Wolf Administration Echoes Request of Affected Dairy Farm Families
Harrisburg, PA – Secretary of Agriculture Russell Redding announced that he has sent a letter to Dean Dairy Holdings LLC following the announcement that the company provided termination notices to 42 Pennsylvania dairy farmers, effective May 31, 2018. Sec. Redding’s correspondence requested Dean Foods to extend the deadline so that those affected may more effectively transition to other markets.
Yesterday, farmers affected by Dean’s decision asked the company to extend their agreements through the end of the year.
“The Department of Agriculture supports the commonwealth’s dairy farmers, and is committed to providing communities with the resources and connections they need to ensure that our dairy industry will thrive in the years to come,” said Sec. Redding. “Expecting farmers to make life-changing decisions in the span of 90 days is difficult enough without all of the complexities associated with a business. These producers need more time to do what is right for them, their families, and their businesses.
The dairy industry is currently experiencing challenges as processors consolidate or move, consumers exercise their purchasing options, and farmers see a surplus of product they are unable to sell.
“We know that there are opportunities and that dairy will remain a key part of our agricultural sector for the foreseeable future, although the decisions dairy farmers and the commonwealth face over the next 12 to 18 months will significantly shape its prospects,” added Redding, pointing to recent studies performed for the Department and the Center for Dairy Excellence.
One study looked at the potential for Pennsylvania to support additional dairy processing capacity. It found the state could support new plants for processing “other” cheeses—or non-American types, including Italian and specialty cheeses—and that those plants could significantly reduce overall supply chain costs, create more than jobs, while also contributing to the economic activity to the state.
Last month, Sec. Redding testified before the House of Representatives Agriculture Committee to discuss the crisis and ways the Department of Agriculture is poised to help. Additionally, the Department last week placed several resources online for dairy farmers experiencing hardship.
The letter sent by Sec. Redding follows:
Mr. Brent Bunce
Director, Dairy Direct Operations
Dean Dairy Holdings LLC
2711 Haskell Avenue, Suite 3400
Dallas, TX 75204
Dear Mr. Bunce:
The Pennsylvania Department of Agriculture is deeply concerned about the well-being of the 42 Pennsylvania dairy farm families that recently received notices of termination from Dean Dairy Holdings LLC. It is because of this concern that I ask Dean Foods respectfully to extend the length of time provided to these farms to find other markets.
I understand the challenging dynamics that exist in the dairy industry today, and I recognize the hardship that Dean is facing with the loss of customer sales. However, in talking with others in the industry, I also recognize the extreme stress that all dairy farm families are under presently. As the industry works through these challenges, this stress may cause further consolidation among farms, presenting new market opportunities – opportunities that do not currently exist – to these farms.
An extension beyond the current May 31 deadline would allow farms more time to develop an effective transition plan to minimize the risks involved with a fire-sale scenario. We are working with private industry and our counterparts in the public sector to provide resources to these farms so they may develop a path forward that is in the best interest of their business and their families. However, it is difficult to execute any transition plan in 90 days, especially with the time needed for pre-planning stages. Providing additional time for the transition to occur would give these farms more opportunity to explore their options thoroughly and ensure that their decisions are not made in haste.
I appreciate the role Dean Dairy Holding LLC has played and continues to play in Pennsylvania’s dairy industry, and I recognize the difficult position in which your company finds itself. Our greatest concern now, though, is for both the future of these farms and the well-being of these families. These farms are generational businesses, with many in operation for more than 100 years. They are vital contributors to our local communities, and they are owned by families who have invested their entire life’s work in dairy. For these reason, I ask respectfully that you consider an extension on your original notice to allow these farms more time to execute their transition plans.
Russell C. Redding
For more information about the Pennsylvania Department of Agriculture’s programs and services, or to read the state’s Agriculture Economic Impact Study, visit the department’s website at www.agriculture.pa.gov.
MEDIA CONTACT: Casey Smith - 717.783.0133
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EDITOR'S NOTE: Dean's Director Brett Bunce was incorrectly referenced in the letter as Brett Bruce. We regret the error.