Home-Delivery Milk Makes Comeback in Surprise Boost for Dairies
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The home-delivery milkman is making a comeback as coronavirus-driven shutdowns across the nation choke off dairy sales to schools and restaurants.
“It’s been ridiculous,” said Edward Seabridge, owner of Suncrest Farms in New Jersey. “We had 1,932 calls in the last two-and-a-half days for new customers.” Closures of the state’s schools, day cares and nursing homes dealt a blow to his distribution company in Totowa. “We’ve had a 60% drop in sales,” he said. The jump in home deliveries will help, but it’s “not going to replace the business we lost.”
The Covid-19 outbreak is pressuring an industry already squeezed by trade wars and tumbling commodity prices. While bulk shopping at grocery stores eases, the closures of the industry’s major markets, including schools and restaurants, force many farmers to dump their cows’ milk.
A new $19 billion relief package contains about $16 billion in direct payments to agriculture producers struggling with coronavirus-related losses—allocating $2.9 billion to the dairy industry. The Agriculture Department will also purchase $3 billion in dairy, meat, and produce under the Coronavirus Food Assistance Program, for distribution to food banks and non-profits as millions of Americans are out of work.
Dairy Industry Wants Federal Aid as Its Markets Fall Off `Cliff’
Payments to producers aren’t expected until the end of May or early June, according to Senate Agriculture Appropriations Subcommittee Chairman John Hoeven (R-N.D.). Some small businesses are instead relying on emergency loans from the $349 billion Paycheck Protection Program, managed by the Small Business Administration under the third coronavirus-stimulus law (Public Law 116-136).
Douglas Wade, president of Wade’s Dairy, Inc., was one of the lucky few to receive PPP aid before the program ran out of money in 13 days, allowing his Bridgeport, Conn., company to keep employees. Normally, his dairy supplied 115 public school systems as well as local restaurants and diners.
“We just had so many customers that are not paying us, and we couldn’t pay for our milk bill without that,” Wade said in a telephone interview Tuesday.
Home delivery orders offer a much-needed reprieve for some dairy businesses. “That’s a good thing,” said Seth McEachron, co-owner of Battenkill Valley Creamery in Salem, N.Y. “Everything else is bad.” McEachron’s business had catered to coffee shops and restaurants in New York City, an epicenter for the Covid-19 outbreak.
“That is, as you can imagine, horrible right now—almost down to zero,” McEachron said in a telephone interview Tuesday. “We’re struggling.”
Many of his sales now come from home deliveries—a number that has doubled during the pandemic, he said.
Smaller companies that already deliver to homes are racing to keep up with a rapid increase in demand as families shelter in place, eat more meals at home, and limit their trips to grocery stores.
“Normally, it’s just us two,” said Samantha Stern at Holy Cow Delivery in Strasburg, Va., who runs the business with her husband.
“We got overwhelmed very quickly” by the influx of orders, but the virus-related demand quickly gave them “a little bit of relief” to pay off debts, she said.
`A New World’
South Mountain Creamery was “flooded with new customers” at the end of March, with its regular clients doubling and tripling their orders, said Tony Brusco, chief executive officer and co-owner of the dairy in Middletown, Md., at the northern edge of Washington’s suburbs.
“We were just exceeding the capacity of our delivery trucks,” Brusco said. “It just happened so fast.”
His team suspended new sign-ups and eliminated certain product lines, while hiring more drivers and renting trucks. “Our sales are much higher than they’ve ever been,” Brusco said.
Wade’s Dairy regained a tradition on Monday when it resumed home deliveries for the first time since 1992, Wade said.
“It’s a new world,” said Wade, whose family business dates back to 1893. “We’re not working with porch boxes. We’re not going out at 2 a.m. like the old home delivery routes did.”
His company adapted to delivering in the pandemic by requiring drivers to keep a social distance, which Wade said should result in “very profitable business.”
“I don’t know how long this is going to go,” he said, “but, right now, it’s booming.”
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