State of the Dairy Industry

Navigate the Unpredictable Waters of the Year Ahead

Thu, 05 Jun 2025 14:43:49 GMT

Global Dairy Dynamics

Strong pricing in Europe and New Zealand created openings for U.S. dairy products to move out of the country without requiring significant downward price movement. Cheese exports increased by 22 million pounds in January and February, up 16%. Meanwhile, in the first quarter, CME spot block cheddar prices averaged $1.81 per pound, up 20% from the same period last year. That’s a win. The butter story has similarities. Exports increased by more than 8 million pounds in January and February, an 84% increase. CME spot prices were lower in the first quarter but not in a devastating fashion.

Prevailing price gaps favor more movement in the months ahead, with U.S. cheese and butter trading at large enough discounts to keep the purchase orders rolling.

Potential Trade War Tensions

An unfolding trade war potentially complicates things, of course. We don’t know how the story will end. Mexico is the pivotal player for cheese and nonfat dry milk. If things don’t get ugly, that will go a long way toward steadying the price boat. South Korea and Japan are also important players in the cheese arena. China looks like it’s going to be a sore spot, with major implications for the U.S. whey complex. A significant portion of U.S. whey, permeate and lactose exports move into China. If tariffs remain high, market prices could struggle, dinging other solids values in U.S. producer milk checks.

A Cautious Approach to Heifer Demand

The other big story for 2025 (and beyond) also features many moving pieces and unknowns. When will we begin to see replacement heifer availability turnaround? Beef-on-dairy breeding has become so widespread that we’ve run down dairy heifer inventories. At face value, the incentives continue to point in that direction. High beef prices and low cattle numbers keep pushing up the value for day-old dairy cross beef calves. The bird in hand, a $900 check for a day-old animal, sure seems to be more appealing than the two in the bush.

Yet, we wonder if more producers are starting to zag while everyone else is zigging? Are they backing off beef on dairy to ensure their ability to grow their own operations? Are some shifting breeding even a little, betting the potential rewards for raising dairy heifers are worth the risks?

The conversation is as fascinating as it is consequential, but it will be some time before we know if, and how much, the trend is shifting.

This is the 2025 dairy industry. Short on certainty. Long on volatility. Sharp management is more crucial than ever.

A Promising Horizon for U.S. Dairy

Tue, 27 May 2025 17:12:38 GMT

Editor’s Note: This is one article in a series that is included in the 2025 Farm Journal’s State of the Dairy Industry report. The full 16-page report will appear in the May/June issues of Dairy Herd Management and Milk Business Quarterly and will be published in this space over the next several weeks. To download the full report for free click here.
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Farm Journal’s State of the Dairy Industry 2025 report provides a comprehensive overview of the current state and outlook of the dairy industry. The report surveyed 400 dairy producers across the U.S., focusing on those with cow herds that exceed 100 cows. The survey aimed to understand producers’ future plans, the challenges they face and their overall sentiment toward the industry.

The results of the survey have revealed an air of optimism among dairy operators. The biggest takeaway was their increased confidence as compared to a year ago. Financial and attitudinal indicators suggest a positive trend, with producers generally anticipating more profits this year compared to last. Furthermore, there is an increased consensus among surveyed producers that they hold an optimistic view for the future of the industry. Many are confident about the milk market’s potential as well.

The Road Ahead

While the path forward is not without its challenges, it seems that the dairy industry is preparing to tackle these with a renewed sense of optimism. The sentiments captured in the survey indicate that operators are adapting and planning strategically for continued success.

This survey followed a similar format to that of the 2024 report, allowing for comparison and identification of trends over the past year. The purpose was to understand not only the current challenges but also the direction in which the industry is headed.

As the industry continues to navigate through its current challenges, producers continue to embrace innovative practices and unlock further opportunities for growth. There is a promising horizon ahead for the dairy industry, and if these trends continue, it could lead to a more sustainable and prosperous future.

Farm Journal’s State of the Dairy Industry 2025 report underscores the resilience and the adaptability of dairy producers, further strengthening the industry’s foundation for the years to come.

