A publication of AAEA

A publication of AAEA
America’s Dairy Industry Adapting to Long-Running Structural Pressures

America’s Dairy Industry Adapting to Long-Running Structural Pressures

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America’s Dairy Industry Facing Difficulties from Long-Running Structural Changes

David A. Hennessy and Hongli Feng

The U.S. dairy farming industry has been experiencing continued consolidation and persistent low milk prices in recent years. Papers in this theme examine the current situation, focusing on structure, marketing arrangements and market stresses. Analyses based on farm surveys shed light on individual farmers’ challenges and coping strategies.

Dairy Sector Consolidation, Scale, Automation and Factor Biased Technical Change: Working through “Get Big or Get Out”

Hongli Feng, David A. Hennessy, Yanan Jia, Melissa G.S. McKendree, and Christopher A. Wolf

Consolidation in the U.S. dairy industry, as in other agricultural industries, has long been recognized. Through surveying dairy farmers facing persistently low milk prices, we found a generally negative outlook and an ongoing trend of “get big or get out” characterized by a bias toward capital away from labor.

Does Revenue Diversification Improve Small and Medium-Sized Dairy Farm Profitability?

Curtis L. Mahnken and Joleen C. Hadrich

Dairy farmers are well acquainted with managing volatile input and output prices. This article uses a sample of small and medium-sized Minnesota dairy farms that contribute data to the FINBIN farm financial database and finds that revenue diversification strategies have successfully helped dairy farmers remain profitable in the Upper Midwest.

Regional Values for Milk Are Changing

Mark W. Stephenson and Charles F. Nicholson

The U.S. dairy industry has faced milk price challenges for nearly 4 years. A portion of this price pressure is due to slower export sales, but regional shifts in domestic milk production, demand for dairy products, and transportation costs have also had regional impacts on farm milk checks.

Disorderly Marketing in the Twenty-First Century U.S. Dairy Industry

Andrew M. Novakovic and Christopher A. Wolf

Milk market coordination requires balancing supply and demand daily, seasonally, across the production cycle. Several areas of the US have been struggling in recent years to manage growing milk production without matching processing capacity. The result has been an increasing amount of milk dumped and farm financial stress.

New California Milk Marketing Regulations Will Not Change Economic Fundamentals

Daniel A. Sumner

A new federal milk marketing order (FMMO) covering California began November 1, 2018. Despite a shift from state to federal control and major changes in administrative procedures, the new FMMO is unlikely to change economic fundamentals or the competitive positions of the California dairy farm or milk processing industries.