A specialized type of agricultural business where fluid milk is the principal source of family income. Dairy farming is placed in context with other types of specialized agricultural businesses. Major changes in dairy farming occurring in recent decades are identified. Changes in the location of dairy farms within the U.S. and the reasons for these changes are identified. Challenges facing dairy farmers and new technologies and approaches in the industry are identified.
Dairy farming is one of the most important types of commercial agriculture carried on in the United States. In 2007, USDA economists estimated that 8.6 percent of the net value added by farm production in the United States originated on commercial dairy farms. Most dairy producing units are operated by farmers who grew up on dairy farms; these units are managed as family businesses. Increasingly they are specialized, where sales of fluid milk provide the primary source of both farm and family income. Typical dairy farmers buy a substantial part of the grain and concentrate feed which their cows consume. Most of the roughages they feed – hay, pasture, and silages – are produced on acreages these dairy farmers own or rent. An exception to this is on some of the largest farms, with 5,000 cows or more, commonly found close to urban areas in the irrigated West, where they contract to obtain part of needed alfalfa and corn silage from other farmers.
During the past 10 years dairy production has continued to evolve rapidly as new technology has been adopted by farmers to increase their efficiency and farm productivity. Total U.S. milk production increased 18 percent between 1998 and 2007 to more than180 billion pounds (Figure 1); at the same time, average annual production per cow has increased nationally from 17,000 to more than 20,000 pounds (Figure 2).
Fewer Dairy Farms and the Changing Structure of the Dairy Industry
In a span of a mere 10 years, the number of dairy farms in the United States fell from a little fewer than 120,000 to fewer than 75,000 (Figure 3). A major shift out of milk production occurred on farms milking fewer than 100 cows in this surprisingly short period. A combination of older, inefficient facilities on farms with limited resources, lack of hired labor, and increased short-term debt in years of poor milk prices led to these exits from dairy farming, especially from the older, traditional dairy areas in parts of Wisconsin, New York, Pennsylvania and New England. Larger dairy farms with newer, technically more efficient production systems and strong management provide an increasing share of the nation’s milk production.
Some additional detail from the NASS data about the herds supplying two-thirds of the nation’s milk production in 2006 provides perspective on the importance of these 7,720 farms in 2006 with herds of 200 or more cows.
A majority of the dairy farms with 200 to 2,000 cows are still located in the old, traditional dairy regions. Operators of these businesses have expanded their herds by adding new, labor-efficient facilities and renting additional cropland nearby to provide an important share of the feed and roughages for their herds. These managers often hire dairy nutritionists to advise them in testing the nutrient content of their roughages and balancing their rations with concentrate feeds; veterinarians come on a regular basis to check cows and assist them in maintaining herd health. Artificial insemination is the norm in most of these herds. Care of dairy calves and yearling heifers is given priority in their management plans.
Waste management has assumed greater importance on all dairy farms, regardless of their size, but especially for those with more than 500 cows. Federal legislation on Concentrated Animal Feeding Operations (CAFO) requires that formal plans for handling all waste products, where more than 700 animal units are centrally located, must be approved and then followed. Most dairy farmers have accepted that these national requirements are necessary and appropriate for them to operate as good citizens in their respective local neighborhoods. The greater the number of cows milked at one central location, the greater the concern of able managers to minimize the dangers from overflows from lagoons, or from creating odor problems associated when spreading manure on fields as an integral part of cropping programs.
Immigrants provide an important part of the labor force used in milking cows and raising calves and heifers on most farms with 500 or more cows. Owners and managers of these dairy operations are in agreement that a federal solution is needed to allow this important source of labor on the nation’s farms to work legally on a continuing basis without harassment. Many other specialized farming operations of different types throughout the country likewise are highly dependent on immigrant sources of seasonal and permanent labor supplies to continue production.
The rapid reduction in the number of farms with less than 100 cows in the last 10 years has not occurred without substantial difficulty for the farm families who have left milk production. Most left dairy farming because their businesses could not continue to compete as their production costs rose more rapidly than the prices they received. Operators with older dairy facilities, located on less productive soils, became greatly disadvantaged, especially when located at some distance from population centers. Future opportunities to make a good living on such farms appeared difficult for the next generation in these families, as well as to potential buyer/renters. Extension programs to assist families with the transition out of farming have been helpful in many cases, but the emotional costs to such dairy producers and their local communities remain high. Mounting debts in the face of highly variable milk prices have taken their toll on families having to give up dairy farming. Gains in productivity and efficiency in this industry have thus resulted in important social costs. In most cases, the most productive lands on these farms have been rented by neighbors with newer dairy facilities and strong management skills. Thus, the most productive acres and dairy animals continue in production but under different management in the same state or region.
