U.S. milk production is projected to top 220 billion pounds this year as a long-running structural shift puts production in the hands of fewer, but larger, dairies. The USDA said there were 34,187 dairy herds licensed to sell milk in 2019, a drop of 9 percent from the previous year. All but a handful of states lost farms, and the exceptions had relatively small numbers of herds.
“The recent USDA Census shows how the distribution of dairy farming operations has been changing from many small dairy farms to fewer, but much larger, operations,” said USDA chief economist Rob Johansson at the annual Ag Outlook Forum two weeks ago. “The majority of dairy operations have costs of production that are greater than the all-milk price, but the majority of milk production is occurring on operations with costs lower than the all-milk price. Based on this, we would expect to see continued consolidation in the dairy sector.”
California, the largest milk producer, lost 80 dairies, or 6 percent of its farms, and No. 2 Wisconsin lost 780, or 9 percent of its dairy farms from 2018, according to the USDA’s tally of licensed herds, collected from regulatory agencies. California dairy farms tend to be large. Wisconsin has the highest number of licensed herds, 7,720.
The decline in U.S. herd numbers in 2019 was the largest since 2004, according to the American Farm Bureau Federation. “Since the end of 2014, dairy farmers have struggled with low prices resulting from large supplies outweighing demand, in the United States and around the world.”