One of the issues is that Walmart opened a new dairy plant here in Indiana which considerably increased milk processing capabilities for the region, as a result companies like Dean Foods had to turn around and cancel contracts with farmers in Indiana, Ohio, Pennsylvania, New York, Kentucky, Tennessee, North Carolina and South Carolina.
That allowed Walmart to gobble up the best of those farms (30 something farms between Indiana and Michigan), for cheaper. Given that they're processing, bottling, and distributing it to their own stores let's them sell it cheaper too, which then makes companies like Dean Foods lost contracts and now suddenly have pretty stiff competition.
Walmart didn't replace all of those contracts Dean cancelled (and I imagine other processors/distributors too) which really hurts the small guys that have 50, 100, 200 cows.
Keep in mind a cow is only good for 6-7 gallons a day, so these smaller farms just aren't worth it for a massive company like Walmart. Within 2 hours or so of the plant they're servicing close to a thousand stores (if not more once you include the grocery-only ones) so those smaller farms basically end up screwed with no one to sell that milk to.
It's not like you can just go "ok we'll let's butcher some of those cows and make some money while we figure something else out" either because, dairy cows are generally older and only good for ground beef and really cheap cuts. Even with a beef cow you're only going to get $700 or so.
At 25lbs~ of dry weight food a day per cow, you might get a little over a year of hay for one dairy cow sold for ground beef - basically those contracts getting cancelled just kill the small dairy farmers.