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New York Dairy Plant Closes Its Doors
August 3, 2016

Henry Schwartz remembers going to the 1939 World’s Fair, where crowds that had oohed and aahed at the Trylon and Perisphere watched his grandmother demonstrate how to milk a cow. She also gave talks on how to run a dairy.

Mr. Schwartz, who was 5 years old, must have paid attention. He grew up to run a dairy — in fact, a descendant of the very one his grandmother talked about managing.

Now, at 82, he is shutting down the shiny, sprawling Elmhurst Dairy plant in Jamaica, Queens, long a vital pit stop on the way from milking barn to milk mustache.

The operation was no longer profitable, Mr. Schwartz said. He also said the shutdown rated a footnote in history. For the first time since the city was called New Amsterdam, no one will put milk in packages within the city limits, “even if they were cans back when the Dutch were here,” he said. “Now it’s going to come from out of town.”

The cows have long since gone home — they have not been anywhere near the Jamaica plant for years. The closing on Oct. 30 will put 273 people out of work, and one consumer analyst who follows the dairy industry said the price of milk in New York City could rise by a nickel per quart. Elmhurst said it had been producing more than 5.6 million quarts a week.

Elmhurst also said it had been packaging milk for Bartlett Dairy, a distributor that supplies city schools. Elmhurst’s contract with Bartlett Dairy is ending, and Bruce Krupke, executive vice president of the Northeast Dairy Foods Association, said Bartlett was hunting for dairy factories to fill the gap that the Elmhurst shutdown will create.

“Bartlett is looking for processing capacity in plants upstate,” he said, because plants closer to the city that can handle half-pint cartons for schools cannot take on additional orders. A call to Bartlett, which operates out of the Elmhurst plant in Queens, was not returned.

The shutdown reflects trends in the milk business, which has been buffeted as big-box stores changed consumers’ buying habits and concern about fat and cholesterol changed their beverage habits. Andrew Novakovic, a professor of agricultural economics at Cornell University, said milk consumption peaked in the late 1940s and has declined sharply in the last few years, to about 120 pounds per person in 2015 from about 240 pounds per person in 2010.

Mr. Schwartz said the decision to close the plant was an emotional one. He said he had worked to keep the plant open “long past the years that it was economically viable.”

“The family did so at a very high cost,” Mr. Schwartz said, “but is unable to continue to do so without ongoing losses.”

The family owns other companies, including Steuben Foods of Elma, N.Y., near Buffalo. Steuben makes dairy and nondairy items that have longer shelf lives than milk — a drink called Banana Water, for example. The company was looking at other uses for the plant’s 16-acre site in Queens, such as a hotel or an entertainment complex, Mr. Schwartz said.

He traced Elmhurst Dairy’s roots to his father and uncle in the milk house of their father’s farm, on Caldwell Avenue in Elmhurst. During the Depression, they moved to Jamaica, and eventually joined forces with their brother-in-law. He ran a dairy farm in nearby Middle Village that had 200 cows.

By World War II, milk trucks with horsepower had pretty much replaced milk wagons with horse power; in 1947, the Borden Company hired a milkman for a stunt that involved delivering its mascot, Elsie the Cow, to the ballroom of the Waldorf Astoria hotel. And supermarkets caught on in the 1950s, undermining the door-to-door-delivery business model.

“Pasteurized fluid milk has sort of gone out of style,” Mr. Schwartz said. “There isn’t much room for our kind of a plant. I tried to keep this open because it was my father’s plant and he asked me to do so.”

New York State deregulated milk sales in 1987 after a federal court invalidated a “destructive competition” provision in state law that officials had used to block a New Jersey dairy from selling milk throughout the city. The State Legislature revised the law and a price war broke out.

“That was the beginning of the end,” Mr. Schwartz said before running through a long list of dairy plants that had closed.

From 2003 to 2011, Elmhurst Dairy had a deal to supply milk to Bartlett for distribution to Starbucks stores in the city. Mr. Schwartz said he had put $14 million into expanding and improving the plant before that deal ended.

“I don’t want to blame anybody like Starbucks,” he said. “If it were a healthy industry, then I don’t think any one thing could destroy our company. It’s a whole bunch of things. It’s the times.”

Burt P. Flickinger III, the managing director of Strategic Resource Group, a consumer-industry consulting firm, said the Elmhurst shutdown was likely to mean higher milk prices for consumers.

The loss of Elmhurst’s capacity “makes the market much less competitive in terms of milk prices,” he said, “and it’s tough because Elmhurst was one of the last bastions of good unionized jobs and good living wages.”

Source – The New York Times


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