2Bits: Bessie, the milk cow–Walmart owned?
“Where does milk come from?” How soon will kids say, “Walmart” and mean it?
Time will tell.
It’s A Grand Opening!
Where? Fort Wayne, IN. When? Wednesday, June 13th. Grand opening for what? Walmart’s new milk processing plant.
Indiana provided some nice incentives.
$2.9 million in tax credits
$850K in conditional tax incentives tied to hiring plans
$10.7 million tax abatements over the next 10 years
There are winners and losers.
Winners: The new processing plant will employ 200 people at $19 per hour. In addition to that, the plant will contract with at least 100 truck drivers.
Losers: Dean Foods’, a milk supplier for Walmart, lost business due to the Fort Wayne plant, led them to notify more than 100 dairy farmers in 8 states that their milk contracts were being cancelled.
Grocery giants, Kroger and Albertsons have already opened milk processing facilities. These processing facilities are also designed to be capable of shifting to make other beverages should the demand and price for liquid milk products decline. What other food and drink processing will these grocery giants bring in-house? Time will tell.
Walmart’s Fort Wayne milk processing plant will deliver milk to almost 500 Walmart stores. If this plant successfully reduces costs for Walmart, where will the next plant be located?
When will robotics run the milk processing plant?
We think Walmart, Kroger, and Albertson are watching and learning from Japan. Due to a labor shortage, Japan is moving forward with using robotics in their milking parlors. Robotics in their milk processing plants would be another way to also reduce labor needs and lower processing costs.
How soon, will Walmart, Kroger, and Albertson follow Japan’s push to incorporate robotics in their milk supply chain? Time will tell.
Walmart farms? “Sure,” we’ve said it before, it’s all about supply chain control.
So where does this leave the American farmer? Will they become hired hands on corporate-owned farms? Share-croppers? Time will tell.
Food supply chain control is about costs.
Global grocers’ face strong competition and low profit margins. The move deeper into food supply chains improves processes and lower costs:
Uniform produce and farm products enable consistent handling practices.
Transparency from plant or animal to plate improves safety.
Streamlined delivery logistics shortens transportation time.
The end-result of this?
Your customers’ expectations of locally-raised food will eventually be impacted. Walmart farms may fit the category of “locally-raised.” And, Walmart will be hi-tech, convenient and low-priced. Small and mid-sized farmers will see a reduced customer base. This makes it harder for farmers to have a sustainable farm-based income.
Join 2BuyAg’s online marketplace today! Keep real local food buying from family-owned farms strong! Tell your customers how they can conveniently order online from you through 2BuyAg. Offer them the opportunity to connect and buy from you on 2BuyAg!