In 2013 more US dairy farmers left the business than in any year since 2007.  For an industry that has seen almost 64% percent of its members leave in the span of one generation, these are not positive stats.  Continued high feed costs, despite high milk prices, have seen margins get tighter and tighter causing over 2,321 dairy farmers to leave dairying in the last year alone.

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TABLE 1: Licensed U.S. Dairy Farms & Average Herd Size by year

Of the 84,549 dairies that left the industry in the past 22 years, the majority did so between 1992 and 2002.  Regardless that does not negate the fact that since 2003 the decline every year has been at least 3.3%.

How the West Was Won

TABLE 2 Regional Herds, Cows and Herd Size Since 1992

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Despite the reduction in the  number of dairy farmers, national cattle numbers actually held seeing only a 0.1% reduction to 9.221 million cows.,  Production actually increased slightly (0.3%) to 201.2 billion pounds.  However, that is the slowest rate of production growth recorded in the past 5 years.

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An obvious trend over the past 22 years is the significant growth in herd sizes.  The national average herd size has risen from 74 cows per herd in 1992 to 167 cows in 2013.  The biggest change in herd size has occurred in the West where there has been a 58% increase to 279 cows per herd.  In fact that average herd size in the West is more than 5 times the size of the herds in the other regions.

The Story by State

TABLE 3 Dairy Farm Numbers by State

Figure 4 Herds by State Heat Map 2013

The greatest percentage of declines has occurred in the Southeast region (6.5% decline), and the greatest total decrease occurred in the Midwest (1,755).  The only state to actually show an increase was Pennsylvania that had a 60 herd (0.8%) increase in 2013.

TABLE 4 Total Milk Production by State 2013

Figure 5 Total Milk Production by State 2013

Figure 6 Production per Herd – By State 2013

Table 5 Dairy Cattle Population by State 2013

Figure 7 Dairy Cattle Population by State 2013

Figure 8 Herd Size by State 2013

Figure 9 Production per Cow by State 2013

Table  6 Top States 2013 by Milk Production Efficiency

Figure 10 Top States 2013 by Milk Production Efficiency

In evaluating which states are doing the best you can look at which states have the most production (i.e. California, Wisconsin & New York), or you can look at which states have the most producers (i.e.  Wisconsin, Pennsylvania and New York).We prefer to rank by which states are producing the most milk per cow from the most efficient herds.  Using that ranking  we see the following top 10: New Mexico; Arizona; Nevada; California; Colorado; Idaho; Texas; Washington; Florida; Utah).  It is interesting to note that all of these herds are located in the West except for Florida and that Wisconsin, despite having the most producers and the most cattle, falls to #23 in the rankings for milk production efficiency.

How Does Canada Compare?

Table 7 – Canadian Statistics

*Rankings are where each province would rank in the U.S.

Some interesting stats present themselves when we compare Canada to the U.S.

For example:

• All of Canada has about the same number of herds as Wisconsin and Missouri combined
• Both Wisconsin and California have more cattle each than all of Canada
• More milk is produced in each of Wisconsin and California than in all of Canada
• The average Canadian herd is about 60% smaller than the average herd in the U.S.
• The average US cow produces about 5% more milk than the average Canadian cow.  (21,807 lbs vs 20,712 lbs)

The Bullvine Bottom Line

While there are certainly drastic differences in operation size across the different regions in the USA, the trends seem to be the same.  The number of dairy farmers is getting smaller and smaller and production is increasing at a slower rate than that of the U.S. population.  Continued increasing feed costs and decreased margins are only going to cause more producers to leave the US industry.  Since 2009 a perfect storm of plummeting milk prices and high feed costs have combined to push dairy margins to the brink.  Thousands have been forced out of business and many of those who survived are now deeply in debt.  Nationwide, dairy farmers lost $20 billion in net equity between 2007 and 2009.

Increasing global dairy marketplace competition and a US milk price that, although at a record high, remains lower than prices in Canada, China, Australia and New Zealand is driving producers out of the industry.  Unless more is done to protect dairy margins, these alarming trends are going to continue.  The day is coming in the United States when there will be very few milk producers left.  Is the US dairy industry coming to an end or a turning point?

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