(Farm Journal)

An Incredible Bird's-Eye Look at the State of the Dairy Industry

Tue, 20 May 2025 15:13:13 GMT

Technology Integration

In an era where technology permeates nearly every aspect of life, the dairy industry stands at the forefront of this transformative wave. The integration of technology is no longer just an option; it has become a crucial step toward creating a more efficient and sustainable dairy industry. From feeding systems to health monitoring devices, technology helps dairy farmers optimize operations and ensure animal welfare.

A recent survey highlights a significant shift in the adoption of technology within the dairy sector. Remarkably, two-thirds of dairies now use at least one form of feeding technology. These innovations are designed to streamline the feeding process, providing precise nutrient delivery to livestock and reducing waste. The result is a noticeable improvement in both efficiency and sustainability.

Diversifying Revenue Streams

In today’s changing economic landscape, many dairy producers are finding innovative ways to sustain and grow their businesses. The key to survival during these turbulent times seems to be diversification.

Farm Journal’s recent survey reveals approximately one-quarter of dairy producers have embraced alternative land or dairy add-on revenue streams. This shift underscores the industry’s agility and adaptability as producers look for various avenues to boost profitability.

One strategy gaining traction is the beef-on-dairy operation. An impressive three-quarters of operators are now involved in at least one beef-on-dairy practice, with breeding and raising being the most common methods. Though there has been a decline in the number of producers raising animals under their beef-on-dairy operations over the past year, there is a notable increase in the sale of branded beef products. This shift highlights the evolving dynamics within the industry as producers adapt to market demands.

Next-Gen Transfers

A significant concern facing the industry today is the impending wave of retirements among dairy operators, many of whom have not established formal succession plans. This situation is becoming increasingly urgent, with surveys indicating that a quarter of these operators intend to retire within the next five years.

Contrary to the retirement trend, there is also a strong movement toward growth and expansion within the industry. Almost half of the operators express a desire to expand their operations in the near future. Such ambition suggests confidence in the industry’s potential and reflects a proactive approach to ensuring a sustainable future. At the same time, an equivalent number of operators are planning to maintain their current herd sizes, indicating a focus on maximizing efficiency and resource management.

Sustainability Program Awareness

Farm Journal’s recent survey reveals an array of insights regarding current sustainability practices and the prevailing awareness surrounding them. While the inclination toward adopting sustainable practices is reassuring, a deficiency in program awareness raises concerns that need to be addressed.

Encouragingly, over half of survey respondents (63%) reported participating in at least one sustainable practice. This trend is indicative of a growing societal shift toward environmental responsibility. Interestingly, larger operations, particularly those with substantial herd sizes and extensive acreage, tend to embrace sustainability more comprehensively. This trend is most pronounced in the Western region.

Reality of Workforce Shortages

A recent survey highlights the growing dependency of the dairy industry on non-family labor. For many respondents, non-family members consist of at least 50% of their workforce. This shift is indicative of broader changes within the industry as traditional family-run farms adapt to meet growing demands. However, hiring and retaining workers continues to be significant challenges. With evolving labor-related aspects indicating enduring challenges, the industry must explore viable solutions to continue thriving.

Despite the adoption of new technologies, the challenges of hiring and retaining a reliable workforce remain. Farmers must continue to balance the integration of technology with human labor, ensuring that both aspects work in harmony to drive growth and productivity. These changes suggest a long-term shift in how labor is approached, maintaining traditional farming values while embracing modern advancements.

Optimistic Horizon

The dairy sector is witnessing renewed confidence, energized by innovative strategies and fueled by a younger generation of forward-thinking dairy operators ready to embrace change. Their willingness to adopt advanced technologies and improved herd management techniques is reshaping the landscape of dairy farming. By integrating strategic solutions, these operators are setting a new standard that promises to uplift the entire industry.

According to surveys, 44% of producers plan to expand their operations in the next five years. This drive to scale indicates a strong belief in the trajectory of the dairy industry and its ability to thrive amid changing global dynamics.

The 2025 Farm Journal State of the Dairy Industry Report is available for download here .

Unveiling a Glimpse into Dairy's Future

Sat, 27 Jul 2024 18:02:38 GMT

Over the last decade the dairy industry has changed at lightning speed, and it has dramatically changed from the era of hand milking cows one-by-one. From the adaptation of technology to increasing efficiencies and overcoming challenges that seem to come at a fast pace, dairy producers have rolled up their sleeves and leaned forward to embrace opportunities to advance their farms, while tackling the non-stop challenges that face the industry.

