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.
Survey Results
Farm Journal’s State of the Dairy Industry 2024 Report surveyed 210 dairy producers throughout the U.S. whose cowherds range from 100 to 20,000 head. Our forward-thinking survey asked participants about the challenges they face, along with future opportunities. We wanted to know what they envision their operations will look like in five to seven years. We are proud to present the findings and share several insights of what’s to come in the years ahead.
One clear insight documented is U.S. producers are feeling the weight of the challenges they face. Nevertheless, their outlook appears to be promising.
More than two-thirds of dairies reported five years of profitability, and more than half have a growth mindset with plans to expand in one way or another in the next five years. More than a third of the survey respondents said they plan to grow by increasing cow numbers or adding new sites, while others will invest in on-farm revenue streams or upgrade their facilities to increase cow comfort and production.
Several Challenges
Respondents also said milk’s volatile pay price was a constant headache as it emerged as a top concern for nearly a third of respondents. Additional top concerns for producers included finding and retaining labor and the overall rising cost of inputs.
2024 has caused dairies to face low milk prices and uncertainty, both of which make it hard to meet their farm’s individual goals. When you factor in high inflation and labor challenges, it challenges those producers who want to grow their business in one way or another. Some dairies who expressed the desire to expand said they are unable to do so because of being landlocked or priced out of the land market. Other dairies, some small, said their size hurts them. One respondent said they were concerned about larger farms becoming vertically integrated.
Next Five Years
The next five years will bring significant measured change to the industry. Suppliers and dairy stakeholders can anticipate that dairy operations will continue to disperse. Economies of scale are evident in this report — as larger operations, those having multiple sites, owning more land and growing more of their own feed — are more likely to be profitable. And those that are more profitable are also more likely to grow and expand in the coming years.
Understanding Profitability
While there certainly is no cookie-cutter answer to what equates profitability and general success, our survey indicated those that were more likely to be profitable were operations with:
- Large cow count, having more than 5,000 head.
- More likely to have multiple sites in the operation.
- More likely to own 1,000 or more acres of land.
Other variables of profitable operations include growing more than 75% of their feed and employing from one to two or employing more than 50 workers. Non-family employees are also more common among profitable dairies.
