My May 23 Industry At A Glance discussion featured newly released USDA 2012 Ag Census data; specifically, the change in structure of U.S. beef cow operations over time. That graph depicted how the decline in the number of cow-calf operations in the U.S. has predominately occurred within the category of operations maintaining 1-49 beef cows.

A similar pattern has also occurred within the dairy industry. That’s most telling when comparing Ag Census data in 2012 vs. 2007.  Overall dairy sales were approximately $31.7 billion in 2007 vs. $35.3 billion in 2012 (a difference of $3.6 billion). What’s important, though, is the change in sales mix during those five years.

Dairies with 1,000-2,499 and 2500+ cows increased sales by $1.6 billion and $3.3 billion, respectively. Meanwhile, those dairies milking less than 100 cows and those milking 100-499 cows decreased sales by $680 and $615 million, respectively. In total, the larger dairies, while still only 3% of total farms, now account for 52% of all sales (vs. only 41% in 2007).

As noted previously, consolidation is an enduring theme across all of agriculture. That occurs because both sides of the profitability equation are squeezed with smaller operations. That is, fixed costs are inherently higher – smaller operations have less ability to dilute that over a greater number of cows. Perhaps what’s especially important in the dairy industry is larger operations’ ability to effectively implement new technologies in a meaningful way. 

Subscribe now to Cow-Calf Weekly to get the latest industry research and information in your inbox every Friday!

While the structure of the dairy industry doesn’t directly impact the beef industry, U.S. dairy farms serve as an important component for the beef complex. How do you perceive changes in the dairy industry and the long-term impact on the beef industry? What impact might ongoing consolidation within the dairy industry have on the beef industry in the future?

Leave your thoughts in the comments section below.

You Might Also Like:

10 Resources To Ensure You Get More Cows Bred

30 Photos Honoring Ranch Moms

10 Ways You Know You Are At A Country Wedding

Fixing Fence? Avoid These 7 Common Fencing Mistakes