This past year we dug into our membership data to look at how consolidation was impacting Idaho’s dairy demographics. What we found raised eyebrows within both our staff and board.
Like many other dairy states, we are seeing consolidation, and it appears to be at an accelerating pace. However, we don’t seem to be losing dairy farms at the pace other states are seeing, but we are losing a number of dairy owners.
What we found
In 2019, Idaho was home to 437 dairy facilities controlled by 304 owners/partnerships. Dairymen owning multiple facilities is becoming more and more common among our members.
Of those 304 dairy owners/partners, 91 milked more than 1,500 cows, representing 85% of Idaho’s milk production. That means 213 milked fewer than 1,500 cows and represented only 15% of Idaho’s production.
Digging a bit deeper, the 10 largest owners/partners milked 32% of Idaho’s cows and the largest 20 herds milked 47%!
What is our takeaway?
First, financial stress is still the No. 1 cause for Idaho dairymen to exit the business. There is something else going on and beginning to be talked about by members that is worth noting.
We commonly hear “the dairy business is not as enjoyable as it used to be.” This is playing into decision making as farmers debate continuing operations or selling to a neighbor. When probed as to what is taking the fun out of the business, they added the culprit was expectations of how milk is to be produced.
If you follow the narrative of the dairy consumers and customers creating additional demands of the industry, larger farms are believed to be less desirable than smaller farms. They believe that larger farms somehow don’t do as good a job of being stewards, so practices need to be standardized, made mandatory, and verified.
Singularly, these new expectations don’t seem to be significant, but when you add them together, they create noticeable additional to costs, time, and stress, particularly for our smaller and medium size dairies.
We are curious to see at what point these same, expectant consumers realize that their efforts have become one of the primary catalysts of the consolidation of the dairy industry.