Minnesota Takes First Steps in Dairy Revitalization Effort

In February, the Minnesota dairy industry held a summit meeting to reinvigorate the industry and regain lost market share.

Wednesday, the first signs of the revitalization effort were rolled out at a meeting on the University of Minnesota campus.

The Minnesota dairy industry has been losing national market share for more than 20 years. In 1992, it ranked fifth in milk production, producing 6.5% of the nation’s milk. Today, it ranks eighth, producing just 4.4% of the country’s milk.

And just to replace retiring dairy farmers, the state needs to add 7,500 cows annually. Milk per cow is also an issue, with Minnesota averaging almost 11% less than the national average.

The revitalization effort, led by the Midwest Dairy Association (MDA) and the Minnesota Milk Producers Association (MMPA), featured four key first steps:

• The formation of the Minnesota Dairy Growth Alliance (MDGA), which will direct re-development efforts. The steering committee will have fifteen members, eight of whom will be dairy farmers. Processors will hold five seats with MDA and MMPA holding the remaining two.  MGDA is modeled after the Innovation Center for U.S. Dairy, which screens ideas for new initiatives and then pushes forward those with the most promise. (The old Minnesota Dairy Leaders Roundtable has been dissolved and the remaining funds transferred for use for the MDGA.) Marin Bozic, a University of Minnesota dairy economist, will be MDGA’s facilitator.

• The formation of the Midwest Dairy Business Institute (MDBI), which will provide dairy- intensive training for the next generation of dairy farmers. It will provide programming in four areas: Business management, financial analysis, risk management and leadership development. Three tiers of programming are planned, with the most intensive a two-year program. The Tier 1 program hopes to attract 20 to 30 young producers who are growth oriented. The group would meet quarterly for the intensive training. It is hoped the first cohort will begin in 2016.

• The building of a new, 300-cow dairy education and research facility on the University of Minnesota’s St. Paul campus. The facility would about double herd size and replace an aging tie stall barn, and would be designed to conduct production research, education and consumer out-reach and engagement. Located adjacent to the Minnesota State Fairgrounds, the site offers a tremendous, potential opportunity to reach more than a million Fairgoers each September. A feasibility study was conducted this month, and project members are now trying to match the project’s wish list with fiscal realities. It is hoped a proposal can be submitted to the Minnesota Legislature in 2016.

• MDA is also conducting an in-depth analysis of the cheese market. Minnesota cheese processing is heavily focused on American cheese production. And it might be hard-pressed to absorb even the 1.5% of annual milk production growth coming from state farms. The analysis is looking at both near- and long-term domestic and export opportunities for Midwest processors.