Wisconsin still leads in dairy farms and cheese, but gave the milk production title to California in 1993, nearly 20 years ago. What will the next few years bring?
by Lucas Sjostrom, Hoard's Dairyman Associate Editor
Change is inevitable. It's a fact of life. But some changes can be prevented.
The change that occurred in 1993, when Wisconsin was passed by California in milk production, probably could not have been stopped. The speed of California's acceleration broke through Wisconsin's high-water mark and never looked back.
Mark Stephenson, director of dairy policy analysis at the University of WisconsinMadison, shed light on this and other trajectories of the past and present in a seminar titled "The Future of Dairying in Wisconsin" at Northcentral Technical College in Wausau, Wis., yesterday (October 30, 2012).
Stephenson opened his presentation by helping the dairy producers, lenders and industry associates in attendance understand that Wisconsin hasn't always been the dairy state. Just over 100 years ago, Wisconsin was a great wheat state while Iowa held the dairy title. While everyone focuses on California's overtaking of Wisconsin, few remembered that Wisconsin passed New York to take the milk production title many years ago.
In the early 1990s, as California approached Wisconsin, Stephenson remembers producers in Wisconsin looking for reasons why to blame California. The "unfair advantage of irrigated alfalfa" and the milk price were the big problems decried by producers just 25 years ago. Today, ownership of land and milk price are the two things that would help California dairy producers most.
Peering beyond 2012, Stephenson looked to continued processor consolidation, continued improvements in milk per cow and more producer consolidation as trends that will keep on coming.
Processors have quickly moved from over 5,000 plants in 1975 to just 1,700 in 2011. Stephenson said that economies of scale are still being perfected in the processing industry, but at some point the plant becomes too large for its milk shed due to transportation costs. Other than that hindrance, there isn't much to stop us from seeing more mergers and bigger plants.
Milk per cow has been on a linear growth line since it began being recorded. Stephenson, noting he is not an animal scientist, did not see that trend of improvement slowing down. "We're no where near being done with this," Stephenson said of the accomplishments in the past 100 years. He credited 50 percent genetics and 50 percent management as the reasons for the continued 2 percent gain in this category.
Finally, Stephenson pushed the crowd hard to think about economies of scale for the individual farms. He sees the trend of less farms continuing. But, Stephenson explained, this line is not linear, unlike the milk per cow farm. Our national dairy farm losses should slow in terms of the percentage of farms remaining.
Where do you think Wisconsin will be in 20 years? Stephenson and the crowd agreed that, at least for today, Wisconsin has many factors leaning in its favor. Climate, one of the factors most outside human control, was the one big thing Stephenson thought could hold back an otherwise promising future for the state's dairy industry. But unless that or another "black swan" type event happens, Stephenson thought the state should have no problem breaking through the 30 billion pounds of milk by 2020, a goal set by Governor Scott Walker earlier this year.
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