Michael Dykes, CEO of International Dairy Foods Association (IDFA), shared at the Dairy Forum in Phoenix earlier this year that our industry has a growth mindset.

“Our farmers want to grow and so do our processors. If we aren’t growing, if we aren’t looking towards the future, we’re going to get surpassed by others,” he says, sharing that 60% of the processing executives have expressed optimism for 2024 and 73% plan to increase their investments over the next 3 to 5 years.

Phil Plourd, president of Ever.Ag Insights offers a different perspective, saying that his back-of-the-envelope math shows today’s interest costs on building a 6,000-cow dairy are running about 60 cents per hundredweight above 2021 levels. Plourd says, “that could limit producer’s expansionary appetites.”

Still, the trendline illustrates the continual migration of dairy herds from coastal areas coming inland. States like South Dakota are skyrocketing with growth. In January 2024, the United States Department of Agriculture (USDA) announced that the total number of dairy cows in South Dakota totals 208,000, up 70.5% since 2019. To put that into perspective, South Dakota’s dairy herd has added 118,000 cows over the past 12 years.

Evan Grong, sales manager for Valley Queen, says three main factors attract producers to South Dakota.

“We attribute the current and projected growth in the I-29 region primarily to access to feed production, abundant groundwater and dairy processing investments,” he explains.

Other states are not fairing so well mainly because of environmental regulations and rising labor costs. This is one reason dairy producer David Lemstra moved from California’s Central Valley to South Dakota four years ago. Lemstra, who milks 4,000 cows near Sioux Falls, concurs with Grong, saying three things led him to call South Dakota home—feed, permits and processing. Although he adds that California political management played a factor in their decision to move east.

“It’s not one blow that took us out of California,” Lemstra says. “It was death by 1,000 cuts.”

With more than $7 billion in planned processing investments in the pipeline with much of that popping up in the midsection of the country, indeed, major future growth will come to states like South Dakota and Texas. For example, South Dakota processor, Agropur, increased its capacity by 2 million lbs. in 2023 and Valley Queen is adding 3 million lbs. to its daily processing that will be finished later this year. In Texas, Panhandle Products increased its processing capacity by 4 million lbs. in 2023 and Leprino Foods is expected to finish construction to add 8 million lbs. Similar, Hilmar Cheese is expected to finish construction on a green site facility in Dodge City, Kan., for 8 million lbs. later this year. Grocery giant, Walmart announced new milk processing plants to open with one in Valdosta, Ga., expected to open in 2025 and another in Robinson, Texas, with plans to become operational in 2026.

Back on the farm front, lackluster mailbox prices delivered early in 2024 has forcing dairy producers to find a way keep their legs beneath them. Still, many producers across the county have their eyes wide open to the future and are eagerly embracing opportunities to grow any way they can.

The largest dairy cooperative, Dairy Farmers of America (DFA), shared that they conducted a member-survey that illustrates that by 2030 they are anticipating only having 5,100 member farms. Corey Gillins, chief milk marketing officer with DFA, shared that this is a drastic drop from their current membership of nearly 11,000 member-owner farms. Gillins noted at DFA’s annual meeting in Kansas City in mid-March that more than 500 of their member farms exited the industry in 2023.

Survey Results
Following is our State of the Dairy Industry report where Farm Journal surveyed 210 dairy producers throughout the U.S. who range from 100 to 20,000-cow herd size. Our forward-thinking survey asked participants about challenges that face them, along with opportunities. We asked what growth looks like for their dairies and ultimately what do they envision their operations to look like in the next 5-7 years. We are proud to present to you the 2024 Farm Journal State of the Dairy Industry report that shares several insights of what’s to come in the years ahead.

One clear insight documented is that U.S. producers are feeling the mountain of challenges that face them—from labor issues to regulatory pressures, to the overall economic hurdles of running a dairy farm. Despite all of that, the outlook from dairy producers appears to be promising. More than two-thirds of dairies reported 5-year profitability, and more than half have a growth mindset with plans to grow in one way or another in the next five years. More than a third of the survey respondents shared that they plan to grow by increasing cow numbers or adding new sites, while others will invest in on-farm revenue streams or upgrade their facilities to increase cow comfort and production.

