What is Going on in Some of the Traditional Dairy States? By Bob Cropp Dairy Marketing an Policy Specialist University of Wisconsin-Madison

A brief look at: Existing dairy farm structure Changes in: Dairy farms Milk cows Milk per cow Milk production Potential in traditional states

Change in milk production New Mexico Idaho California Arizona Kansas Colorado Vermont Pennsylvania Washington Maine % Change Largest Per Capita Increases 1990 to 2000

Percent Change In Per Capita Milk Production 2000 vs Percentage Changes Decreasing(34) Increasing(14)

Continued.

IN U.S

KS , NE ,

IN , U.S ,

So What ? Milk production will continue to grow in the West, but at a slower rate and mainly by adding cows. Milk production declines may slow in some traditional dairy states and in fact, begin to increase within 5 years as a result of slowing the decrease in cow numbers, an increase in milk per cow and an increase in herd size Milk production will increase in other states like NE and KS, with newer large herds.

Reasons for some optimism for traditional dairy states: Cost of production data demonstrates that modern style large dairies located in WI, MN, IA, NY, PA and others can compete with those in the West, and more of these will locate here—how many depends upon whether the states want them. Smaller herds—50 to 99 cows—can make changes at affordable cost to grow to the 100 to 200 size and at a very competitive cost of production.

It depends upon whether the 50 to 99 cow herds are willing to abandon traditional “barn-based” dairy systems in favor of “parlor-based” systems. Until recently, moving to a parlor-based system was costly---$250,000 + for cows. Recently, thinking outside the box has resulted in parlor-based systems at much lower costs--- $50,000 to $100,000---for herd size of about 125 cows.

Low cost parlor-base systems: Remodel existing barn and place parlor in them These parlors are nearly as efficient as brand new parlor set-ups Primary pay-off is labor savings---double eight parlor system allows one person to milk 100 cows in about 2 hours versus almost 5 hours with a stall barn system. Works well for about 125 cows, about twice the average herd size now in MN, WI and IA

There are several of these low cost parlors now in operation in Wisconsin. The word of mouth is growing of successes. Both MN and WI have state funds available for business plans Wisconsin has a new milk volume loan program— low cost loans up to $1 million, if add cows.

It is very possible that within 5 to 10 years, the increase in cow numbers and milk production of herds of 100 plus cows in WI and IA and maybe MN will Offset the decline in cow numbers and milk production from continued exiting of herds of less than 100 cows. This may apply to some other traditional dairy states—NY and PA, for example.

Wisconsin Dairy Industry Production Factors Herds less than 50 cows Number of cows Total milk (Bil. Lbs) Milk per cow , % % 13, , % % 15,531 Herds 50– 99 cows Number of cows Total milk (Bil. Lbs) Milk per cow 678, % % 14, , % % 16,278 Herds of 100 cows + Number of cows Total milk (Bil. Lbs) Milk per cow 337, % % 17, , % % 18,617 All herds Number of cows Total milk (Bil. Lbs) Milk per cow 1,543, % % 14,804 1,292, % % 17,305

Estimated annual growth rates, Wisconsin herds: (What has been occurring since 1993) Herds of less than 50 cows: Number of cows % Milk per cow 2.15% Herds of 50 to 99 cows: Number of cows % Milk per cow 1.33% Herds of 100 cows or more: Number of cows 7.34% Milk per cow 1.54%

Forecast Cows, Milk Per Cow, and Total Milk, 2010, if Trends Hold Factors Forecast Herds of less than 50 cows: Cows Milk per cow Total milk (Bil. Lbs.) 110,462 19, Herdsof 50 to 99 cows: Cows Milk per cow Total milk (Bil. Lbs) 356,930 18, Herds of 100 cows or more: Cows Milk per cow Total milk (Bil. Lbs.) 1,077,194 21, All Herds: Cows Milk per cow Total milk (Bil. Lbs.) 1,544,586 21,

Will these forecast come true? Most likely not exactly; but It depends Environmental regulations State and county regulations on animal units State assistance—financing, business planning Producer to producer encouragement Attitude—stop blaming all problems on federal orders and dairy policy These traditional dairy states have some real pluses for milk production---feed, climate, infrastructure