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

Mon, 19 May 2025 14:15:39 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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The dairy industry is undergoing rapid transformation and innovation at an unprecedented pace. As part of its ongoing efforts to understand these shifts, Farm Journal recently conducted a comprehensive survey involving 400 dairy producers across the U.S.

These producers, representing herds ranging from 100 to 20,000 cows, provided valuable insights into their current operations and future outlooks.

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 .

State of the Dairy Industry: Study Indicates Continued Growth Presents Challenges and Opportunities

Tue, 28 May 2024 18:44:16 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 has released its State of the Dairy Industry 2024 Report. It surveyed 210 dairy producers throughout the U.S. More than two-thirds reported five years of profitability, and more than half have a growth mindset with plans to expand in the next five years.

The study shows the business of dairy farming won’t get any easier in the next three to five years due to a host of variables. That is why consolidation has continued at a breathtaking pace and dairy farmers need to be proactive.

The latest USDA Census of Ag showed around 24,000 dairy operations in 2022, down 39% from 2017 and 50% from 2012. And Ever.Ag Insights president Phil Plourd, says extrapolating that trend to 2027 takes operations down another 20 to 25-percent.

Dairies with 2,500 plus cows now account for more than 50% of operations. And over 60% of the milk comes from dairies 1000 head or more.

“What it says is that for the dairy producers that are still here, you know, it’s a dogfight, it is a street fight, in terms of figuring out ways to stay relevant, to get more productive to stay ahead of the curve to manage risk better, because it’s never been an easy business. It’s not going to be an easy business anytime soon.”

Dairy producers surveyed indicate the biggest challenges for the future are the pay price for milk, ag labor and the cost of inputs.

Plourd adds, “We’ve had a couple of years here of relatively elevated feed prices. We certainly know that labor is more expensive. Just to general inflation, right around operations.”

To overcome those challenges, Plourd says maximizing productivity presents a better chance of profitability.

“The investment needs to continue genomics, genetics, making the best productivity, this is we can around breeding, and then feeding and then housing and just you know, it’s sort of the investment in productivity has to be there, because productivity is profit at the end of the day, right??

He says dairy producers also need to proactively deploy risk management tools. Producers maximizing Dairy Margin Coverage received close to $150,000 in 2023.

“DMC can go a long way to providing real meaningful protection to a farms profitability.” says Plourd. “And the cost of it is you know, it’s sort of a no brainer in terms of what it takes to get involved with DMC. So, at a minimum, that’s a nice safety net for up to 200 cow producers.

For 200 plus cow operations, Plourd says Dairy Revenue Protection paid out more than $500 million in net indemnities in 2023 and it’s the key for staying in business.

“It’s a great product because you’re basically at subsidized put options, you know, at a very, very high level. That’s what we’re dealing with. And so, you’re able to protect downside and keep the upside net of what it costs you for the insurance.”

Beyond that, he says the dairy industry is becoming increasingly dependent on exports and farmers are losing out with the lack of a robust trade agenda.

“I just think from a political perspective, I think that that farmers generally need to keep beating the drum with their legislators and representatives that you know, ag trade is really, really important to the American farmer. And there’s a whole world of opportunity out there.”

He also recommends cashing in on climate opportunities, leveraging data and technology and investing in protein innovation.