Several Challenges
Respondents also shared that milk’s volatile pay price was a constant headache as it emerged as a top concern for nearly a third of respondents. Additional top concerns for producers included instability, lack of experience and the overall rising cost of inputs.

2024 has caused dairies to face low milk prices and uncertainty, both of which make it hard to meet their farm’s individual goals. When you factor in high inflation and labor challenges, especially when it comes to retention, it challenges those producers who want to grow their business in one way or another. Some dairies who expressed the desire to expand said they are unable to do so because of being landlocked or priced out of the land market. Other dairies, some small, said their size hurts them. One respondent shared, “We are small compared to the bigger dairies and most of the bigger ones are closer to the processing plants and vertically integrated, while we are not.”

Next Five Years
The next five years will bring significant measured change to the industry. Suppliers and dairy stakeholders can anticipate that dairy operations will continue to disperse. Likely these are the smallest operations by cow count; those that own little acreage and do not produce much of their own feed. Smaller operations that still report a willingness to change, by adding new revenue streams or expanding, are likely to stay in business. Economies of scale are evident in this report— as larger operations, those having multiple sites, owning more land and growing more of their own feed—are more likely to be profitable. And those that are more profitable are also more likely to grow and expand in the coming years.

Top challenges documented by dairies include a lack of succession planning, difficulty accessing permits, and challenges when it comes to accessing needed financing.

When it comes to advancing dairy operations, producers certainly have leaned forward into implementing technology to help drive their operation’s overall efficiencies over the past several years. And as producers look to the future, they remain confident that technology will continue to advance in helping their dairies. Between 24-32% of our surveyors shared that they tend to invest across at least five areas of technological focus in the coming years.

Profitability/Success
While there certainly is no cookie-cutter answer to what equates profitability and general success, our survey indicated that those that were more likely to be profitable were operations with:

· Large cow count, having 5,000+ head of cows.

· More likely to have 5+ sites in the operation.

· More likely to own 1,000 or more acres of land.

Conclusion
Farm Journal respondents not only recognized the mountain of challenges that our industry faces, but also embraced opportunities on the horizon that would help advance their dairies forward. An increasing number of dairies are looking to diversification, whether that be on-farm processing, beef-on-dairy, agritourism, crop production and income from renewable energy, to provide additional revenue streams to help with razor tight financial margins that many are currently experiencing.

Overall, dairies will continue to grow larger, diversify, grow their own feed or have access to purchase feed and lean into technology to not only help advance their business forward, but to provide longevity to push them to the next decade.

Click here to download the full 2024 Farm Journal State of the Dairy Industry Report
State of the Dairy Industry | Dairy Herd

Ben and Jerry’s Is Set On Proving Dairy Can Help Solve Climate Change

Thu, 27 Jun 2024 18:44:21 GMT

Scroll through the various nuggets of news and informational tidbits on Ben & Jerry’s website, and you’ll find a sentence that sums up one of the company’s core values: “We love making ice cream – but using our business to make the world a better place gives our work its meaning.”

The iconic company is known for its proactive work on a wide range of social justice issues. Specific to its dairy supply, Ben & Jerry’s established its Caring Dairy program in Europe in 2006 and in the U.S. in 2011.

Through the Caring Dairy program, participating farms have implemented innovative solutions that drive thriving livelihoods for farmers and farmworkers, provide excellent animal welfare and build soil health through regenerative practices.

Two years ago, the company launched a Low Carbon Dairy pilot project to expedite the adoption and trialing of climate-friendly practices and hired Rebecca Manning as its project coordinator.

Focus On The Farms

The northwest Vermont farm girl didn’t travel far when she left her family’s dairy operation in Franklin County – where she served as a herdsman for 15 years – and joined Ben & Jerry’s at its corporate headquarters, roughly an hour from home, in South Burlington. There, she works with the seven U.S. Low Carbon Dairy farms under the auspices of the company’s overarching Caring Dairy program to address each farm’s carbon footprint.

As part of the process, the company has taken measurements based on units of CO₂e (carbon dioxide equivalent) per kilogram of fat-protein corrected milk, to benchmark each farm’s carbon footprint.

“That has been very important for our farms to be able to use as a driver to decrease their footprint,” Manning says.

