After more than a hundred years in business, Gustafson’s Dairy in Green Cove Springs closed its doors Friday.
Joe Wright, president of Southeast Milk, Inc., or SMI, said the dairy closed Oct. 11 after being bought by SMI in April 2004. Southeast Milk, Inc. is a dairy cooperative that reaches members in Georgia, Florida, Alabama and Tennessee, and markets more than 3 billion pounds of milk annually.
Wright said Gustafson’s was too small and too old to remain efficient.
“It’s just easier and more profitable to operate a modern milk plant,” he said.
Wright added there were 36 employees working on the farm. Most will be laid off.
That doesn’t mean the Gustafson milk products will be taken off grocery store shelves forever.
Wright said Gustafson’s historic brand will continue to be sold and production will shift to Southeast Milk’s Plant City location. The cooperative has another plant in Belleview.
“It’s time for us to focus on our two other milk plants – Gustafson’s is the oldest of the milk plants,” Wright said. “Our other milk plants are just newer, larger and more modern.”
Gary Newton, an environmental administrator for the Florida Department of Agriculture and Consumer Services, said there’s been an increase of Florida dairy shutdowns in recent years.
When Newton started working at the agency in 1986, he said Florida had more than 600 dairy farms statewide. In June, the state had 128 dairies, he said.
No single reason is behind the shutdowns.
He said fuel companies are battling for corn, which increases the crop’s price. Because corn is one of the main staples for dairy animals, it becomes expensive to feed cattle.
When corn prices go up, cow feed prices go up, and the total production costs of milk rise as well, he said.
Also, an increase in diesel prices, he said, makes the transportation of cows and milk products more expensive.
“The price of milk fluctuates – it’s like a rollercoaster,” Newton said. “At times it’s really good and other times it’s tough. Some of those dairy men are able to weather out the storm, and others are not.”
Southeast Milk, Inc. representatives also said the plant shutdown was due to a “change in consumer base.”
Mary Sowerby, an IFAS regional dairy agent, said changes and increases of competition in the beverage market has taken a hit on liquid milk sales.
She said consumers now purchase drinks such as soda, sports beverages and juices instead of milk. She added that milk is more difficult to store because it requires refrigeration and can be a hassle for consumers.
“There’s definitely been a downturn and it’s been going on for years with the consumption of milk — that’s a sad fact,” Sowerby said. “People are drinking more Cokes, soft drinks and sports drinks. Unfortunately, they are getting away from milk stuff, which is why we have a country that is way overweight.”
Newton said the changing trends and consumer tastes in society have made an impact on the industry.
“For the last several years, it has been no secret that there has been a move to more low-calorie beverages and things like that, which is why your low-fat, reduced-fat and skim milk products are taking the sales of whole milk over the years,” Newton said. “But they are competing with your soft drink companies for beverages. It’s a very tough market out there.”
Data from the United States Department of Agriculture also indicates milk consumption being on the decline. According to USDA data, U.S. per capita fluid milk consumption has decreased from 237 pounds per capita in 1987 to 195 pounds in 2012.
Research from Amber Waves of the USDA Economic Research Service stated that since 1970, per capita consumption of fluid milk has fallen from almost 1 cup to 0.6 cups per day. She reported this was due to differences in eating and drinking habits of older and newer generations.
Newton said while there has been a decrease in the number of dairies in Florida, the number of cows in production has pretty much remained the same. He said this was because the dairies that remained in business increased their herd size.
Therefore, he said dairy production in Florida hasn’t fallen off, but the number of farms closing has increased. According to USDA statistics, the total U.S. milk production has increased from 170.1 billion pounds in 2002 to 200.3 billion pounds in 2012.