Survey Finds Fewer Dairy Farms

October 31, 2000

U.S. milk production is increasing, while the number of dairy farms is heading in the opposite direction, according to a report released by the American Farm Bureau Federation. In July the number of dairy farms in the United States declined 5.1% compared to the previous year.

The report indicates there were 83,025 U.S. dairy herds in July, a decline of 4,502 from last year, according to Ken Olson, AFBF's dairy policy specialist. Since 1992, AFBF, with assistance from state Farm Bureaus and Extension personnel, has surveyed state dairy agencies to determine the number of farms selling milk in each state. Since the survey's first year in 1992, the United States has lost 36.9% (48,510) of its dairy herds.

"This year's decrease of more than 4,500 dairy herds is a significant loss and has a major impact on the families involved, but it is consistent with what has occurred over the past nine years," Olson said. "Given current milk prices, and projected prices over the coming months, it appears that financial stress will remain in the industry for some time. This is certain to force continued change, and change is likely to occur at an ever more rapid rate in the coming years.

"We see a dynamic, changing dairy industry across the United States that is adjusting to new technology, price volatility, environmental concerns and a variety of other issues. The herd losses that have occurred are certain to have ongoing impacts on the dairy infrastructure across the nation as it adjusts to the changing herd structure."

While the rate varies, change is occurring in all regions of the country. Over the past nine years, each region of the nation has lost more than one quarter of its dairy herds. The report shows that the Southeast has had the largest percentage loss in five of the last six years. During the eight years when comparisons are available, the Northeast and the West have each had the smallest loss in four of the years.

During the past year, however, the nation has seen a substantial increase in milk production, "with national increases of more than 3% virtually every month," according to Olson. While a few states have provided the bulk of the growth, every region has shown increased production.

"Increased production is a result of both a major increase in herd size and increased production per cow," Olson said.

From 1992 to 1999 average milk production per cow increased from 15,570 to 17,771 pounds of milk, according to USDA. Olson said increases this year will take the average "well over" 18,000 pounds of milk per cow. Since 1992, average dairy herd size has increased from 73 to 111 cows. This year's average herd size is six cows larger than 1999.

The report indicates substantial regional differences in herd size. During the past year, the average herd size in the Southeast was 158 cows, up 10 from last year; 521 in the West, up 36 cows; 81 in the Northeast, up two cows; and 70 in the Midwest, up three. Among the states, New Mexico had the largest average herd size at 1,551 cows, while Indiana was the smallest at 60 cows. Florida had the largest average herd size in the Southeast at 684 cows; Delaware was the largest in the Northeast at 129; and Kansas was tops in the Midwest with an average herd size of 136 cows.

Milk prices over the last year have varied, from relatively good in the summer and fall of 1999 to quite low for most of 2000, Olson said. During the past 12 months, feed prices have been relatively low, reducing a portion of the stress from low milk prices. This combination of factors, however, has resulted in a continuation of the downward trend in herd numbers.