Covid-19 dairy disruption: Japanese firms finding new ways to cope with surplus milk

14-Jul-2020 - Last updated on 14-Jul-2020 at 02:25 GMT

For Shinrinno Farm in the Tochigi prefecture, its total milk sales were down by 30% compared to before the pandemic ©Shinrinno Farm

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The Covid-19 pandemic has resulted in an unprecedented milk surplus problem for many dairy farmers worldwide, and the Japanese industry was no exception with demand from schools and foodservice outlets slumping.

According to Japan’s Ministry of Agriculture, Forestry and Fisheries, demand for milk from schools and businesses (e.g restaurants, cafes) had decreased 86.2% and 10.7% in March respectively compared to the previous year. Japanese schools typically offer milk in school lunches.

In April, Japan announced a nationwide state of emergency urging people to stay at home, closing restaurants and schools to curb the spread of Covid-19, resulting in a further milk surplus for farmers.

For Shinrinno Farm located in the Tochigi prefecture, its total milk sales were down by 30% compared to before the pandemic. As a small farm, it has about 30 Jersey cows with an annual milk yield between 100 to 150 tons.

The milk is typically sold via e-commerce or direct sales at the farm, and a small proportion to restaurants and roadside station stores near the farm.

Minister of Agriculture, Forestry and Fisheries Taku Eto told local media that it was difficult to adjust supply and demand in the dairy industry as milk production tends to increase in Spring due to calving season and cows have to be milked to stay healthy.

As demand for milk fell nationwide, Shinrinno Farm had resorted to making dairy products such as cheese or yoghurt with the excess fresh milk. However, the farm told us even these products were barely selling.

The farm has partnered with dot science Inc, a Japanese firm involved in agricultural research.

Ryusuke Kimura, its chief technology officer told FoodNavigator-Asia, that it had set up a project and created an online site to support sales of Shinrinno Farm’s dairy products.

Consumers can purchase 5L pasteurised milk for JPY4,000 (US$37) which has a shelf life of eight days under refrigeration conditions. Other products for purchase include cheese, that the farm is ageing between three to five months, and is taking advance orders for September and November.

The project is also promoting recipes that involve milk in hopes of increasing home consumption.

He added that dot science was also working with Murakami Farm located in the Miyagi prefecture.

Moo-ve along

Meanwhile, industry giant Morinaga Milk Industry has taken to producing more butter and powdered skimmed milk with longer shelf lives.

According to the Ministry of Agriculture, the production of powdered skimmed milk in March increased more than 14% from the previous year.

In April, the Ministry kicked off its Plus One campaign calling households to purchase one more dairy product whether it was milk, yoghurt or cheese, on each shopping trip.

In a YouTube video, the campaign also encouraged people to drink one more glass of milk every day.

As Japan starts to reopen, Kimura is hopeful that demand for dairy will eventually pick up.

In the US, dairy farmers were dumping as much as 8% of milk, with President Donald Trump announcing a US$2.9bn bailout for these farmers.

In the UK, the Dairy Response Fund 2020 was set up to provide a one-off payment to eligible dairy farmers in England, administered by the Rural Payments Agency.