Initially, Manning says when she started her new role at the company, she wondered why Ben & Jerry’s decided to focus on dairy farms’ carbon footprints rather than some other aspect of the business.

“I probably thought, maybe like some of the farmers we work with, ‘Why don’t they focus on their plants and look at manufacturing, that that’s where a huge part of the footprint comes from.’ But I learned that’s not true,” she says.

Instead, 75% of the company’s total carbon footprint is made up of ice cream ingredients and product packaging.

“Manufacturing is actually a very small piece of the total footprint,” she says.

But the company doesn’t buy into the premise that animal agriculture, and dairy specifically, is inherently bad for the environment. Instead, the company is flipping the script on the environmental myths often portrayed in media.

“Ben & Jerry’s wants to demonstrate that dairy can be part of the solution to climate change,” Manning says. “That’s what we’re trying to do with the Low Carbon Dairy project.”

An Ambitious Goal

The multi-year Low Carbon Dairy project – under the auspices of the company’s Caring Dairy Program – takes a whole-farm approach to addressing GHG emissions, using seven intervention categories: enteric, regenerative agriculture, nutritious homegrown feed, renewable energy, animal welfare and longevity, nature and biodiversity and manure management.

The goal of the Low Carbon Dairy project is ambitious – to see if the company can help reduce the carbon footprint on the seven U.S. farms Manning works with by 50% in three years.

“But we’re not looking to do that at any cost,” she says. “We are trying to look at everything. We also want to make sure that we’re optimizing farm productivity, enhancing farm finances and helping increase farm resilience. We want these farms to be able to continue producing the milk needed to produce the ice cream that we make.”

All seven of the farms, predominantly Holstein-based, are within 30 miles of the Ben & Jerry’s ice cream plant and are representative of the farms the company works with across its business. The smallest farm has a 60-cow herd and a sole proprietor, while the largest farm milks just under 1,000 cows. The remaining five farms are in what Manning calls the “really tricky” 300- to 600-cow range.

“We’ve learned it can be more difficult to find solutions for these smaller herds; whereas, if we worked with only bigger farms, some practices may be easier to implement,” she says.

Solutions In The Making

Consumers not acquainted with dairy operations often assume the biggest contributor to a dairy farm’s carbon footprint results from manure. “Cow farts and manure get a lot of press,” Manning says.

Instead, the biggest single source of emissions on the dairy is from enteric fermentation, created as cows ruminate. As they ruminate, they exhale methane as a by-product.

Manning is hopeful enteric solutions that are becoming available and currently undergoing research will be part of the GHG strategy for the farms doing business with Ben & Jerry’s.

“We are optimistic about the potential of these solutions for use on these farms,” Manning says.

She notes that Ben & Jerry’s pays a stipend to the seven farms to cover staff time and practice adoption as part of the low-carbon project, and they also cost-share with producers on a variety of projects. “We don’t force our farm partners to adopt a solution that’s not right for that farm and that’s not right for their management style,” she says. “The farmers have to have a reason that matters to them for why they adopt a practice or install something on their operation.”

Some of the projects the company has helped farmers cost share include robotic feed pushers, feed storage improvements to prevent spoilage, urease inhibitors, manure technologies, and even the installation of solar panels on barn roofs.

Animal Welfare And Longevity

All of the US dairy farms that participate in Caring Dairy are working towards certification to the Global Animal Partnership (G.A.P.) animal care standard, a robust animal welfare standard for dairy, verified by third-party audits. “This is something Ben & Jerry’s is definitely pushing the envelope on a bit in asking the producers to do some things that might bring them outside their comfort zone,” she says.

Manning has been working with Novus International to analyze cow comfort, facility design and management on each farm through their C.O.W.S. program, and then working with the farms to make improvements.

“Farmers are pleased to find that healthy, productive cows drive down greenhouse gas emissions while also increasing the productive life of the herd,” Manning says.

On one farm, the producer resized some of his barn stalls to better accommodate the size of his cows.

“Since the assessment late last summer, he has had the hoof trimmer there weekly (a change from bi-weekly visits) working with his cows and has seen a significant reduction in the number of blocks that are going on,” she says.

