Weakening of Wisconsin Dairying Greatly Exaggerated

By Ron Johnson Dairy Editor
Thursday, November 13, 2008 11:20 AM CST

Wisconsin dairying can borrow a quote from Mark Twain: “Reports of my death are greatly exaggerated.”

It turns out that projections of dairy’s dwindling importance were also greatly exaggerated. Instead of continuing to lose milk production, as a series of papers titled “Rethinking Dairyland” forecast, production has risen, giving Wisconsin’s dairy industry new vitality and vigor.

The “Rethinking Dairyland” series was published between 2002 and 2004 by UW-Madison and UW-Extension, notes Ed Jesse, an agricultural economist at the university. In a just-released briefing paper titled “Growth and Transition in Wisconsin Dairying,” he looks back at what the “Rethinking Dairyland” papers projected.

“The tone of the leaflets was somber,” Jesse says. “Between 1985 and 2001, Wisconsin milk cow numbers had fallen from 1.9 million to 1.3 million, a loss of 38,000 cows per year.”

The third paper in that series stated: “Projecting Wisconsin cow number and yield-per-cow trends to 2015 shows state milk production at about 16 billion pounds, about eight billion pounds less than (in) 2001. Cutting the annual cow loss in half, to 19,000 cows per year, would still result in 2015 milk production about one billion pounds less than (in) 2001.”

But those “sobering” predictions of shrinking milk production did not materialize, Jesse points out.

“Indeed,” he writes, “Wisconsin cow numbers have stabilized, yield gains have accelerated, and, as a result, the state is poised to break the previous annual milk production record of 25 billion pounds that was set 20 years ago. Wisconsin’s dairy sector is in a positive state of growth and transition.”

The state’s cow numbers hit their bottom at 1.233 million in March of 2005. Two years later, cow numbers had increased 14,000, reaching 1.247 million.

It was a modest gain, to be sure. But Jesse points out that dairy cow numbers keep on rising from month to month. As a result, cow numbers have increased 42 months in a row.

“This kind of stability in cow numbers has not been observed in more than 20 years,” the economist writes. “Because of increasing cow numbers and a 1,500-pound gain in milk production per cow, total milk production increased by two billion pounds between 2004 and 2007, to 24.1 billion pounds. Production in 2008 will exceed 24.5 billion pounds.”

It’s not only more cows that have accounted for the increase in the state’s milk production. Milk per cow is up, too.

Milk per cow rose an average of 254 pounds a year between 1985 and 2001. But since then, the increase has been 355 pounds a year. That’s a jump of 40 percent, Jesse points out.

Still, per-cow milk production lags behind that in some other states. Arizona, California, Idaho, New Mexico and Texas had average per-cow milk production during 2007 of 21,143 to 23,260 pounds. Wisconsin’s, by contrast, was 19,310.

”But comparing statewide average yields is…unfair…” Jesse says. “Compared to western states, where most of the milk comes from large-scale parlor-freestall/drylot systems, Wisconsin dairy systems are much more diverse. In the five western states noted above, the percentage of milk produced by herds with 500 cows or more in 2007 ranged from 83 percent in Texas to 98.5 percent in Arizona. The comparable percentage for Wisconsin was 22 percent.”

He notes that many of Wisconsin’s smaller dairy farms are profitable with lower milk production. That’s because they use low-cost methods like rotational grazing. And, Wisconsin has “a large and growing number” of organic dairy farms that are also profitable.

It’s better, says Jesse, to compare the milk production of herds of 500 cows or more and leave the smaller herds out.

“The yield comparison for large herds leads to a different conclusion about Wisconsin milk yields,” he writes. “Wisconsin ranked fourth among states, and higher than any western state except Washington. This says that when matched head-to-head with comparable dairy farms in other states, Wisconsin producers are very competitive.”

Structure changed

The structure of Wisconsin’s dairy farms has changed, Jesse notes. Last month the state had approximately 13,500 dairy farms. From 1985 through 2004, the state lost 1,355 dairy farms a year. The past four years have seen that slow to 500 lost a year.

Last year the average herd was 86.6 cows. It grew by one cow a year from 1965 through 1997. But since 1998, the average herd size has risen by three cows a year.

The number of Grade B herds fell 75 percent between 1993 and 2007, Jesse notes. The number of Grade A herds dropped to, but at a rate of 50 percent.

On the other hand, Wisconsin has more Grade B farms shipping their milk in cans and cooling them with water. Last year there were 640 of those. Jesse attributes the increase to more farms owned by the Amish.

Larger herds

Larger herds are accounting for more of Wisconsin’s milk. In 1997, herds of 200 or more cows produced 11.5 percent of the state’s milk. By 2007 they produced 41 percent.

The biggest gain came from herds of more than 500 cows. They accounted for 5.3 billion pounds last year, up from less than 800 million pounds 10 years earlier.

Meanwhile, the amount of Wisconsin milk produced by herds of less than 50 cows dropped 50 percent during that decade. Herds of 50 to 99 cows also accounted for a smaller percentage of Wisconsin’s milk. Their share was 25 percent lower in 2007 compared to 1997. Still, herds of 50 to 99 cows produce 29 percent n the largest share - of the state’s milk.

Jesse notes that at the end of last year, Wisconsin had 1,000 herds of 200 or more cows. Even so, these herds were less than 7 percent of the state’s herds.

‘Transition’ category

Between 1997 and 2007, the number of herds of 100 to 199 cows saw “practically no change,” the economist says. But the category of 50 to 99 cows lost 3,300 herds, or 35 percent.

“There was practically no change in output in the 100 to-199-cow category,” Jesse writes. “The stability in number of farms and milk production in this category suggests it represents a transition category for smaller farms that have expanded their operations, as well as an efficient size category for family farms that have elected to minimize their use of hired labor.”

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