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Most Lebanon County dairy farms survive lost Dean Foods contract

Written by Daniel Walmer/The Lebanon Daily News | Jun 1, 2018 6:55 AM
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A yard sign outside Reed's Creek Farm in Lebanon. (Min Xian/Keystone Crossroads)

(Lebanon) -- Most of the 26 dairy farmers in Lebanon and Lancaster counties who abruptly lost contracts with Dean Foods in March have successfully found a new market for their milk.

Dean Foods, which owns Wengert's Swiss Premium Dairy in North Cornwall Township, told those farmers it would stop purchasing milk from them as of May 31.

While this initially caused a panic among many farmers, 22 of the 26 were able to obtain a new contract, according to Jayne Sebright, executive director of the Pennsylvania Coalition for Dairy Excellence. The other four elected to leave the dairy industry, she said.

That's a better outcome than farms that lost Dean Foods contracts have experienced in other states. In Kentucky, all of the milk producing farms were unable to find new markets, according to agriculture writer Sherry Bunting.

Millcreek Township dairy farmer Kirby Horst received a letter March 3 that Dean Foods will no longer purchase his milk after May 31. Horst explained the impact this would have on his family during a rally Monday at the Lebanon Valley Expo Center. Daniel Walmer

"I think it was a very positive testament to the support our farms have in Pennsylvania," Sebright said.

Alec Dewey, son of the owner of Harrisburg Dairies, which provided new contracts to nine of the farms in Lebanon and Lancaster counties, said the beginning of summer is a bad time for a dairy to add new suppliers since demand for school milk goes away until the fall.

"It was sort of a risk on our part, taking on this many farms this time of year," Dewey said. 

Still, it may benefit Harrisburg Dairies in the long run by providing them with more private milk sources to depend on when demand is strong - and the company felt an obligation to help those farmers, he said.

At least four Lebanon County grocery stores are also stepping up to support the dairy farmers indirectly by beginning to carry milk from Harrisburg Dairies, according to a Facebook post from Lebanon County dairy farmer Alisha Risser.

Dewey encouraged people to buy their milk from any dairy that sources its milk from local farms.

To do that, buyers can enter the dairy code of their milk carton on the website whereismymilkfrom.com. A map of dairies that source their milk in Pennsylvania is available at www.choosepadairy.com.

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Cartons of Harrisburg Dairies milk sit in a refrigerator at Sunset Grocery Outlet at 1650 N. 7th St. (Photo: Daniel Walmer, Lebanon Daily News)

Although the situation is better than expected for most Lebanon County dairy farmers, in some cases it is still less than ideal.

Like Swiss Premium, Harrisburg Dairies is a Class 1 milk supplier, meaning they are processing milk that is sold for direct human consumption. But not all of the former Dean Foods farms found Class 1 suppliers - some were picked up by a cooperative that will be sending their milk to a cheese plant, Bunting said.

Farmers whose milk is used for other classes of products, such as cheese, receive lesser compensation, Dewey said.

"Just because they have a place to ship their milk doesn't mean they're not taking a major pay cut in some places," he said.

Dean closes plants

After ending many of its contracts with dairy farmers, Dean Foods caused a stir by preparing to close several dairy plants as well. That includes Meadow Brook Dairy in Erie, where employees learned last week that the plant would close in late summer or early fall.

There has been no indication that production levels at Wengert's Swiss Premium Dairy at 2401 Walnut St. will be impacted by Dean's cuts. 

A Dean Foods spokeswoman did not respond to a Tuesday email requesting comment on the subject. She previously declined to discuss the issue, citing a company policy against sharing specific information about production volumes.

Dean Foods has said that its retreat in the dairy sector stemmed from a surplus of raw milk plus an increase in competition from "companies assertively entering or expanding their presence in the milk processing business." That's likely at least partially an allusion to Walmart, which has expanded its Great Value brand of milk.

Paige Peiffer of Lebanon attaches the milking machine to her cow during the Lebanon Area Fair on Thursday, July 31, 2014. Milk from the dairy cows milked during the fair does go to a milk processor and is sold for consumption right here in Lebanon County.. Jeremy Long -- Lebanon Daily News (Photo: Jeremy Long)

This story comes to us through a partnership between WITF and The Lebanon Daily News

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