3 Southeast Dairy Events: Networks Working Together to Find Solutions

A Compilation of stories and news about 3 challenges affecting Southeast Dairy Producers:  Dean Foods, Maryland-Virginia and Piedmont

 Southeast Dairy:  In the News. Pushing Forward.
 
Introduction:
In the past two weeks, in a time of already depressed milk prices, there has been a three-fold challenge to dairy farms in the southeast.  Tennessee, Kentucky, Virginia, and North Carolina all have farmers affected, with varying degrees of uncertainty about their milk buyer futures.
To say these past days have been painful and a flurry of concern, high emotions, and rumor mills have resulted is an understatement, but yet, as the dust settles, some activity has encouraged some hope, and herd owners are beginning to look forward. Many are making decisions based on faith, and in a calm fashion based on what they believe best for their farm. Some of those farms are being public, while others are remaining cautious and quietly seeking answers behind the scenes.
Bright Spot? Yes!   One farmer asked if there was going to be any good news to share about this whole mess, and yes, actually, there are two:
First, phone calls, texts, and Social Media outcries have indicated loudly and clearly that consumers, government officials, fellow farm organizations, and economic development personnel are indeed concerned about preserving ‘local’ or ‘regional’ milk in their areas, and appear to be eager to learn how they can help accomplish that.
Hopefully, this newfound energy can be channeled for long-term purchases of local milk, from local farms.  Time will tell. Consumer outreach is going to have to continue.
The second is this:  We still have upwards of 40 herds (at least in TN) shipping to Dean. The company is still the largest volume buyer of ‘local’ milk in TN at its three plants.  Putting that in perspective, every Dean Direct herd in Indiana,  with the exception of one, received letters of notice. Several were herds well over 1000 cows.
Background:  The three part challenge:
1.) Dean Foods:  On Friday, March 2, news broke of upwards of 115 (tallies still underway) farmers in 8 states receiving 90-day termination notices of their supply agreements to Dean Foods plants.  10 Tennessee herds and 22-25 Kentucky herds were affected, with 25-27  in Indiana, 42 in Pennsylvania, 6 in the Carolinas, and a yet unknown number in New York.  Three plants in our area – at Athens, TN, Spartanburg, SC, and Louisville, KY are involved in the contract termination decisions.   Herd sizes in all states range from under 100 to 1000 cows; 20 Million pounds of Indiana milk will need to find a new home, or be removed from the already overabundant nationwide supply.
The herds involved were Dean Direct producers, meaning the farm itself had a purchase agreement with Dean Foods plants, instead of gaining access to the plant through a milk co-op. Farmers who were members of co-ops did not receive these termination letters.  All of this activity followed a Dean Foods Earnings Announcement on Monday, Feb. 26 in which the phrases such as ‘rescaling the supply line’ foretold of company wide cuts to come.
2.)  During:  the week prior to the Dean Foods announcement, rumors began to circulate that Piedmont Milk Producers, based in Blountville, TN and serving farms in TN, VA, and NC,  was restructuring their business. (Story below with a video link)
3.)  MD-VA Milk Cooperative with 1,500 members from Pennsylvania to Florida, and some in Kentucky and Tennessee, sent a Feb. 27th letter to all of its members that their advance milk payment checks, expected at the end of the month, would fall to levels of $12.62 cwt in FO 5 & 7, and $10 in FO 1 and $33. The company said it was working on financial restructuring and was renegotiating credit facilities. Over the weekend, sources have begun to indicate that the problems may have been resolved to some degree, but the company has not made any official announcements. With settlement checks expected within a couple of days, some direction will be known.
In the days since, there has been a flurry of activity following the first notices: meetings of  farmers, meetings of farmers and agribusiness personnel, meetings of dairy organizations, and frequent phone calls between many parties in positions to help chart a future course.  AgCentral has been busy assisting producers in a variety of ways in a three-state area. While we have yet to have a formal working group to address what can be done and how to approach a dairy future, a tremendous amount of contacts have been made information gathered.
Following is a “Digest” of some the best information available, in no particular order – stories mentioned include stories of the Watsons and the Stooksburys, as well as a couple of stories from Ohio which further outline the far-reaching affects of the Dean announcements:
1.) Dave Natzke, an experienced and respected dairy industry reporter, now with Progressive Dairyman, published a broad perspective view of the Dean Foods story, and puts it in context with the dairy industry and events across the country. In his article, Dave reports that the Walmart plant was originally announced as a $165 Million Dollar venture, and provides a glimpse into how the Walmart plant may source their milk.
2.) Sherry Bunting, Farmshine, reports with a focus on PA, where 42 herds lost Dean contractsShe notes hauling routes were a factor in terminated Pennsylvania herds, and reports the loss of a Food Lion contract, which was a factor which triggered a decision regarding 5 TN herds in Greene and Hamblen Counties.
From the article: “This affects all size herds and is not a large or small farm thing,” said [Reace] Smith, [of Dean Foods Corporate Communications.]  While she was unable to supply specific information about the farms that were terminated, she said the widespread volume adjustments at multiple plants across four Federal Orders was necessary do to the new Class I plant (Walmart) coming online this month and the loss of a contract through a competitive bidding process. (Food Lion).” 
It is the loss of that Food Lion contract, previously filled largely through a Carolina plant(s), which created a shift in milk hauling from plant to plant, and created an excess at the Dean/Pet plant at Spartanburg, SC, which had to be eliminated.  The milk from five (5) producers in Hamblen and Greene Counties in TN was being hauled to Spartanburg. Those producers are now searching for new markets or making decisions to sell cows.
Dewey Morgan, of the Daily Post-Athenian, in the hometown of the Mayfield plant,  cites these significant stats:
Regarding declining consumption and increased production: “Americans are drinking about 3 gallons less per person since 2010, and 11 gallons less than 1975, while every year, 350 Million more gallons of milk are produced than the year before.”
Amount of local milk: The Dean Foods plant in Athens ‘still sources 90% of our milk from Tennessee.’
The Watson Family: their stories on WVLT-TV and on the Knoxville News-Sentinel website:
The Watsons, who farm near Sweetwater, TN, were one of the southeast TN farms who received 90-day notices.  The senior generation is Robert and Rosemary Watson (mom and dad), who farm with their sons Josh and Caleb.  The family is known for being extremely generous members of their community.  Both Josh and Caleb have been featured in news stories in Knoxville, TN media:
  •  Josh: From WVLT-TV, a story and video clip: Josh states that he doesn’t entirely blame Dean Foods. He adds: “there’s a lot of jobs that revolve around the dairy – it will hurt them.”
  • Caleb: Both a video and a photo album have been posted at the Knoxville Sentinel website. Caleb notes the family will continue to look for a milk buyer, and will look at other options to diversify, he says they will survive.
  • Front Page: The Knoxville News Sentinel published a front page story featuring Caleb on Tuesday, March 13.
Piedmont considering new business structure and how the company operates: story on Knoxville WBIR-TV
  • Brant Stooksbury, and his father Brian in Jefferson County, currently ship their milk through Piedmont Milk Sales, with offices at Blountville, TN. Piedmont, who represents farms in Northeast TN, Virginia, and North Carolina (the great majority are in NC) is making business changes.
 
