Dairy Company Ditches 11 Milk Suppliers in Wisconsin

International brand Arla Foods cut ties with dairy producers due to overproduction of milk and increased market volatility amid shifting consumer habits.

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International dairy company Arla Foods will end its contracts with 11 milk producers in Wisconsin. A spokesperson for Arla Foods attributed the change to “increased production and market volatility.” Mark Stephenson, director of Dairy Policy Analysis at the University of Wisconsin-Madison, explained that the move—which is becoming increasingly common across the country—symbolizes an overall shift in the dairy industry. “It was the case that if a plant happened to drop their customers or go out of business, that you’d typically have another plant right there on the farm the following day looking for additional milk supplies, because the state was tight on milk production,” Stephenson said. “That’s not true now, and so we find ourselves in a different kind of position, and farms need to worry about not having a home for their milk.” Similarly, this month, Dean Foods is ending contracts with more than dozens of dairy suppliers in Pennsylvania. In recent years, the dairy industry has experienced a slump in milk prices due mostly to excess production in a time when more consumers are choosing plant-based alternatives. Former dairy farms have transitioned their business models to capitalize on the growing plant-based milk industry, including Elmhurst Dairy—which ceased its operations as a dairy processing facility in 2016 and re-launched with Elmhurst Milked non-dairy products made from plant-based sources such as oats, peanuts, walnuts, cashews, and pecans.