Trends in Wisconsin Dairy Farming Mike Wildeck UW-Extension Dairy Agent Marathon, Lincoln and Langlade Counties Data Source: UW PATS and WDATCP

Overview The “Changing Face” of Wisconsin Dairy Farms Seeking More Profitability Grazing, Large Parlor/Freestall Expansions, Low-Cost Parlors/Housing, etc…

DENSITY OF DAIRY FARMS IN WISCONSIN Not only where the cows are, but where the advisors, processors, lenders, and other dairy infrastructure is. Producers need to recognize that they need other dairy producers to keep our industry strong.

Number of farms and dairy cows has steadily decreased, but increased milk production per cow has offset the decrease in cows and kept total milk production fairly steady. Wisconsin’s share of US milk production is shrinking.

Trends in Farm Numbers The number of dairy farms in Wisconsin is closer to 17,000 in 2002.

Entry and Exit Patterns Net loss for the number of dairy farms has remained constant over the years. The real dilemma is the reduction in new entrants. Ask why.

2002 average herd size is nearly 70 cows.

The lion’s share of milk is still produced from small to medium sized herds. Note that in 1998 the largest 2% of Wisconsin dairy herds produced 14% of all the milk. In 2002, that figure is closer to 20%. For the US, the largest 2% of the herds produce more than 30% of the total milk supply.

Note that less than 15% of Wisconsin Dairy Farms use a milking parlor Note that less than 15% of Wisconsin Dairy Farms use a milking parlor. Explain why.

Note the relationship between adoption of various dairy technologies with herd size…..and why. Note the EXCEPTION of MIRG.

Expansion & Economies of Scale A few farms have increased size to capture significant economies of scale…..in purchasing and other inputs, specialized labor force, etc. Although the number of operations is relatively small, their impact on the industry is large, and getting larger.

Despite the high cost of a large milking parlor and freestall facility, the COST PER COW is often well below that of small dairies.

Large parlors are designed for efficiency Large parlors are designed for efficiency. Figures for milk harvested per person per year can be several fold higher than on some other dairy operations.

The quality of dairy expertise and management drawn to many larger dairies is a significant factor. If you were selling a product and made $10 per cow, would you rather have ONE client with 1000 cows or TWENTY clients with 50 cows each? Veterinarians are pictured here with the latest ultrasound equipment that can determine the exact DAY of pregnancy.

What Role does Grazing Play? Grazing is another very viable enterprise. An much more popular in terms of the number of dairy farmers adopting it.

According to recent estimates, nearly 25% of dairy producers in north central Wisconsin follow MIRG practices to some degree.

Grazing is Regionally Concentrated in SW and NC/NW part of the state Notice the contrast in low MIRG adoption in E/NE WI with the density of dairy farms shown earlier. What might this mean in future years?

Modernizing the Family Farm One option available to small to medium sized farms is the switch to a low-cost parlor. This can be used in a grazing or confinement enterprise.

Using an existing barn, the retrofitting of a new floor and equipment can be very cost effective. Labor efficiencies are much greater because cows are handled in groups….moving groups of cows to the milking equipment, rather than moving the milking equipment to each individual cow. The milking equipment is also more automated, usually featuring CIP equipment, automatic take-offs, etc…

Lane improvement for bringing groups of cows to milking parlor Lane improvement for bringing groups of cows to milking parlor. This also allows increased herd size without being tied to expanding an expensive building.

With much lower costs per cow, this housing provides everything the cows need. A dry, draft free bedded area, animal restraint when needed, labor efficient feeding and manure removal, and room to grow.

There are many variations to low cost parlors There are many variations to low cost parlors. They can be adapted to many facilities that are otherwise labor intensive and becoming obsolete.

Specialization is another option that small and medium sized dairy farms have gone to. Focusing on fewer enterprises allows for labor efficiencies, a higher level of management, and a better utilization of buildings and equipment.

Summary of Structural Changes Long-Run Growth in Ave. Herd Size (~3%/yr) Two Emerging Sectors Increased Role of “Large” Farms (>200 cows) Management Intensive Grazing (~20% of farms) Role of “midsized” farms (30-100 cows) Dominant Group (2/3 of farms, milk) Either terminal or changing enterprises (i.e. low-cost parlors, specialization)