Most of the 333 farmers who participated in Cooperatives Working Together’s fourth herd retirement this year cited high production cost as a key reason why they chose to sell their herds, according to a survey released Wednesday.

CWT mailed questionnaires to all of those farmers whose bids were accepted in the CWT herd retirement round conducted earlier this year. The response rate was very high: 205 of the 333 returned the surveys, or 62 percent. The survey was intended, among other things, to provide greater insight into the reasons why producers chose to submit bids and whether they intend to continue dairy farming in the future.

The questionnaire provided multiple reasons why a farmer may have wanted to submit a bid; producers could choose as many as they wished. The list of reasons, and the frequency with which they were cited by the 205 respondents, is below:

  • Increased production costs:             59%
  • No one to pass the dairy on to:        40%
  • Pursue other types of farming:         37%
  • Wanted to retire:                                  26%
  • Family health issues:                         25%
  • Financial difficulties:                           20%
  • Environmental pressures:                 15%
  • Pursue non-farm employment:         12%
  • Opportunity to start with a new herd:  8%
  • Opportunity to sell farm:                        7%
  • Wanted to move dairy:                           1%
  • Other:                                                        4%

In terms of demographics, most of those surveyed were older: three-quarters of the producers were over 50. The age categories of the respondents were:

  • 20-39:                5%
  • 40-49:              20%
  • 50-59:              39%
  • 60-70:              27%
  • Over 70:            9%.

The producers were also asked to categorize how much dairy farming contributed to their family’s overall income. More than half relied on dairying for more than 75 percent of their income. The breakdown was:

  • 0-24% of income         7%
  • 25-49%                       11%
  • 50-74%                       27%
  • 75-99%                       26%
  • 100%                           29%.

 The other major question was whether the producer planned on engaging in dairy farming again. Just 12 percent said that was their intent, with 80 percent of that group planning to start again at their current location, and the remaining 20 percent planning to move to a different location. Interestingly, 68 percent of the 12 percent that planned to resume dairy operations said they would do so with a smaller herd; 28 percent with a herd of the same size as the one retired; and just 12 percent with a larger herd. 

Jim Tillison, CWT chief operating officer, says that the survey “confirms that increased production costs, especially high feed and fuel expenses, have really changed the economics of the dairy sector, to the point where they are pressuring some producers out of the business.” 

The survey is also consistent with anecdotal stories and survey results from previous herd retirements that while economics drives many to submit bids, many producers also are looking for an opportunity to stop dairying permanently because of health or family succession issues, Tillison adds. “In fact, many just want a graceful way to exit the business after many decades of milking cows.”

Cooperatives Working Together