Getting Depressed About Oranges and Milk

April 3, 2020

Comparing the Great Depression to the coronacrisis.

In a book about the Great Depression, I read about orange growers in California who were unable to sell their crop because the price had dropped so low that it literally wasn’t worth anyone sending a truck. So they dumped the oranges and, to keep them from being pilfered, drenched them with heating oil.

The author was shocked by this, calling the growers “pathologically selfish.” I suppose that’s one interpretation, but I think I understand a little better where those growers were coming from. If I had busted my buns to bring in an orange crop, only to find it had all been for nothing, and then some bright-eyed, bushy-tailed type popped up and said “Too bad you can’t sell your crop. Why don’t you give it away for free?”, I might have poured heating oil on him along with the oranges.

This came to mind when I read a Reuters article about dairy farmers being forced to dump milk because it just can’t get to market in time. Dairy Farmers of America, the nation’s largest dairy cooperative, is forcing some farmers to throw away their milk because it would just go bad before it could be picked up. Other co-ops, like Land O’Lakes and Foremost Farms USA, are warning members that their milk might not get picked up either.

What makes this situation grotesque is that, unlike with oranges in the Depression, there’s plenty of demand for milk and prices are still high – at least on the retail level. Sales of liquid milk rose 53% for the week ending March 21 according to Nielsen, while butter was up 122% and cheese up 84%.

The problem is, of course, rooted in the coronavirus situation. Foodservice channels, especially school cafeterias, have dried up, which severely disrupts the demand for liquid milk and other dairy products. Co-ops and other processors have been unable to redirect supplies into retail quickly. Compounding the problem is that truck drivers, always in short supply, are harder to find than ever.

The dairy farmers are not going to suffer as much as the Depression-era orange farmers, because their co-ops will pay them for the milk they dump. But that doesn’t mean they’re getting off scot-free. The co-ops will incur losses because they can’t get milk to a willing market; all the farmer members will share in that loss.

The lesson is one that has been drearily repeated throughout history. Famines and food shortages are rarely caused by a lack of food; they’re caused by lack of a functioning system to transport and process it. It doesn’t matter if the trucks don’t come because prices are too low, because there’s no one to drive them, or because demand is shifting between channels. The bottom line is the same: The food doesn’t get to the people who want and need it.

Sponsored Recommendations

Learn About: Micro Motion™ 4700 Config I/O Coriolis Transmitter

An Advanced Transmitter that Expands Connectivity

Managing and Reducing Methane Emission in Upstream Oil & Gas

Measurement Instrumentation for reducing emissions, improving efficiency and ensuring safety.

Rosemount™ 625IR Fixed Gas Detector (Video)

See how Rosemount™ 625IR Fixed Gas Detector helps keep workers safe with ultra-fast response times to detect hydrocarbon gases before they can create dangerous situations.

Get Hands-On Training in Emerson's Interactive Plant Environment

Enhance the training experience and increase retention by training hands-on in Emerson's Interactive Plant Environment. Build skills here so you have them where and when it matters...