To the untrained eye, it may have looked like Brian Rexing was working his field last week. And he was, in a way. But in reality, he was doing something he never thought he would and hopes he never will have to do again: dumping milk.

Rexing is a dairy farmer in Indiana’s southwest corner. But last week, he was forced to dispose of nearly 30,000 gallons of milk in the fields on his farm. There was nowhere for the milk to go.

“When you can’t finish it and get it to market and see it in consumers’ hands, that’s tough, that’s our livelihood,” said Rexing, who owns New Generation Dairy in Owensville. “It’s probably one of the most painful things for farmers.”

The demand for milk and other dairy products is high, but the coronavirus pandemic is disrupting the supply chain and creating a host of problems that stand in the way of getting products from the farms to the stores.

The closures of restaurants and schools – major milk product customers – coupled with a rapid drop in the export market has led to an abundance of milk. And yet grocery stores across the state and country placed limits on the amount of milk and other products customers can buy.

That’s because it’s not an easy shift for plants that process milk, butter and cheese to pivot from packaging for food service to retail – creating logistical nightmares, said Doug Leman, executive director of Indiana Dairy Producers. Milk is a perishable product: It can’t freeze like meat, it can’t be put in a silo like grain, and it can’t be donated without processing, like fruits and vegetables.

So farmers across the county, including here in Indiana, are dumping milk.

“Their hands are tied, and producers really don’t have many choices,” Leman said. “So unfortunately it ended up on lagoons and ended up in fields.”

'Knocked the wind out of everyone'

After 4-5 years in the doldrums with stalled market growth and prices, 2020 was starting out as a good year, Leman said. The export market was up and it looked like the dairy industry might actually come out of the cellar.

“And then this happened,” Leman said. “It knocked the wind out of everyone.”

Milk product sales are actually up in stores, according to data from Nielsen, a global provider of market research. Cow’s milk sales are up 26% in the last four weeks compared to last year and butter is up 65% and cheese up 42% over the same time frame.

And the panic buying was good for producers, at first, Rexing said. But then it created a kink in the chain. Stores started putting limits on the amount of milk in response to the demand, according to the FMI, the food industry association, a group representing food retailers and wholesalers.

“The last thing we want to see at a store is the limit sign,” Rexing said, “there’s plenty of milk out there.”

Why? Because at the same time, all the restaurants and schools – major milk and milk product buyers – started closing their doors.

And this is all hitting at a time that’s known as the spring flush. The slightly warmer temperatures that come with spring weather make cows more productive for a few months before the true heat of summer hits.

While customers – under stay-at-home orders and cooking more – are buying more milk products, it’s not been enough to make up the losses seen from those other sectors. With all these factors coming together, dairy farmers are overproducing by as much 20%, Leman said.

All that excess supply and the lower demand – from limits and the diminished food service market – has caused prices to plummet: They are anywhere from 20% to 30% what they were before, according to Leman.

“Prices went from looking promising to dropping very fast,” he said, “and lower than the previous years.”

In many places, the price that farmers are receiving has dropped below what it costs to produce the milk, according to analysis by agricultural economists.

Rexing said he’s never seen anything like this, and he struggles to find something to compare it to. The closest thing is a blizzard when the roads make it hard for the haulers to get from the farms to processors. Even still, he said, that means farmers might have to dispose of a half-days-worth of milk.

His 30,000 gallons was nearly three days-worth for his farm of 1,200 cows.

“This is the longest blizzard we’ve ever been in,” Rexing said.

'Can't turn off the cows'

There is only so much that can be done with the excess supply.

You can’t turn the cows off or tell them to take a vacation, Brian and Jill Houin said. Owners of Homestead Dairy in Plymouth, Ind., the Houins said they have been fortunate to not have to dump milk – yet.

They echoed that the milk is there, but processors are struggling to keep up.

The processor that the Houins work with, which supplies to Walmart, usually runs at about 70% capacity, he said. But in recent weeks it’s been running at 100%, he said, and still can’t keep up. The facility stopped the production of chocolate milk and skim milk to be able to get everything through.

