What influences a producer’s decision to relocate a dairy

Hoard's Dairyman: 

What influences a producer’s decision to relocate a dairy

Date: 
Fri, 01/03/2014

Of the 110 factors studied, 13 ranked as the most important factors at locating a new dairy. For many years, the West ranked high on many of them.

by Margaret Seiler

It is no secret to those involved in the dairy industry that the cows are moving West. According to Normand St-Pierre, professor of dairy management at The Ohio State University, the movement of cows is evident in the raw numbers.

"The West and Southwest now account for 42 percent of the national milk production, which is up from 17 percent in 1970," said St-Pierre during his presentation at Kansas State University's Dairy Symposium on October 23. Symposium attendees heard St-Pierre present the findings of an Ohio State University research study that identified factors influencing where new dairies are located.

Dairy producers and agribusiness professionals were asked about the role 110 factors might influence a producer’s decision to relocate. The factors were grouped into 13 decision categories and the results showed that economics was a significant factor in location selection.

These 13 decision categories are ranked from most important to least by those surveyed.

  1. Cash flow
  2. Capital expenditure
  3. Tax structure and incentives
  4. Waste and nutrient management
  5. Utilities
  6. Natural resources
  7. Regulatory environment
  8. Transportation
  9. Value-based community attributes
  10. Labor
  11. Markets
  12. Community attributes
  13. Infrastructure

The surveys showed that most of the concern in relocating was income and expense related, but St-Pierre said the most important single factors (outside of the 13 categories) were availability of fresh water, availability of land for nutrient management and average price of milk.

So where is the perfect location?

St-Pierre said there is no one perfect site, but there are areas that are more preferred based on long-term competitive advantages that will allow for low costs and high revenues.

Maggie's blog footer
The author grew up on her family’s 120-cow Kansas dairy. She is a junior at Kansas State University majoring in agricultural communications and animal science.

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