More dairy was dumped this year than the past 16 years, according to a report released by the US Department of Agriculture on Wednesday.
The report stated that the overstock is likely related to a spike in the price of milk and other dairy products during a shortage in 2014.
To compensate for high demand at the time, farmers bought more cows and began running production overtime, eventually exceeding demand and resulting in a price drop. The price of milk has dropped 22 percent since spring, the New York Post reported, and 33 percent since 2014. The dramatic decline in value made it unprofitable to continue to transport dairy to markets, or to export it to places like China, normally a major importer and, as a consequence of free market economics, the mass milk spilling began.
The reason for the spilled milk is that the glut has cut the price of milk 22 percent since spring, to $16.39 per hundred pounds on Wednesday.
At that price, some farmers can’t afford to truck the milk to market, according to the Wall Street Journal, which first reported on the sharp increase in discarded milk.
The glut is the result of a price spike in 2014, which persuaded farmers to bring more dairy cows on line, the Journal reported.
Milk cows have increased by 40,000 this year, and each one is producing 1.4 percent more milk than a year ago, according to the US Dept. of Agriculture.
Price have declined 33 percent since 2014, but the market got especially challenging this spring, said Chris Galen, a spokesman for the National Milk Producers Federation.
Because the surge was global, US producers had difficulty exporting the surplus in timely and cost-efficient ways.
