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As Recession Deepens, So Does Milk Surplus

http://www.nytimes.com/2009/01/02/business/02dairy.html?hp
FOWLER, Calif. — The long economic boom, fueled by easy credit that allowed people to spend money they did not have, led to a huge oversupply of cars, houses and shopping malls, as recent months have made clear. Now, add one more item to the list: an oversupply of cows. And it turns out that shutting down the milk supply is not as easy as closing an automobile assembly line. As a breakneck expansion in the global dairy industry turns to bust, Roger Van Groningen gets to deal with the consequences. In a warehouse that his company runs here, 8 to 20 trucks pull up every day to unload milk powder. Bags of the stuff — surplus that nobody will buy, at least not at a price the dairy industry regards as acceptable — are unloaded and stacked into towering rows that nearly fill the warehouse. Mr. Van Groningen’s company does not own the surplus milk powder, but merely stores it for the new owners: the taxpayers of the United States. To date, the government has spent about $91 million to buy up sacks of milk powder. “The thing is, they are going to produce it because they have to milk the cows,” Mr. Van Groningen said. “It’s like a river. It keeps coming.” The bags of milk powder represent a startling reversal of fortune for the dairy industry, which flourished in recent years thanks in part to a growing appetite for milk, cheese, ice cream and pizza in places like Mexico, Egypt and Indonesia. Many of those countries, of course, were benefiting from a global economic boom led by free-spending consumers in the United States.
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January 2, 2009 - Posted by | Agricultural Warfare

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