Arla Foods notified 11 dairies in Wisconsin that they would no longer be buying their milk.
Those 11 farms are about a third of the farms supplying the Hollandtown cheese plant that is the leading maker of Havarti cheese in the U.S. The Hollandtown dairy plant started producing milk for Arla in 1998. The plant was later bought by Arla in 2006.
Donald Stohrer, the general manager for Arla Foods Inc., USA, tells the Wisconsin State Journal that the plant has an oversupply of milk.
“We tried to wait this out for awhile. But it wasn’t turning around and we had to make a decision,” Stohrer says.
Arla is working with the state Department of Agriculture, Trade and Consumer Protection to help the 11 dairy farms find different plants for their milk.
Wisconsin Public Radio reports that another representative with Arla blames “increased production and market volatility” for the contracts being dropped.
Last year Wisconsin saw 75 producers lose contracts with Grassland Dairy Products and earlier this year Dean Foods stopped buying milk from approximately 100 dairy farms.
Mark Stephenson, director of dairy policy analysis at the University of Wisconsin-Madison, says the dairy industry will probably continue seeing this trend.
“This is something that's a bit new to our industry, but I suspect we'll see more of it,” Stephenson says.