This month, Dean Foods employees in Braselton received notice informing them of the plant’s closure this fall.  Word quickly spread across the Southeast dairy community of the closure; as well as the news that 6 to 7 Dean Foods plants will likely close also.

 

Social media posts rapidly shared the news online, with most people blaming the large processor as the culprit by monopolizing the industry.  Dean Foods has yet to officially announce the closures, but news outlets are stating that company executives are telling staffers that they were “losing customers and the volume of sales was going down” and must close down plants.

 

the U.S. and an easy target in this complicated world of milk marketing. But let’s face it; Americans are turning away from milk amongst a multitude of other beverage options, including dairy substitutes like almond and soy “milk”. Dean Foods is a business and like any business with poor sales, they must cut costs to minimize losses.

 

The dairy industry’s problem started around 40 years ago when milk consumption rates began to decline. According to the U. S. Department of Agriculture, the average person consumed around 18 gallons of milk last year. Back in the 1970s it was more like 30 gallons a year. What led to the decline, especially when the average gallon of milk costs less than a 12 pack of canned soda? If consumers are willing to pay more for their beverage, then our industry has lost value in milk as a marketed beverage.  Therefore it’s not a price issue, but a marketing issue. Here’s why I think so:

 

First, our industry is facing a generational problem. Baby Boomers and their children see milk as a healthy option to beverages like soda and juice. However Millennials and Generation Z have been over exposed to bogus and damaging health warnings about drinking milk; causing them to avoid it (the same is happening to the soda industry).   If milk is seen as being harmful to our health, then people aren’t going to drink it. New research shows that full fat dairy products are beneficial to our health, but unfortunately the damage of bad press and bad doctor advice for many years has taken a toll on our industry.

 

Second, the lack of product innovation has consumers picking fluid milk less at the grocery store.  There are many options in the marketplace for consumers to try from energy drinks to sports recovery drinks to alternative milk products.  Milk processors failed to proactively change with consumer preferences over the last several decades, leading to an industry with very old product lines, little innovation and outdated facilities.

 

Third, over the last 15 years the animal rights movement has viciously attacked our industry, leading to an increase in meatless and/or dairy-free diet trends. Animal activist groups are flooding the internet with negative YouTube videos, social media posts and internet trolls, which tremendously outnumber the positive online dairy message posted by dairy producer groups. I realize that our industry does have has an online presence that is easily accessed, but it is not effective.  

In an NPR article printed last year titled Why Are Americans Drinking Less Cow's Milk? Its Appeal Has Curdled, Marion Nestle, a professor of nutrition, food studies and public health at New York University says that the decline in milk consumption is due to more beverage choices and animal welfare.  Dr. Nestle states that  “the political debate over how dairy cows were raised also became a factor…The dairy industry has a lot of public relations [work] that it is going to need to do to convince the public that it is producing a product that is healthy, good for animals, good for people and good for the planet." 

 

Ouch! Unfortunately I think that Dr. Nestle may be right! Our decline in consumption and sales data are proof!

 

As dairy farmers continue to face another year of record low prices and plant closures, all dairy groups must explore how our industry can move from a reactive to a proactive marketing strategy. I believe a good start for moving forward must be at the local level. Farmers must do more than just “tell their story” as they are often told by checkoff groups to do. They must become involved in their communities, serve on local boards and interact with their neighbors.

 

I recently heard someone say on an industry conference call that “the public trusts farmers but not the way they farm”. I agree. Dairy farmers and those that represent them, must be more specific about farming practices, for example, they must tell neighbors why they recycle manure through irrigation pivots, dehorn heifers, flame udders or treat sick animals with antibiotics.

 

Promotion of milk and dairy must also return to the basics, highlighting milk as a natural, inexpensive and minimally processed product. Dairy promotion groups may need to look at the success of other companies that are not directly tied to Agriculture for new ideas, innovation and promotion.

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