Farm & Dairy:  Provides additional details on  WalMart distibution
WKBN-TN at Waynesboro, Pennsylvania – a video story describing some of the trickle down effects.
Ongoing:  This story will continue to evolve over the next few weeks, and spring crop work is already cranking up.  We know this challenge is great, but this region has overcome challenges before: at this time 25 years ago, many of us were digging out from a record blizzard, and some went without power for days. 27 years ago, in February of 1991, 400 herds received notices of a Pet bankruptcy, and lost a month’s worth of milk payments, along with having to scramble to find new milk handlers – there were no 90-day notices.
No doubt, our dairy industry is changing, but we have proven we can survive.
P.S.   Rod Carmichael has scheduled a complete herd dispersal for April 27.  Please mark that date on your calendars and keep Rod and Donna in your thoughts.

 

 

Fulfilling a Milk Drive Legacy: Randy Davis Memorial Fund Purchases in June Dairy Month

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The Passion of Randy Davis for promoting the goodness of milk is legendary to those who knew him, or who ever encountered him.

His legacy will continue to touch thousands of families this June Dairy Month 2017 following Randy’s untimely death in November of 2016.   To honor Randy’s life mission, the Randy Davis Memorial Milk Drive Fund was established.  Thanks to the kind generosity of his friends, family, and dairy community, the fund thus far has accumulated approximately $5,000, with contributions still coming in.