Other processors that normally produce for restaurants and food service can’t as easily shift gears to go into the retail market. These are plants that normally produce 5-pound buckets of cottage cheese or massive bags of shredded cheese for restaurants and schools, for example. That packaging is not ready for grocery store shelves, said Heather McCann of Dairy Farmers of America, a national milk marketing cooperative.

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The co-op had one plant in northeast Indiana that dries milk into powders for other products. They usually call the Goshen facility a “balancing plant” that they use when there’s some excess milk.

“They are running above capacity these days, I will say that,” McCann said. “They are working around the clock to make sure product doesn’t hit the ground.”

None of the DFA member farms in the region that includes Indiana have had to dump milk at this point, according to McCann. But she knows that could change at any moment.

Leman could not give an exact number at this point on how much milk was lost in Indiana last week. Still, he said he knows multiple tankers – each holding 6,000 gallons – had to be disposed of: “It was a fair amount.” And Rexing said he knows several other dairy producers that have had to dispose of milk.

The Houins said they have been contacted by a local co-op asking if they would be able to take excess milk in their methane digester – a piece of equipment that takes organic waste and converts it to an alternative fuel. They will take the milk, they said, but the co-op has not sent any yet.

Other states have also been hit by the pandemic’s market disruptions. Farmers in Wisconsin and upstate New York, major milk producers, have each had to dump millions of gallons in recent weeks.

Losing dairy farmers

The uncertainty over how long this all will last has farmers worried. One of their main alternatives – selling the cows for beef – isn’t really a viable option at the moment, Rexing said. The beef market has taken a hit, too, and prices have dropped amid the crisis.

“So if we decide to sell the cows we take a hit,” Rexing said, “and if decide to keep them we take a hit.”

That said, the dairy market and supply chain looks like it is ever-so-slightly stabilizing in the last few days, according to Leman. But those in the industry know that could change again just as quickly as it did before.

They are particularly concerned if a processing plant were to be shut down as a result of a positive coronavirus case in the facility. “That could be devastating,” Leman said.

But extra precautions are now in place: Different areas are being sectioned off so they hopefully wouldn’t have to shut the entire facility, and haulers are no longer allowed in the break rooms at many plants, according to the Houins. The producers themselves are also implementing social distancing practices and procedures at their farms as much as possible to keep their employees safe.

McCann said they want to see all the limits lifted at the grocery stores, as customers are now spacing out their shopping trips more regularly. And the Food Marketing Institute said that retailers are being receptive to th

The Dairy Farmers of America are also working with processors to still be able to take and process the milk – it is illegal to distribute raw, unpasteurized milk – to be donated.

Food banks and pantries are particularly stressed for donations at this time. The coronavirus pandemic is expected to increase the number of food insecure people in the United States, as children are no longer receiving meals at school and many individuals are no longer able to work, according to Feeding America, a nonprofit hunger relief organization.

“Farmers would much rather see it go to their communities,” McCann said. “Milk has zero value when it hits the ground.”

Farmers are resilient and are staying positive during this time. Still, Leman worries that some producers won’t be able to make it. Since 2016, Indiana’s dairy industry has shrunk by more than 20%.

“I think without a doubt we will lose more producers through this and because of this,” Leman said.

There is hope, he said. In the recent stimulus package passed by Congress, farms are eligible for support. Leman said there is a “mad scramble” to fill out these forms and submit them. He added that he has not yet heard of any producer that has been approved, but they are anxiously waiting.

Although this is uncharted territory, Rexing wants to assure customers they don’t have to worry about having enough milk.

“We will make it through this,” he said.

Call IndyStar reporter Sarah Bowman at 317-444-6129 or email at sarah.bowman@indystar.com. Follow her on Twitter and Facebook: @IndyStarSarah. Connect with IndyStar’s environmental reporters: Join The Scrub on Facebook.

IndyStar's environmental reporting project is made possible through the generous support of the nonprofit Nina Mason Pulliam Charitable Trust.