While a powerhouse struggles, the nation’s midsection expands its dairy industry.
California may be the nation’s top milk producer, but other states are eclipsing the Western powerhouse in their pace of dairy growth.
Colorado, Kansas, Texas, Michigan and Indiana are among the leaders in milk output gains since 2010, a sign these heartland states may become more prominent players in the long-term future of the U.S. dairy industry.
Although many fast-growing dairy states are small producers--only Michigan and Texas rank in the top 10 dairy states--they are ramping up milk output and cow numbers as new milk-processing plants take root inside their borders. Aiding their growth are available water, sufficient land base for manure management, ready access to feed, and states’ business-friendly policies.
Colorado ranks only 16th in U.S. dairy production, but it’s led all major dairy states with a 27.6% expansion in milk output over the past five years. Today, its 125 dairies are milking 145,000 cows and producing more than 3.6 billion pounds annually. Although those are small numbers compared to California’s 42 billion pounds and 1.78 million dairy cows, Colorado’s increase is impressive.
|Michelle Dickinson's Mountain View Farm milks 2,500 cows in fast-growing Colorado.
“I’m glad to be in a region that offers such opportunity for long-term growth,” says Michelle Dickinson, whose Mountain View Farm milks 2,500 cows near Loveland, Colo.
The expansion is mainly due to Leprino Foods’ two new cheese manufacturing plants, says William Wailes, Colorado State University Extension dairy specialist. With one cheese facility in Fort Morgan, Colo., Denver-based Leprino boosted its milk processing capacity in 2011 with a $270 million cheese plant in Greeley.
“As the Greeley plant expands to capacity, Colorado will see additional growth with the need of 50,000-plus more cows,” Wailes says.
In Texas, milk production has jumped more than 16% since 2010. That partly stems from the new Hilmar Cheese Co. processing plant, which went online in 2007 in Dalhart, in the Texas Panhandle. With new local milk demand, Panhandle dairy-cow numbers rose from 20,000 head to some 300,000 today.
More recently, a rebound from the state’s damaging 2011-2012 drought and accompanying high feed costs has boosted milk output in the Lone Star State, says Ellen Jordon, dairy specialist with Texas A&M AgriLife Extension. “Producers are expanding their herds and getting their operations up to capacity,” she says.
South Dakota Gov. Dennis Daugaard (center) promotes his state’s dairy benefits to interested producers at California’s World Ag Expo in 2013. [Photo: Catherine Merlo]
Expanding nearly 12% since 2010, South Dakota is among the nation’s fastest-growing dairy states. It’s still a small milk producer--just 2.1 billion pounds in 2014--but the trends are pointing up. In the first quarter of 2015, the state reached No. 20 among U.S. dairy states and is on track to surpass its 2014 production.
Bolstered by Gov. Dennis Daugaard’s hands-on support, South Dakota has recruited new processing plants and dairies.
“Our reasonable feed costs, favorable tax climate, strong demand for milk and unwavering support for agriculture make South Dakota a perfect place to expand the dairy industry,” says Daugaard.
In the Southeast, Florida and Georgia have bucked the region’s declining milk trend, with Florida climbing nearly 18% since 2010.
In contrast to the mid-section’s double-digit expansion, California’s milk output has barely budged in the past five years, with a stagnant .5% growth. Increasing social, financial and regulatory pressures have pushed 16% of California’s dairies out of business in the past five years.
Can dairy growth in the nation’s mid-section continue? Most think the pace will slow but that dairies are there to stay.
“Future growth will be impacted by increasing production costs and capital investment requirements,” Dickinson says. “If the market understands and responds to those, Colorado dairy farmers will be successful.”
Others wonder whether the accelerated depletion of the Ogallala Aquifer beneath the Great Plains will darken the outlook for emerging dairy states.
“It will be an issue for both dairies and crop producers,” says commodity broker Robin Schmahl, owner of Wisconsin-based AgDairy LLC. “The states in those areas were not meant for row-crop production to the extent that it has been done. When groundwater is depleted faster than it can recharge, it will eventually become a large problem.”