Published on 05/06/98

What's the Big Deal about Georgia Dairies Failing?

A University of Georgia economist said the failure of the Southern Dairy Compact bill may speed many Georgia dairies on their way out of business.


Most Georgians' only connection with a dairy is at the grocery checkout counter. Since the governor vetoed the bill partly to keep milk prices from going up, he probably has the shoppers' support.

But it's not all that simple, said Bill Thomas, an Extension Service economist with the UGA College of Agricultural and Environmental Sciences.

"The bottom line is that having to ship our milk in from distant states will drive prices up, too," Thomas said.

He predicted that Georgia milk processors won't always be able to ship fluid milk in from nearby suppliers.

"Milk production is declining throughout the Southeast," he said. "Today we can go to North Carolina or Tennessee for milk. Tomorrow, we will more likely have to go to Wisconsin or New Mexico."

When the distribution lines get that long, he said, "and when you have to have it every day, the cost will be greater."

The state has added three fluid milk processors in the 1990s, Thomas said. Mayfield, Publix and Kroger opened plants, respectively, in Jackson County, Gwinnett County and Atlanta. Georgia already had Kinnett, Peeler and Parmalat plants and several smaller processors.

As more local farms fold, he said, these plants will have to ship milk from increasingly distant suppliers. The higher shipping costs could squeeze them out of business, too, since it costs less to ship packaged products than raw milk.

"We may end up having to ship in milk packaged in Arkansas or some other state," he said.

Shipping from distant states takes more time, too. The sell-by dates on milk jugs would still tell buyers when the milk is best. But the sell-by dates on milk brought in from many states would be closer at hand. So it wouldn't stay fresh as long in the refrigerator at home.

Nearby milk supplies are more reliable, too, in times of harsh weather and other factors that can disrupt supply lines.

"In the long run, it's clearly better for shoppers to get fluid milk from dairies close-by," Thomas said.

Dan Rahn is a news editor with the University of Georgia College of Agricultural and Environmental Sciences.