Changes in the Location of the Dairy Industry
Every one of the 50 states has a number of specialized dairy farms producing milk. But the day of nearly every farm producing its own milk supply largely disappeared in the 1950s and 1960s. Farmers, other than dairy farmers, get their milk at a retail food market like everyone else. Specialization in livestock production is the general rule. Dairy cows thrive on a ration high in forages, especially hay and silages produced from corn, grass, and alfalfa or other legumes. They like cool climates and need daily access to large quantities of clean water to enhance their full productive capacities.
Initially, milk production was concentrated in the northern states of the U.S. on farms where hay and pasture were often the best uses of the tillable lands and hillsides of plateaus and valleys in the states east of the Mississippi River or bordering it on the west. As fewer and fewer people lived on farms and population became more concentrated in urban centers, specialized dairy farming followed the flow of people to locations where lands and water supplies could be adapted to produce the forages necessary for milk production. Thus, over the decades of the twentieth century, milk production moved increasingly south and west across the U.S. from the northeastern quadrant of the country.
At the beginning of the twentieth century, an important share of the U.S. population was located in the northeastern quadrant of the country where much of the milk was produced. The southeastern quadrant of the country did not have the pasture lands or the cool climate conducive to dairy production. Other agricultural crops made better use of that region’s natural resources. Dairying has followed shifts in population to some extent, but good conditions to grow the roughages that the cows need and a reasonable climate to maintain herd health are fundamental to efficient dairy production. The irrigated West has provided good resources for expanding dairy production in recent decades. Larger herds can be located on sites where manure can be used productively on well-drained cropland and winter housing is often less expensive per animal unit than in the humid East.
The top 10 states continue to provide an increasing share of the nation’s fluid milk supply and manufactured dairy products. For much of the twentieth century Wisconsin was the leading dairy state. California became the leading dairy producer in 1993 and much of that state’s production beyond fluid requirements is now turned into cheese and other manufactured products. The recent shifts of dairy production to relatively large farms in Idaho and New Mexico also reflect the efficiencies of large dairy operations using irrigated lands to produce high-quality roughages for dairy herds in dry areas, with cooling for the cows on hot days provided by mists as necessary. Much of this milk production is processed into cheeses, butter, and dry milk powder. Increasingly these products now are moving into international trade as U.S. dairy products compete effectively in the twenty-first century in the growing urban markets of Asia.
Historical Development of Dairy Farming in America
The first settlers who came to North America from Europe brought cattle with them as they cut out farms and created cropland from the forests along the Atlantic Coast. Dairy animals arrived in Jamestown, Virginia, in 1611 and at the Plymouth Colony in 1624. Most settlers sought to have a cow to provide them with milk and butter. While farming was necessarily a subsistence activity for most newcomers as they established new homes in the wilderness, some specialization of production began to occur as towns and cities were established, and every family could not keep its own cows, chickens, and gardens in town.
When the first national agricultural statistics were collected as part of the U.S. Census in 1850, there were 6.4 million dairy animals over two years of age reported in the nation to meet the needs of 23 million people; essentially one dairy cow for every four persons. The first regular shipment of fluid milk by rail occurred from farms in Orange County, New York, to New York City in 1841. One of the first cheese factories in America was established in Oneida, New York, in 1851 to handle supplies without a retail market. Much of the continental United States was settled by the end of the nineteenth century. By 1900 there were 76 million people and 16 million dairy cows counted by the Census; about one cow for every five people. Mechanical refrigeration allowed further specialization in the handling of fresh milk; commercial pasteurization of milk was introduced in 1895, making fluid milk available to consumers more widely throughout the country.
In the first half of the twentieth century, great advances in technology and transportation improved life in rural America. All-weather roads and highways, telephones, and rural electrification brought modern communication and new sources of power to America’s farms. Trucks and tractors began to replace horses as the sources of power and transport on farms and highways. More dairy cows could now be milked by one person with machines; herd sizes could be expanded; specialized dairy farms serving major metropolitan markets became more common.
In the second half of the century, the wide use of production testing associations and artificial insemination allowed rapid genetic improvements to be made on larger numbers of dairy farms. The adoption of scientific and technological improvements led to rapid increases in the amount of milk produced per cow and per dairy farm worker. No less important were the advancements made in dairy nutrition and veterinary medicine in keeping cows healthy and able to produce at rates more nearly approximating their genetic potential. The quality of animal diets improved at the same rate or even faster than those for humans in many cases, as farm managers learned how to more fully utilize the roughages they had available to mix with their new carefully balanced concentrate feeding programs.
More and more dairy farmers adopted some form of free-stall housing programs for their dairy animals, giving greater freedom of movement to their cows; these dairy systems incorporated milking cows in “elevated automated parlors” where the cows came to their milkers, instead of workers going to the cows in stalls to milk them. This general system of milk production and management has been widely adopted internationally, wherever specialized dairy farming is practiced.
