July 31, 2006

USDA study finds extensive changes in US dairy industry
 

A USDA's Economic Research Service study finds that while the number of dairy cows in the US have declined 16.5 percent over the past 25 years while the number of dairy farms have fallen by a steep 75 percent. 

That means cows-per-farm now is triple what it was in 1980, up from an average of 32 head then to 111 head today.

However, milk production per cow has increased by 60 percent since 1980 and total US milk production has been up a third since then, to nearly 171 billion pounds each year.

Meanwhile, per-capita consumption of dairy products have been rising by 0.4 percent a year since 1995, with most of that growth coming from cheese consumption. The increased consumption meant that dairy demand could become more sensitive to economic conditions than in the past.

The ERS study notes milk production has shifted to the Western US since 1980, with large operations in California, Washington State and Idaho. Producers in the upper Midwest are also moving toward larger operations, while environmental issues are limiting further dairy industry growth in the far West.

These changes meant that milk production could rebound in the upper Midwest over time. The study also noted that dairy production declines in the south-eastern US are not likely to be reversed in the forseeable future.