The changing landscape of U.S. milk production


WASHINGTON – The dairy industry underwent dramatic restructuring in the last 50 years.

A 1997 USDA report, The Structure of Dairy Markets: Past, Present, Future, described selected dairy product markets, firms in the markets, and changes in the markets and firms from 1975 to 1999. This report provides a similar examination of milk production.

Slow evolution. Structural changes in milk production are a result of long-term evolutionary processes such as adoption of technological innovations, changes in the production system, and specialization, according to USDA economist Don Blayney. The key features of milk production examined in a report Blayney recently authored are the quantity of milk produced, and the location, number, size, and business organization of dairy farms.

Total U.S. milk production in 2000 was about 1,677 billion pounds, about 45 percent more than in 1975. Milk was produced in every state, but long-term milk production growth in California and more recent production growth elsewhere (for instance, southern Idaho, eastern New Mexico, eastern Washington State, and southwestern Kansas) changed the landscape of production.

The number of farms with milk cows as well as the number of specialized dairy farms declined dramatically, while the herd size grew.

Still family dominated. The noticeable changes in the number and size of dairy farms were not matched by any major changes in business organization (ownership). Commercial dairy farms continue to be owned and operated mainly by individuals and families.

Regional milk production shares generally were unchanged over the 1975-2000 period, with the Mountain and Pacific shares growing, while the remaining regional shares were relatively unchanged or at best increasing slowly.

Where are the cows? Most dairy farms were still located in the traditional regions (Northeast, Lake States, and Corn Belt), Blayney said. In an industry with a great increase in milk output per animal, however, a more important regional issue is the location of the cows.

A general decline in the shares of the milking cow herd (or at best a slow growth) describes all regions except the Southern Plains, Mountain, and Pacific. Marked differences in milk production per cow between western regions and the rest of the country have emerged since the mid-1980s.

Individual or family dairy farm ownership dominates in all regions and, if partnerships (many likely involving family members) are included, the share in the two categories jumped to well over 90 percent in every region.

Factory farming debate. Today’s production structure is the foundation for future milk production.

As the 20th century ended, concentration and industrialization of agricultural industries became widely debated topics. Dairy farming is more industrialized today than previously, and prospects for the continuation of that process exist but are not totally unconstrained.

Environmental concerns are increasing since several key milk-producing areas are in environmentally sensitive locations. Milk production concentrated in particular geographic areas may be disrupted by adverse weather conditions, such as EI Nino or the severe cold weather in upstate New York in early 2000.

The importance of larger dairy operations and the continued use of many different milk production systems are likely to continue into the foreseeable future – trends suggesting structural change in the dairy industry will remain a topic of interest.


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