Hoard's Dairyman article: How the Southeast is different

How the Southeast is different

by C.W. “Bill” Herndon
The author is a professor at Mississippi State University.

Much discussion has been de­­­voted to the decline of dairy farming in the Southeast. Here’s an attempt to describe what occurred between 1995 and 2010 and make projections for the year 2025 using trend analysis.

First, the 12 states specified as the Southeast are Louisiana, Arkansas, Missouri, Mississippi, Alabama, Tennessee, Kentucky, Florida, Georgia, South Carolina, North Carolina, and Virginia. In general, these states have dairy farm sectors that are somewhat similar, with the exception of Georgia and Florida whose dairy farms are three- to six-fold larger than the average Southeast dairy farm.

Using the last 16-year trends, the expected number of dairy farms in the Southeast would decline by 56.7 percent between 2010 and 2025 to only 2,170 operations.

The number of dairy farms usually is the most common statistic policymakers use. Losing dairy operations means farmers and their families are no longer producing milk as a business and their chosen way of life.

Policymakers and farm organizations often focus on declining dairy farm numbers to reveal the distressed economic health and profitability of dairy operations. In most cases, this may be true. However, during the past 40 to 50 years, there has been a significant decline in the number of all farms. This overall trend is a re­­sult of the “industrialization” of U.S. agriculture facilitated through breakthroughs in genetics/hybrids, mechanization, transportation, and chemicals, including agricultural policies.

The decline in dairy farms be­­tween 1995 and 2010 likely has been more severe than other types of farms but is similar in the trend of fewer but much larger dairy operations.

The percentage drop in the number of dairy farms for the Southeast compared to the U.S. has been similar over the past 16 years. The 12 states making up the Southeast have seen 60 percent decline in licensed dairy farms falling from 12,674 in 1995 to 5,010 in 2010 indicating the loss of 7,664. The U.S. witnessed a similar decline. The number of dairy operations fell 52 percent or more than 58,500 farms, from almost 112,000 in 1995 to 53,127 licensed dairy farms in 2010.

Alabama, Arkansas, Kentucky, Louisiana, Mississippi, and Tennessee recorded declines in dairy farms ranging from 70 to 80 percent over this 16-year period. Arkansas experienced the greatest drop . . . 81 percent from 693 to 130 farms between 1995 and 2010. Conversely, Virginia saw the smallest regional decline of only 42 percent, falling from 1,225 to 705 farms between 1995 and 2010, respectively.

The 1995 to 2010 trend was that the number of dairy farms in the Southeast declined at an annual rate of 3.78 percent compared to 3.28 for the U.S. Using these 16-year trends, the expected number of dairy farms in the Southeast would decline by 56.7 percent between 2010 and 2025 to only 2,170 operations, while farms across the U.S. would fall 49.2 percent to 27,000 by 2025. In the Southeast, Arkansas suffered the largest annual rate of decline of 5 percent from 1995 and 2010 indicating only 30 dairies would be remaining in 2025.

Down in milk
My analysis found the percentage change in milk production in the Southeast and the U.S. were dramatically different. The Southeast saw a 37 percent decline in milk output dropping from 16.96 billion pounds in 1995 to 10.61 in 2010. The U.S. experienced a rising trend where the pounds of milk produced grew 24 percent from almost 155.3 billion in 1995 to 192.8 billion pounds in 2010. Alabama, Arkansas, Louisiana, Mississippi, and Tennessee recorded de­­clines in milk output varying from 70 to 80 percent during that time span.
Extending trends would say milk output is forecast to decline by 35 percent in the Southeast between 2010 and 2025 to almost 6.9 billion pounds, while U.S. milk production would grow 23 percent to 236.5 by 2025.

Slower gains per cow
An overview of output per cow discovered that the percentage rise in milk in the Southeast was rather different than the U.S. during the 16-year period. The Southeast enjoyed a 13 percent gain in productivity per cow rising from almost 14,000 pounds in 1995 to 15,840 in 2010. The U.S. saw much stronger growth as milk per cow grew by 29 percent from more than 16,400 pounds in 1995 to almost 21,150 pounds in 2010.

Again, the simple trend analysis revealed that, between 1995 and 2010, milk output per cow rose by 0.84 percent per year in the Southeast, compared to 1.81 percent for the U.S. Using these trends, South east milk productivity is forecast to go up by 13 per cent from 2010 to 2025 to more than 17,800 pounds per cow, while U.S. milk output per cow would swell by 27 percent to almost 26,900.

Milk production per farm could be viewed as a barometer of profitability. I calculated milk per farm by simply multiplying the reported milk output per cow times an estimated number of milk cows per farm (where number of milk cows per farm was estimated by dividing the number of milk cows by the number of dairy farms).

Again, my investigation found the percentage change in milk per farm in the Southeast was considerably different than the U.S. The Southeast observed a 51 percent gain in output per farm, growing from 1.33 million pounds in 1995 to 2.01 in 2010. However, U.S. production per farm saw a jump of 161 percent from almost 1.39 in 1995 to 3.63 million pounds in 2010. Alabama and Louisiana had the smallest increases in milk output per farm growing only 12 to 13 percent over this period. On the other hand, Florida and Georgia enjoyed growth of 85 and 92 percent, respectively, between 1995 and 2010.

Finally, the trend analysis indicates milk per farm from 1995 to 2010 in the Southeast grew at an annual rate of 3.2 percent compared to a rise of 10.1 percent per year for the U.S. Using these 16-year trends, milk per farm is anticipated to grow by 48 percent in the Southeast between 2010 and 2025 to more than 2.97 million pounds, while U.S. milk production is expected to expand 151 percent to 9.12 million in 2025 (3.63 million plus 5.49 million in growth).

Reviewing these statistics revealed many more signs of differences rather than similarities between the Southeast and the U.S., as a whole. This especially is true when realizing that the U.S. data includes the 12 states delineated as the Southeast. The review of these data and simple trend analyses perhaps provides compelling confirmation of argument that dairy farming has evolved much differently in the Southeast as compared to the rest of the nation.

This article appears on page 336 of the May 10, 2011 issue of Hoard's Dairyman