Beyond The Cows

On the cropping side of the equation for the farms, Ben & Jerry’s has partnered with the University of Vermont Extension service, who has played a pivotal role in supporting the broader Caring Dairy program in the adoption of biodiversity improvements such as including the use of cover crops, adopting reduced tillage and no-till, and decreasing the use of synthetic inputs.

“We have seen a lot of success with these regenerative agriculture practices,” Manning says. “For instance, these practices have led to increases in soil respiration, soil carbon storage, and overall soil health metrics. In addition, the farms have improved their perennial grass stands by renovating with a biodiverse seed mix recommended for our region.”

In 2023, the company helped the seven farms in the low-carbon project improve 350 acres of grass land.

“This year we plan to rejuvenate almost 600 additional acres, which combined will account for almost 25 percent of the grass acres in the Low Carbon Dairy project,” she says.

Progress To Date

Addressing climate change, and working to reduce greenhouse gases, is a long-term undertaking. It takes time to move the needle in the right direction. But after a couple of years of effort, Manning is pleased with the results.

“So far, we’ve seen a 16% reduction in emissions on these farms as compared to our 2015 baseline,” she says. “And we’re not done yet. We plan to scale up successful practices across Caring Dairy in the future.

“The conclusion here is that the farmers that we’re working with are working really hard in all of these areas and are driving positive impacts across all aspects of their dairies,” Manning adds. “We’re proud of the farmers that we work with and appreciate the relationship that we have with them. We know their focus is on running their farms but applaud them for taking on this additional initiative.”

More and More Dairies Diversify to Survive

Tue, 04 Jun 2024 20:42:12 GMT

Editor’s Note: This is one article in a series that is included in the 2024 Farm Journal’s State of the Dairy Industry report. The full 16-page report will appear in the May/June issues of Dairy Herd Management and Milk Business Quarterly and will be published in this space over the next several weeks. To download the full report for free click here.

(Farm Journal)

With the current economy producing low milk prices and consequently little to no income, more and more dairies are exploring options to add alternative profit sources to cushion their bottom line.

According to Marin Bozic, assistant professor in dairy foods marketing economics at the University of Minnesota, many traditional dairy farms, whose incomes were based almost exclusively on milk and meat, will expand to enterprises with a multitude of revenue streams.

“We already are seeing elements of this conversion on some farms, and innovation will allow more to follow,” he says.

We asked surveyors what avenues they are exploring to generate added profit to help with their farm’s overall profitability, and the results showed that branded beef and agritourism are leading the way. The results also illustrated that just 18% of respondents currently capture revenue from on-farm milk bottling, cheesemaking, or ice cream production. All told, a substantial portion of producers do plan to begin these activities, with a fourth of respondents’ sharing they are aiming to add branded beef in the coming years.

With super strong beef markets, it is no surprise that nearly 60% of respondents say they are currently breeding dairy cattle to beef. Diversification appears to be an essential ingredient to the modern dairy. Of all the respondents, only 20% designated their operation as dairy-only, while others described their operations by including growing crops and using beef for revenue.

Interestingly enough, dairies with beef-on-dairy operations are more likely than dairy-only operations to say they are planning to grow or expand in some way.

Jacob Larson of Larson Dairy in Florida, says as the next generation of Larsons return to the family’s 5,500-cow dairy, they’ll have to explore what makes economic sense.

“The level of return on investment in this industry is tough,” he says. “The next generation is going to need some clues as to whether this is a good return for the investment or not.”

It's Time to Think Beyond Milk: The Value of Beef-on-Dairy

Wed, 29 May 2024 15:12:25 GMT

With milk prices experiencing a significant downturn and input costs reaching new highs, dairy producers have been quick to search out alternative revenue streams to help their operations turn a profit. One of the most common methods has been to incorporate a beef-on-dairy program.

With diversification now a piece of the profitability puzzle, of the dairies who participated in our survey, just 20% operate a dairy-only business, meaning more than three-fourths of the respondents have diversified in some way – either with cash crops or breeding for beef-on-dairy.

With the cattle market skyrocketing in recent years, dairy producers have capitalized on higher meat markets. In turn, this has caused a multitude of producers who are taking advantage of a beef-on-dairy program to sell cross calves within a matter of days. In fact, 46% of the respondents note they sell their beef-on-dairy calves within their first week of life. In contrast, others have found profitability in keeping these calves for longer durations.

