In the past decade, South Dakota’s dairy industry has been thriving with its dairy cow population more than doubling, marking a 117% increase, according to the U.S. Department of Agriculture (USDA). In the last five years alone the number of dairy cows has surged by 88,000 or 69%, positioning South Dakota as a national leader in dairy cow inventory growth.
The Role of Dairy Processors
Tom Peterson, Executive Director of South Dakota Dairy Producers, notes that this surge aligns with the expansion of processing facilities in the state, which consequently increased the demand for more cows. Companies like Agropur and Valley Queen have undertaken significant expansions, with Valley Queen recently completing another phase. According to Peterson, these expansions have necessitated a proportional rise in dairy cows to fill the new capacities.
“So, the cows essentially followed and filled up newly created capacity,” he says.
Looking forward, Peterson anticipates steady growth in the coming years, but not at the rapid pace experienced recently. Instead, he foresees a stabilization in growth rates.
A Smart Growth Strategy
Phil Plourd, president of Ever.Ag Insights, highlights South Dakota’s strategic approach to growth. He attributes the state’s success to favorable conditions for agriculture, such as a friendly disposition toward the sector, access to water, and quality feed.
“All things considered; it’s an easy place to do business with a lot of people that have ‘win-win’ attitudes,” he says. “That bodes well for future investment. Thinking about the future in other places, it’s fair to wonder how things measure up in the ‘easy’ department. The regulatory and cost environment in California, for example, doesn’t seem favorable. States such as Wisconsin are somewhere in the middle.”
Comparison with Wisconsin
While South Dakota’s dairy industry flourishes, the situation in Wisconsin—known as America’s Dairyland—differs starkly. In 2002, Wisconsin boasted 16,886 dairy farms, with each farm family milking an average of 142 cows. Fast forward to today, and the number of dairy farms has plummeted to 5,348. Despite a slowing rate of decline, Wisconsin continues to lose hundreds of dairy farms annually, with a notable loss of 455 herds in 2023 alone. This decline contrasts sharply with South Dakota’s growth, highlighting the shifting dynamics in the U.S. dairy industry.
Nonetheless, a recent 2024 Dairy Producers Survey by the Wisconsin Department of Agriculture, Trade and Consumer Protection provides a glimpse of optimism. Despite the decline in the number of farms, 81% of farmers surveyed indicated they plan to continue operations over the next five years, regardless of farm size.
State Support and Economic Impacts
Governor Larry Rhoden praises the devoted farmers and ranchers for their efforts, which have strengthened the state’s economy and positioned South Dakota as a leading dairy producer. The state, under the auspices of the Governor’s Office of Economic Development (GOED), emphasizes its commitment to supporting agricultural innovation. Over the past five years, the GOED facilitated 22 project wins within the dairy industry, resulting in 1.3 billion dollars in capital investment and creating nearly 700 new jobs.
As South Dakota continues to be an attractive environment for dairy production, thanks to supportive state policies and strategic investments, it stands as a beacon of opportunity for farmers and producers alike.
Your Next Read:
Dairy’s Gold Rush: Replacements Heifers and Beef-on-Dairy Calves
