Earlier this month, the USDA National Agricultural Statistics Service released the latest Census of Agriculture data for 2022. When compared to the last census, which was conducted in 2017, the new data provides insights in on the direction the dairy industry is taking. And, without much surprise, herd consolidation was a major theme.
According to Lucas Fuess, Senior Dairy Analyst at Rabobank, there were 24,082 dairy operations with off-farm milk sales in 2022, down from the 39,303 dairy farms in 2017. In contrast, however, milk production increased by 5%, despite cow numbers remaining nearly identical at 9.4 million cows.
“Rabobank estimates that less than 25% of the U.S. milk supply (in 2022) was produced on farms with less than 500 head, but these operations accounted for more than 80% of dairy operations, at 20,631, offsetting their lower output with larger political clout,” Fuess says.
While dairy operations with less than 500 cows make up 80% of the nation’s dairy farms, the majority of cows within the nation’s herd reside on farms with 1,000 animals or more. The Census of Agriculture provides the following breakdown:
Percent of U.S. dairy herd residing on farms with more than 1,000 cows.
- 1997 – 17%
- 2007 – 40%
- 2017 – 55%
- 2022 – 65%
Similarly, the number of cows residing on farms with less than 100 cows has declined.
Percent of U.S. dairy herd residing on farms with less than 100 cows.
- 1997 – 39%
- 2007 – 21%
- 2017 – 13%
- 2022 – 7%
“In the future, it is likely that more cows will move to larger farms, which are able to produce milk at a lower cost versus smaller operations. Growth in the number of larger operations will persist, but smaller farms will continue to exist in sizeable numbers, especially those practicing diversified agriculture and those that have kept debt levels low.”
“In short, a majority of milk in the U.S. is produced on a small minority of farms and we expect consolidation to continue in the future as the industry grows as a whole,” Fuess concludes.
For more industry news, read:
- Milk Production Drops for The Seventh Month in A Row
- Producers Can Now Enroll in Dairy Margin Coverage for This Year
- America’s Heifer Shortage is Preventing Expansion. Is the Big Money for Beef-on-Dairy a Factor?
- 2024 Milk Production Forecast Reduced, All-Milk Price Looks More Encouraging
- What Can Producers Expect for Profits in 2024?
- Replacement Heifer Supply Continues to Tighten, Prices See Explosive Growth
- Beef-on-Dairy: Why Feedlots Crave This Important Information
