American Dairy Farms Are Gone

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American Dairy Farms Are Gone

Does it become bottled milk? Class 1 priceYogurt? Class 2 PrizeCheddar? Class 3 priceButter or powdered milk? Class 4Traditionally, Class 1 receives the highest price.

Do you know where your milk comes from?Photography: Sue Ogrocki/AP Photo

There are 11 FMMOs spread across the state. The Florida, Southeast, and Appalachian FMMOs focus primarily on Class 1, or bottled, milk. Other FMMOs, such as those in the Upper Midwest and Pacific Northwest, focus more on manufactured products such as cheese and butter.

For decades, farmers have generally received the minimum price. Improvements in milk quality, production, transportation, refrigeration, and processing have increased milk quantities, extended shelf lives, and improved access to products in the United States. The increased supply has reduced competition among processing plants and lowered overall prices.

These production improvements came increase in production costssuch as livestock feed, farm labor, veterinary care, fuel and equipment costs.

University of Tennessee researchers in 2022 compared the price received for milk in all regions against primary production costs:food and labor. The results show why farms are struggling.

From 2005 to 2020, milk sales revenue per 100 pounds of milk produced ranged from $11.54 to $29.80, with an average price of $18.57. For the same period, total costs of producing 100 pounds of milk ranged from $11.27 to $43.88, with an average cost of $25.80.

On average, this means that a single cow producing 24,000 pounds of milk brought in about $4,457. Yet it cost $6,192 to produce that milk, representing a loss for the dairy farmer.

The most efficient farms are able to reduce their production costs by improving cow health, reproductive performance and Feed/milk conversion rateLarge farms or groups of farmers, such as cooperatives like Dairy Farmers of America, can also benefit from futures contracts on grain and future milk prices. Investments in precision technologies such as robotic milking systems, rotary parlors, and portable health and reproductive technologies can help reduce labor costs on farms.

Regardless of the size of the business, surviving in the dairy industry requires passion, dedication and careful business management.

Some regions have suffered greater losses than others, which is largely related to how farmers are paid, i.e. milk classes and rising production costs in their region. certain insurance and coverage programs that can help farmers offset high production costs or unexpected price drops. If farmers take advantage of them, data shows they can works as a safety netbut they do not solve the underlying problem of costs exceeding revenues.

Passing the torch to future farmers

Why do some dairy farmers persist despite low milk prices and high production costs?

For many farmers, the answer is that it is a family business and part of their heritage. 97% of American dairy farms are family owned and operated.

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