Red tape may be slowing dairy growth

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How much time does it take you to cut through red tape in your locale? The answer could be the reason your region is thriving or diving in terms of dairy farm investment.

A recently released “Small-business friendliness” map by The Economist, using data from Thumbtack and the Kauffman Foundation, asked thousands of small businesses about local issues around hiring, regulation, zoning, licenses, health insurance and training. Thumbtack/Kauffman felt comfortable enough with the compiled data for 38 U.S. states* to assign grades on how states treat small businesses.

Contrasting the grades with our recent 5-Year Trend map in our magazine’s July Demographic section (pages 36 and 37) it appears the map lines up quite well for the dairy industry. Of course, beyond small-business friendliness, there are other dairy-specific and macroeconomic factors affecting each region. However, the survey makers were surprised how little the local tax rate had to do with their happiness, almost two-thirds of small business owners thought they paid their “fair share” of taxes.

  click image to zoom5-year trends of dairy cows and licensed herds5-year trends of dairy cows and licensed herds

For example, while high tax states Illinois and California get “F” grades, low-tax states like Florida and Washington were in the C-range. Meanwhile, a higher-tax state like Minnesota received a B because it is easier to set up a business. Like Florida, South Dakota has no state income tax, but there was not enough data to provide a grade**.

In the top 10 dairy states for cows, half receive a grade below a “C,” and 4 of those 5 are shrinking in cow numbers, with Michigan being the lone outlier.

 

Top 10 Dairy Cow States

2013

2008

Cow growth

 Small biz. friendliness grade

1

California

1780

1844

-4%

F

2

Wisconsin

1271

1252

1%

C-

3

New York

610

626

-3%

D+

4

Idaho

573

549

4%

A+

5

Pennsylvania

533

549

-3%

D+

6

Minnesota

464

464

0%

B

7

Texas

437

418

4%

A+

8

Michigan

380

350

8%

C-

9

New Mexico

323

338

-5%

D+

10

Ohio

270

280

-4%

C

 


(thousands of cows)

 

       

 

Bold states have "B" or "A" range small business friendliness grades.

 

 

 

 

 

In the top 10 states that grew cow numbers between 2008 and 2013, by percentage, only Hawaii (growing from 1,700 to 2,200 cows – smaller than one dairy in many states) and Michigan received a grade lower than a “C-.”

 

Top 10  Growth States (%)

2013

2008

Cow growth

 Small biz. friendliness grade

1

Hawaii

2.2

1.7

23%

F

2

Kansas

134

117

13%

B

3

Washington

266

244

8%

C

4

Michigan

380

350

8%

C-

5

Utah

92

85

8%

A+

6

Oregon

123

114

7%

C+

7

Nevada

29

27

7%

B+

8

Colorado

137

128

7%

A

9

Indiana

176

167

5%

B-

10

Georgia

80

76

5%

A-

 


(thousands of cows)

 

 





 

 

Bold states have "B" or "A" range small business friendliness grades.

 

 

 

 

 

You can check out their maps for Overall, Tax code, Regulations, and Licenses ratings at the original article, “Red tape blues.”

*Data for Delaware, Mississippi, Montana, and Vermont are from 2012, while data from Arkansas Hawaii and Maine are from 2013.

**North Dakota, Wyoming, West Virginia, and Alaska, also received no grade, but did not make either top 10 list.

Source: The Economist



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Dirk Reith    
St. Albans, Vermont  |  July, 09, 2014 at 10:17 AM

I lend money to start or expand dairy farms. This article is misleading to the agricultural business climate in Vermont. To my experience no start-up or expanding dairy operation been hindered by any regulation or red tape. I grant that large farm CAFOs need a manure management plan. I have not experienced a milk inspector that did not certify an operation. There is an ag land use program that reduces property taxes. A well-organized individual with a start-up operation could be milking within 30 days.

David    
Mich  |  July, 09, 2014 at 05:51 PM

Feed quality and availability, plentiful water, moderate climate, and dairy infrastructure( vets, nutritionists, land grant university focused on dairy) trump a c- business climate in Michigan. Lending helps, but that can come from outside the state. Now if Michigan just had more processing plants......... We currently haul enough milk out of this state every day to fill a world class cheese plant.


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