During the COVID-19 pandemic, innovative farmers in the Garden State created a solution to the milk distribution crisis by working in cooperatives and selling directly to customers
Cow’s milk is a major part of many Americans’ diets because it contains key vitamins and calcium. But milk consumption suffered during the COVID-19 pandemic, along with other foods, including beef, eggs, fruit and vegetables. Economic shutdowns severely disrupted supply chains that move food from farm to fork.
Milk provided a compelling case study. Before the pandemic, the U.S. dairy industry was already struggling with low milk prices, rising debt, the U.S.-China trade war, widespread depression and stress among farmers, and limited rural access to mental health services. More farmers began calling it quits and, in uncommon but growing cases, committing suicide.
Dealing with Changes in Milk Demand
Changes in the milk distribution networks that connect farmers, processors, retailers and consumers became hard to see during a socially distanced trip to the grocery store. But they existed and were getting worse.
Dairy producers were dumping thousands of gallons of milk every day. In Wisconsin, 50% of the state’s dairy products had nowhere to go while typical buyers such as schools and restaurants remained shut down and unable to purchase milk and cheese.
In Pennsylvania, where schools buy up to 40% of dairy sales by volume, the pandemic beleaguered an already-stressed industry that lost 470 farms in 2019. Some large dairies started donating milk directly to food banks rather than dumping it, but it took months for this to happen with the help of nonprofit intermediaries. Such arrangements were patches, not systemic fixes for gaps in a brittle supply chain.
Supermarkets Can’t Sell All the Milk
Milk was still in high demand at grocery stores and supermarkets, but the share that would normally go to shut-down schools and restaurants had no buyers. Dairy farmers couldn’t reduce milk supply in response, though, because cows continued to produce milk during the pandemic.
Grocery stores and supermarkets weren’t equipped to manage the volume of available milk. Their packaging requirements were different enough from schools and restaurants that relabeling and repackaging weren’t feasible. Milk not originally destined for retail outlets had nowhere to go but down the drain.
Milk waste and donations were signs that supply chains lacked resilience—the ability to bounce back from stresses, like a rubber band that returns to its normal shape after being stretched. Milk dumping was more a reflection of broken supply chains than of trends in supply or demand.
One Farm, One Economy
Restoring demand for milk that was being dumped could have taken months, at significant losses to producers. Yet mainstream agriculture—where the largest 4% of U.S. farms produce 66% of milk, meat and vegetables by value—doesn’t typically operate with a large supply buffer or prioritize resilience.
In New Jersey, farms are the fourth-smallest in the United States, averaging 76 acres. The Garden State’s dairy sector is particularly small, comprising only 50 farms and ranking 44th of 50 states in total milk production. But despite their small operations, New Jersey’s local entrepreneurial farmers served as models of a game-changing strategy.
Rather than selling their milk to large dairy processing companies, these vertically structured local farms raised cows, processed milk and other foods, and sold them directly to consumers at farm-operated markets and restaurants. Unsold items returned to farms as feed or fertilizer.
This system proved highly efficient, even during the pandemic, because farmers and their customers represented the entire supply chain. Customer demand for locally produced food surged throughout New Jersey and the United States.
A Resilient Food Future
New Jersey’s local farms were able to bounce back from disturbances like a pandemic because they added a collaborative, “horizontal” element to vertically structured farms. As networks of farmers and consumers grew, they became more connected and were able to flexibly pivot and adapt to meet demand, thus creating increasingly resilient regional mosaics of farms and customers.
The success of Garden State farms during the pandemic provided evidence that resilient food systems make agriculture smaller, not larger. As food networks rewired in the wake of COVID-19, one priority became fostering food systems that are flexible and diverse, like New Jersey’s farmer-consumer networks.
For instance, agricultural policies could be designed to accentuate the efficiency of small farmers and their capacity to nimbly respond to disturbances when larger-scale agriculture cannot. Nurturing such flexibility is critical for creating resilient food systems in an uncertain future.