Certified Organic Dairy Farming
A market for certified “organic milk and dairy products” emerged in the United States and Europe in the late 1990s and has grown in the twenty-first century. National legislation on the production of organic foods was enacted in 1990 and then amended in important ways in 2005: “Section 2105. National Standards for Organic Production. To be sold or labeled as an organically produced agricultural product under this title, an agricultural product shall—
(1) have been produced and handled without the use of synthetic chemicals, except as otherwise provided in this title;
(2) except as otherwise provided in this title and excluding livestock, not be produced on land to which any prohibited substances, including synthetic chemicals, have been applied in the last three years immediately preceding the harvest of the agricultural products; and
(3) be produced and handled in compliance with an organic plan agreed to by the producer and handler of such product and the certifying agent.” To produce and sell organic milk, dairy farms must be certified by a state program. Most certified organic farms have free-stall housing systems; cows are on pasture for at least part of the year; commercial fertilizers other than manure are not used in producing their crops; growth promoters or hormones, or antibiotics cannot be used on their animals. Dairy herds of various sizes are certified as organic milk producers; an important number have less than 200 cows; some larger herds are also certified in individual states.
Issues Facing Dairy Farmers in the Twenty-first Century
Dairy farming continues to evolve in the United States as productivity on farms has increased with the adoption of new technology, improvements in nutrition, and gains in the genetic capacity of dairy animals. International markets for American dairy products have developed in this century for the burgeoning industrial economies of Asia. Cheese, dry milk powder and manufactured dairy products now compete effectively wherever markets are open to American exports. Growth in domestic markets for dairy products mirror changes in population growth and the ability of the dairy industry to respond to changes in consumer demand. The growth in export demand for American dairy manufactures in future years will depend on the economic atmosphere for international trade ahead and industry skills in servicing the needs of these markets. Rewards to dairy producers will continue to flow to those who produce high-quality milk close to centers where their production is processed for retail outlets or by manufacturers of dairy products. Further consolidation of dairying around established dairy producing centers in the U.S. seems likely.
Robotic Milking Systems: Reinemann, University of Wisconsin, reports that the population of farms using robotic or automatic milking systems has grown from the first successful installation in the Netherlands in 1992 to more than 8,000 milking units on more than 2,400 farms in 2007. The vast majority of these farms are in northwestern Europe with the largest numbers in the Netherlands and Scandinavia. In both Canada and the United States there are a number of dairy farms now in operation using this technology. The capital investment per cow for these installations is suggested by Rotz to be roughly three times more than for free-stall operations. Cows decide when they are ready to be milked, then enter the milking parlor, and are milked using an automated system. Labor requirements are thus greatly reduced. Most successful operations in the U.S. have been operated on farms with less than 150 cows. The viability of this new technology in commercial use over time is being evaluated by farmers and scientists in practical market settings at the end of the decade.
One other source of both interest and concern to dairy farmers is the increased demand for corn and soybeans from firms producing ethanol and other sources of “alternative energy.” Prices of these basic sources of concentrate feeds have risen rapidly to allocate limited grain supplies in both domestic and international markets. As the search for new renewable energy sources continues in this century, the limited supply of agricultural lands suitable to produce corn and soybeans cannot be expanded very much. Dairy production must then respond to a changing nutritional environment where concentrate feed may need to provide a smaller portion of the nutrient requirements for profitable milk production. In this environment, strong emphasis on wise management decisions by dairy farmers, always important, will pay big dividends.
Managers of dairy farms must continue to be good citizens in their local communities, appropriately concerned with the handling of manure and waste water and the odors associated with spreading manure and housing their herds. As herd sizes increase, the need to respond effectively to their non-farm neighbors’ concerns about the environment is critical to their success as operators. The bigger a dairy business becomes, the greater the importance of working to maintain good relationships with the public around it. Participation in farm-city days and similar community activities to educate neighbors about dairy farming deserves the time and effort required.
— Bernard F. Stanton
- Kellems, Richard O. and David C. Church. Livestock Feeds and Feeding. 5th ed. Englewood Cliffs, NJ: Prentice Hall, 2001.
- “Milk Production.” Washington, DC: U.S. Department of Agriculture, National Agricultural Statistics Service, 2008. Accessed February 2008. Available at http://usda. mannlib.cornell.edu/MannUsda/viewDocumentInfo.do? documentID=1103.
- Reinemann, Douglas J. “Robotic Milking: Current Situation.” NMC Annual Meeting Proceedings, 2008. Accessed February 2008. Available at http://www.uwex.edu/uwmril/pdf/RoboticMilking/RoboticMilking/ 2008 NMC Robotic Milking Situation.pdf.
- Rotz, Clarence. “Should I Consider Robotic Milking.” Hoard’s Dairyman 149, no. 19 (2004): 733.
- Tyler, Howard D. and M. E. Ensminger. Dairy Cattle Science. 4th ed. Upper Saddle River, NJ.: Pearson/Prentice Hall, 2006.