Of the respondents who are creating beef-on-dairy calves, more than half are retaining ownership throughout weaning. Other dairy producers are finding success with raising their beef-on-dairy cross animals all the way to finish, with 38% of our respondents saying they currently do so, and another 18% planning to do so in the next three to five years.

While the portion of today’s dairy farmers who raise these cross animals all the way to finish is growing, only 14% are currently selling a branded beef product. As farmers fine-tune their beef-on-dairy program, however, this branded beef market does have room to expand, with nearly 20% of our respondents saying they plan on marketing their own beef product in the next three to five years.

The Big Picture - State of the Dairy Industry Survey Results

Thu, 23 May 2024 15:34:16 GMT

Survey Results

Farm Journal’s State of the Dairy Industry 2024 Report surveyed 210 dairy producers throughout the U.S. whose cowherds range from 100 to 20,000 head. Our forward-thinking survey asked participants about the challenges they face, along with future opportunities. We wanted to know what they envision their operations will look like in five to seven years. We are proud to present the findings and share several insights of what’s to come in the years ahead.

One clear insight documented is U.S. producers are feeling the weight of the challenges they face. Nevertheless, their outlook appears to be promising.

More than two-thirds of dairies reported five years of profitability, and more than half have a growth mindset with plans to expand in one way or another in the next five years. More than a third of the survey respondents said they plan to grow by increasing cow numbers or adding new sites, while others will invest in on-farm revenue streams or upgrade their facilities to increase cow comfort and production.

Several Challenges

Respondents also said milk’s volatile pay price was a constant headache as it emerged as a top concern for nearly a third of respondents. Additional top concerns for producers included finding and retaining labor and the overall rising cost of inputs.

2024 has caused dairies to face low milk prices and uncertainty, both of which make it hard to meet their farm’s individual goals. When you factor in high inflation and labor challenges, it challenges those producers who want to grow their business in one way or another. Some dairies who expressed the desire to expand said they are unable to do so because of being landlocked or priced out of the land market. Other dairies, some small, said their size hurts them. One respondent said they were concerned about larger farms becoming vertically integrated.

Next Five Years

The next five years will bring significant measured change to the industry. Suppliers and dairy stakeholders can anticipate that dairy operations will continue to disperse. Economies of scale are evident in this report — as larger operations, those having multiple sites, owning more land and growing more of their own feed — are more likely to be profitable. And those that are more profitable are also more likely to grow and expand in the coming years.

(Farm Journal)

Understanding Profitability

While there certainly is no cookie-cutter answer to what equates profitability and general success, our survey indicated those that were more likely to be profitable were operations with:

Large cow count, having more than 5,000 head.
More likely to have multiple sites in the operation.
More likely to own 1,000 or more acres of land.

Other variables of profitable operations include growing more than 75% of their feed and employing from one to two or employing more than 50 workers. Non-family employees are also more common among profitable dairies.

(Farm Journal)

Phil Plourd: Not Easy Isn’t the Same as Not Optimistic

Wed, 22 May 2024 14:41:11 GMT

Here’s a decidedly unbold prediction: The basics of dairy farming won’t get markedly easier in the next three to five years. It’s always been a tough space, and it’s going to stay that way because of a long list of crazy variables that won’t change. I’m talking about animal biology, cows that insist on giving milk seven days a week, weather, perishability, price volatility, government regulation and fickle consumers.

Because it’s hard, we’ve seen consolidation continue at a breathtaking pace. USDA’s latest Census of Agriculture, covering 2022, offered another dose of sobering statistics. According to the report, we had 24,082 dairy operations with milk cows in 2022, down 39% from 2017 and down 51% when compared to 2012. Extrapolating the trend to 2027 takes us down to somewhere between 18,000 and 19,000 farms – another 20% to 25% reduction.

Maybe the trend slows some. But whether its accurate doesn’t change the reality that producers looking to be in the business in three to five years need to be battle ready.

