Iowa’s Dairy Industry Faces Challenges From Supply Chain Disruptions

Doug Stensland can’t always trust that the semi-trucks filled with the supplies he needs to run his family dairy farm and processing plant in Larchwood will show up on time.

After one truck carrying milk jugs arrived a little late, Stensland said he shifted how he runs his operations.

“After that it was like ‘Boy we have to keep everything ordered way ahead,’” Stensland said. “We used to be able to order and keep a real lean inventory, but now we’ve gotten to a point where we have to stock up a lot of inventory just to make sure we don’t order it and it’s not available.”

Nationwide supply chain disruptions have impacted businesses across the country -- and Iowa’s dairy industry is no exception. Transportation and logistics issues have touched all levels of dairy production, from local farmers to large dairy exporters.

In most cases, agriculture economist for Iowa State University Chad Hart said supply isn’t the major issue. The problem is connecting the supply to the demand, and the chain link between many products has been disrupted.

“If the feed additive is in China, but the need for it is here in an Iowa dairy herd, then that doesn’t help you, unless you can deliver it where it’s needed,” Hart said.

On the local level, farmers are facing obstacles in receiving the tools they need to continue business. At Milk Unlimited Dairy, a farm in Atlantic with 34,000 cows, owner Christy Cunningham said the first shortage she noticed was in personal protection equipment used for milking cows at the start of the pandemic.

“Not only were we not able to get them, but when we were, the inflation of the price was enough to make you take notice,” Cunningham said.

Now, equipment like dry tubes, ear tags, feed additives and packaging for milk products are more difficult to stock and require a lot more planning. Between shortages and rising prices, Stensland said the last two years have been very hard for his business.

“Everything’s gone up,” Stensland said. “It’s cut into profits, there's no doubt about it. It's just a matter of how far we can be able to grab that back. Our sales are tough anyway.