Following Randy’s life example, the Memorial Fund was set up to accomplish these goals:

  • To honor Randy’s passion for dairy farming and milk itself
  • To honor Randy’s impact on the Southeast dairy community, and his love for regional farms and dairy farm neighbors
  • To get fresh, nutritious milk into the hands of families who need it the most, with distribution to be accomplished by area Food Banks and charitable organizations
  • To connect area farms with their non-farm neighbors

Thus, the fund monies are designated to purchase brands of milk who source milk from southeast farms, reinforcing that milk is not only a nutritional powerhouse, but is also an economic generator in local economies.   The milk purchased is to be donated primarily to Second Harvest, who will then distribute it to local food banks through their networks. Other charitable organizations may benefit as well.

Because June Dairy Month was a highlight of the year for Randy, it was only natural that this month was a fitting time to accomplish those milk buys, donations, and deliveries.

Those funds are  currently being dispensed through a combination of private milk purchases in bulk quantities, and through milk buys at on-site milk drives taking place at Knoxville-area Ingles stores on June 1st, 2nd, and 3rd.   It is anticipated a final ‘buy’ will take place later in the summer, hopefully by July 1st, with the method yet to be determined.

Purchase Event 1 – Memorial Fund Private Buy with Mayfield Dairy

The first purchase was completed on May 30, 2017 at the Mayfield Distribution Center in Knoxville, TN.    A group of Randy’s family, Second Harvest officials, Mayfield officials, and Memorial Fund Administrators gathered to mark the occasion.

824 gallons! A total of 824 gallons was delivered to Second Harvest – East Tennessee, who will then distribute those gallons to local food banks in their 18-county service area.  572 gallons were purchased with Memorial Funds, and Mayfield generously donated an additional 252 gallons!  We cannot thank Mayfield Dairy enough!

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In the photo from left:  Roy Settle, First Bank & Trust, and Steve Harrison, Memorial Fund Committee members, John Randel, Tyler, and Alli Davis Kamper, Mark Aranda and Aaron Snukals, Second Harvest East TN, Kris Thomas, Mayfield Distribution Center, Lynn Davis, Samantha Davis Craun, Cindy Curtis, Violet and Gene Davis (Randy’s parents).

Purchase Event 2:  Memorial Funds will buy milk at Knoxville Ingles Milk Drives

For the past four years, Randy had been instrumental in facilitating and organizing on-site Milk Drives at area retailers in East Tennessee.  These milk drives, some early ones at Kroger, with the bulk of them occurring at area Ingles groceries, are supported by Tennessee’s Dairy Farm Families via the Tennessee Dairy Promotion Committee.

Country Q 100.3, a Knoxville area radio station, and Ingles groceries have been welcome and excellent partners in these drives.  The total events have been coordinated by Kay Bradley, who personally has purchased lots of milk for the drives.

To further honor Randy, this year’s store milk drives have been designated the “Randy Davis Memorial Milk Drives” by Q 100.  They even have a tab at their home page!

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If a person wishes to contribute but can’t make it to one of the stores, contributions can be made online here!  

This year’s on-site Milk Drives are schedule for June 1-3.  In short, customers who visit stores are encouraged to purchase milk from the store’s dairy case and then bring to a Second Harvest refrigerated truck who collects milk during the event. Last year’s event yielded approximately 4,000 gallons total for Second Harvest.  (Learn More.) 

Monies from the fund will make two purchases, in the amount of $850 each, at the store events on Friday, June 1st, at the Lenoir City Ingles, and on Saturday, June 2nd, at the Farragut Ingles.

Lenoir City is in Loudon County, Tennessee’s #1 County in Milk Production (also Randy’s home county!), so it was a natural to make a purchase there.  The Memorial Fund will make a purchase at approximately 6:30 pm (some will be traveling back from Nashville).

The Farragut Milk Drive on Saturday, June 2nd, will be joined by two UT Football #VFLs (Vols for Life)!  We’re so happy to announce that Jayson Swain, a Vol Network commentator, and Antoine Davis, who administers the Vol For Life Program, will be in attendance to help promote the cause!

We invite any of Randy’s wide circle of friends to join us at either of these events!

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Randy was a man of deep faith, and many have been privileged to hear his testimony.

“Whatever you did for one of the least of these brothers and sisters of mine, you did for me,”  is a life’s instruction found in Matthew 25, verse 40.

As we honor Randy in this first June Dairy Month without his physical presence here on Earth, his faith, illustrated by this verse, will live on through his Memorial Fund purchases and these milk drives.

The Davis Family, the Fund Administrators, and the Dairy Community are grateful to each and everyone who has helped to see that Randy’s legacy continues on.

There will be more in the coming days about the Memorial Fund activities and the Milk Drives, but for now “Thank You.”  We hope to see you at one of the Milk Drive Events!

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