Here are a few thoughts on what being prepared might involve from a farm or industry perspective:

Proactively deploying risk management tools. Dairy Revenue Protection insurance policies paid out more than $500 million in net indemnities in 2023. Producers maximizing Dairy Margin Coverage utilization received something close to $150,000. Make sure you don’t get caught naked in a corn market rally. Insurance products and other risk management tools won’t always pay, but the name of the game is making it through the margin droughts that inevitably materialize.
Maximizing productivity. Higher productivity means a better chance of profitability. I suspect producers seeking every leverage point will fare better than others.
Cashing in on as many climate opportunities as possible. No one really knows what will emerge in the months and years ahead, and some things won’t be possible for every operation. But we will likely see ways to get paid at least a little for participating in various programs, and maybe a lot from some.
Leverage data and technology. Farmers have increasing access to tools that help them better understand and manage their business. It’s one area where things are getting easier. Get into the numbers. Act on what they are suggesting.
Urging leaders to aggressively pursue trade opportunities. The U.S. dairy industry is in a great position to increase exports. New Zealand output isn’t likely to get much bigger. European farms will struggle to produce more in the face of ever tighter environmental restrictions. We will continue to see more middle-class consumers and Westernized diets around the globe — more people looking for good sources of protein like dairy. But U.S. agricultural interests must apply major and constant pressure on Washington to stay engaged on trade.
Championing investments in protein innovation. Dairy proteins have a bigger place to play domestically and internationally.

U.S. dairy producers have no fear when it comes to innovation, productivity, and sheer grit. The world will demand more dairy products. The U.S. is ready to deliver — even if it’s not easy.

Phil Plourd is president of Ever.Ag Insights. The risk of loss trading commodity futures and options can be substantial. Investors should carefully consider the inherent risks in light of their financial condition. The information contained herein has been obtained from sources to be reliable; however, no independent verification has been made. The information contained herein is strictly the opinion of its author and not necessarily of Ever.Ag Insights and is intended for informational purposes. Past performance is not indicative of future results.

A Snapshot of Farm Journal’s State of the Dairy Industry Report

Tue, 21 May 2024 13:49:39 GMT

As the dairy industry continues to change at lightning speed, Farm Journal recently surveyed 210 dairy producers throughout the U.S. – ranging from a 100 to 20,000-cow herd size – asking participants about challenges and opportunities that face them. We asked what growth looks like for their dairies and ultimately what they envision their operations to look like in the next 5-7 years. Our 2024 Farm Journal’s State of the Dairy Industry report provides several data and insights, including:

Technology

Nearly a third of dairy operations surveyed intend to invest in technology such as heat and health monitoring detection systems, parlor automation and updates, or data analytics to monitor and capture efficiency opportunities within their operations. Between 24-32% of our surveyors shared that they intend to invest across at least five areas of technological focus in the coming years.

Succession Planning

The overall concern as to how to pass the baton from one generation to the next is real, as 46% of respondents stated they do not have a succession plan or are unaware of the operations plans.

The majority of respondents of all herd sizes shared that they do plan to add a family member or bring a partner into their dairy in the next five years. This includes 74% of the 5,000+ cow herd sizes, saying they plan to bring family or partners into their dairy operations.

Sustainability

If there is one clear area or need among the participants, it is that of enhancing on-farm stewardship activities. In five of seven areas probed, the majority of respondents cite a need for additional stewardship resources. Also, 86% of respondents felt the dairy industry will see greater pressure to lower environmental impact.

Alternative Profit Sources

Diversification appears to be an essential ingredient to the modern dairy. Of all the respondents, only 20% designated their operation as dairy-only, while others described their operations as including growing crops and using beef for revenue. We asked surveyors what avenues they are exploring to generate added profit to help with their farm’s overall profitability and the results showed that branded beef and agritourism are leading the way.

Beef-on-Dairy

With the cattle market skyrocketing in recent years, dairy farmers have capitalized on higher beef prices. In fact, 46% of the respondents stated that they sell their beef-on-dairy calves within their first week of life and nearly 20% say they plan on marketing their own beef product in the next 3-5 years.

Processor-Producer Relationships

Roughly half of respondents said they are not confident in their processor relationship. When asked about their confidence in the future of their existing milk market, the overall response was softer yet. However, 70% of surveyors believed the dairy industry has future opportunities when it comes to innovation and processing.

Despite the mountain of challenges that producers face, the outlook appears to be promising. More than two-thirds of dairies reported 5-year profitability, and more than half have a growth mindset with plans to grow in one way or another in the next five years.