Why Is There a Milk Shortage in Some Parts of the U.S.?

The U.S. is facing a shortage of many food items including turkeys, pet food, Lunchables, juice boxes, and bottled water. Milk and dairy products are also in short supply in certain parts of the U.S. Why is there a milk shortage in the U.S.?

There isn't a milk production shortage in the U.S. as a whole. In fact, milk production continues to improve YoY. The milk production in 24 major states during September totaled 17.3 billion pounds—up 0.4 percent from September 2020. So, what's causing the milk shortage? Like with the other shortages, supply chain issues and the labor shortage are the main culprits.

Many schools are having a hard time getting milk. According to a Business Insider report, Denver Public Schools is struggling to get enough milk to serve at breakfast and lunch. This has been a common problem for schools in Denver and in many other cities in the U.S.

According to Monica Ganley, an analyst with the Daily Dairy Report and the principal at a consulting firm in Buenos Aires, “Dairy plant operators are frustrated by a scarcity of labor, and many say that given milk availability and dairy demand, they would happily run their plants harder if they could only hire the needed labor.”

Transportation issues and the truck driver shortage are also impacting the dairy industry. There's an overall truck driver shortage in the U.S., which is adding to the supply-side constraints. In the U.S., the truck driver shortage as of 2018 was a whopping 61,000. If the current trend holds, the shortage is expected to rise to 160,000 by 2028. As 68 percent of the freight is moved on U.S. highways through trucks, the driver shortage impacts the economy as a whole.

Specifically, there's a shortage of milk truck drivers. Milk truck drivers transport milk from farms to processors. They also take samples. National Tank Truck Carriers estimates that between 20 percent and 25 percent of fuel tankers in the national fleet are parked this summer due to a driver shortage. There's a deficit of both long-haul and short-haul truck drivers.

Danone, which is one of the world’s biggest dairy suppliers, said that supply chain issues and scarcity in the U.S. trucking industry have complicated its ability to get deliveries to its North American factories. Danone CFO Juergen Esser said, “We’re seeing spot rates for trucks in the U.S. at levels that we have never seen before.”

U.S. consumers can't expect the food shortage issues to vanish overnight. In fact, the supply bottlenecks are expected to remain at least until the holiday season is over. Part of the congestion in supply logistics and higher demand is due to the upcoming holidays. After that, a slight easing might start. However, there are chronic issues like the truck driver shortage. These issues need to be resolved with structural changes in the economy in mind.