Low milk prices may spur more consolidation of Pa. dairy farms

2
7

UNIVERSITY PARK, Pa. — Even though Idaho recently surpassed Pennsylvania as the fourth largest dairy state in the country — behind California, Wisconsin and New York — the dairy industry is still huge and thriving in the Keystone State.

But that could change.

Chad Dechow, associate professor of dairy cattle genetics at Penn State, the face of dairying in Pennsylvania may face rapid change, as a long period of low milk prices could accelerate dairy-farm consolidation.

The numbers.

The commonwealth supports more than 7,400 dairy operations, according to the Pa. Department of Agriculture, most of which have herds of 30 to 99 cows.

Collectively, the state’s dairy farms house 540,000 milk cows, and one cow has an annual economic impact of nearly $14,000, according to the Center for Dairy Excellence.

Land crunch.

Dechow said the dairy industry in Pennsylvania, which provides 40,000 jobs, has less room for expansion than in many Western states because potential dairy farm land in the state is more expensive and harder to obtain in large tracts.

In Western states, 5,000-cow dairies are commonplace. That’s the main reason Idaho recently surpassed Pennsylvania as the fourth largest dairy state in the union and may soon surpass New York as the third largest.

Headed to consolidation?

Dechow sees the United States dairy industry migrating more toward the hog industry model.

A sizable contingent of small farms that can produce milk cheaply, rely on nonfarm income sources, or incorporate a niche market will remain. The majority of milk, however, will be produced by a limited number of very large operations with several thousand or more cows spread across “satellite dairies.”

“We are likely to see fewer single-site, large-family dairies,” he said. “Much of this consolidation in Pennsylvania will come from large family dairy farms that continue to grow, and some operators may come from Western dairies that purchase satellite dairies farther east.”

Hit by economy.

“Unfortunately, some 1,000-cow operations that would have been considered sizable just a short time ago have gone bankrupt due to low farm milk prices,” Dechow said.

“Extremely large Western dairies have purchased many of those farms in the West to run as satellite locations and are poised to push eastward.”

Current dairy industry expansion is minimal, as the number of dairy animals in the United States remains flat, and the national herd is 170,000 animals smaller than last year. Despite this decrease in the number of animals, dairy farms produced 20 million gallons more milk this May than they did in May 2009, according to the USDA.

Potential niche.

“Pennsylvania dairies have the potential to be shielded from the national trend to some extent,” said Dechow. “Consumers want to support family dairy farmers who take care of their cows, and nobody produces milk closer to the way consumers would like it to be produced than Pennsylvania’s dairy farmers.

“For Pennsylvania’s dairy industry to thrive and remain one of the largest in the country, the industry must do a better job of connecting with consumers and return a larger proportion of the retail milk price to the types of farms consumers want to support.”

STAY INFORMED. SIGN UP!

Up-to-date agriculture news in your inbox!

2 COMMENTS

  1. I find it so sad why states are not into subsidizing the small and medium sized farms which add such a positive image to the states rather than the industrial farms which do not.
    Noting the number of industrial dairies going bankrupt. I would think this is the road which should be taken. Perhaps Farm Bureau will change and support this type of program which puts the farmer back on the farm and gets rid of the illegals which so many of the industrial farms employ.

    A good road for everyone to take.

  2. If Pennsylvania is, indeed, losing it’s standing as 4th largest dairy state to Idaho, I think we need to look at the reasons for that. One of those reasons appears to be that Idaho is prepared to cheat in order to gain that standing. Check out the Idaho “Ag-Gag” bill, which would prevent watchdog groups and animal rights groups from photographing and otherwise transmitting purported animal cruelty at Idaho dairy farms. How true these allegations are, needs to be thoroughly investigated. Their Ag-Gag bill, which has passed Idaho’s state senate and their agriculture committee, is reportedly on it’s way to their state house of representatives, and if so, it needs to be stopped. All other aspects of the issue aside, Pennsylvania should not be losing ground because another state chooses to use practices that cost or cause suffering to dairy animals in order to advance their standing. I, for one, want to know how much, if any, Idaho dairy product comes into our state, and what the brands are. Then, this Ag-Gag bill passes their state house, and is signed by their governor, I will know what not to buy.

LEAVE A REPLY

We are glad you have chosen to leave a comment. Please keep in mind that comments are moderated according to our comment policy.

Receive emails as this discussion progresses.