Farm Journal's latest State of the Dairy Industry report says the industry is shifting to focus on components, instead of total pounds of milk. Driven in part by increased protein consumption, producers are strategically adjusting the cows’ feed to get more fat and protein.
However, despite this higher efficiency, only 61% of producers saw a profit, according to Farm Journal's survey. Factors contributing to low profitability are high input costs and unstable milk prices.
The cost of land is listed as the top challenge to growth, with "inflation/cost of materials to expand" in second place.
Labor is the third biggest challenge to growth for the industry. Twenty-eight percent of producers agree that it is difficult to retain labor, and 30% need resources to help. To combat this issue, they are increasing use of flexible schedules, overtime and time-off benefits.
Another challenge dairy producers face is burnout. “No money, no fun. Nobody wants to keep milking cows,” one respondent in the report said.
Cut through the clutter! We deliver the news you need to stay informed about farm, food and rural issues. Sign up for a FREE month of Agri-Pulse here.
Despite these challenges, 45% of producers are planning to expand their operations over the next five years. The report cites the “resilience” of the dairy farmer as motivation for continuing to produce in these conditions. However, 25% plan to retire in that five-year period. Only 4% of producers are planning on dispersing their herds and exiting the industry.
A promising income stream for many dairy producers is beef-on-dairy, where beef bulls are crossed with dairy cows. Fifty-six percent of producers currently breed beef-on-dairy, and 11% plan on implementing it within the next three to five years. The beef-on-dairy industry is becoming more data-driven, and producers are expected to keep health records of the cattle for feedlots and meatpackers.
Carbon credit usage has stalled. Only one in five dairy producers currently participate in carbon credit programs because “they just don’t believe the check justifies the headache,” the report says. But 55% of producers are practicing sustainability measures, notably when it makes them more efficient.
Phil Plourd, an insights adviser at Ever.Ag, concluded the report noting, “given historical resilience and at least some light tailwinds, I’m confident this will be at least an OK year for dairy producers and the larger industry.”
