Introduction: Trends in the Dairy Industry

1
Introduction Trends in the Dairy Industry

• Dairy Cattle Technology
• AVS346

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Issues Facing the Dairy Industry

• Animal rights
• Public image of factory farming
• Food safety
• Manure management
• Animal product dietary concerns
• Decreasing profitability and sustainability
• Milk supports and pricing
• Competition with nondairy products
• Hormones, antibiotics and pesticides
• Biotechnology

3
Future?

• Grazing systems on marginal crop land
• CLAs (Conjugated Linoleic Acid)
• Anticarcinogen
• Milk found to prevent osteoporsis, hypertension
  and heart disease
• Genetically modified dairy cows
• Drugs and alter milk composition
• Valuable milk fractions such as antibodies,
  lactoferrin etc.

4
What is the Image of Milk?
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Milks Image

• Staple food item
• Purchased frequently
• Natures most perfect food
• Wholesome, fresh, pure
• Milks image translates into the dairy industrys
  image.

6
Milk The Reality

• Bulky - 87 Water
• Trucking costs
• Highly perishable
• Refrigeration
• Regional markets
• Limited export possibilities
• Flexible uses
• High potential for disease transmission
• Easily sampled and tested
• Lower profit margins compared to soft drinks and
  margarine

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The Dairy Cow

• Milk is easy to harvest
• Very high quality protein
• Nearly as efficient at converting energy and
  protein as chickens
• Can convert poorer quality feeds to milk
• Forages, by-products,urea
• Witter Center cows produce 24,000 lb. of milk
  each or 730 lb. of protein

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History of the Dairying

• Goes back to 6000 to 8000 B.C. in Mesopotamia
• First written records of milking cows - 6000 B.C.
• First picture a Sumerian mosaic 3100 B.C.
• Shows milking cows and filtering milk, calf
  placed in front of cow to stimulate letdown
• Egypt 3000 B.C. butter and cheese were used
• Greeks and Romans 1000 B.C. cheese became an
  important part of the diet - Storage
• Biblical references of the Land of Milk and
  Honey
• Scandinavia - 8th century a mainstay of diets

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US Dairy History
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Cattle in the US

• Jamestown (1611) and Plymouth (1624) Colonies
• 1700-1850
• Development and importation of modern breeds
• Everyone had one
• Dual purpose
• First cheese plant - 1851
• Gail Borden received patent for condensed milk -
  1856
• Maine Jersey breeders formed first US breed
  association - 1860
• Pasteurization invented - 1860s
• Delaval invented the cream separator 1871
• William Dempster Hoard published the Hoards
  Dairyman - 1885
• Babcock developed method to measure butterfat -
  1890
• Milking machine invented by Alex Giles of
  Australia - 1903
• Rural electrification enabled the use of vacuum
  pumps and machine milking 1920-1930s
• Bulk tanks used to store milk rather than cans -
  1960

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World Dairy Industry
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How Big US Dairy Industry?
U. S. Data
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U.S. Spending on Dairy Products

• 10.7 of income is spent on food
• 13 of the food budget is spent on dairy products
• 1.4 of U.S. income is spent on dairy products
• The average American consumes the equivalent of
  587 lbs. of milk annually or 1.6 lbs./day

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US Milk Products Per Capita Consumption
International Dairy Foods Association
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2006 Milk Supply Utilization by Product
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Milk Equivalent Consumption1910-2005
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Dairy Trends
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Number of Dairy FarmsMaine - 1945 - 2008
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Milk Production per CowMaine 1925 - 2008
National Ag Statistics Service Data
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Muranda Oscar Lucinda-ET Marathon, WIWorld
Record Holder November 199767,914 pounds milk 2x
365-day
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Brigeen Convincer Rhonda-ET Ex 95 DOMBrigeen
Farms, Turner, ME4-10 365d. 66,420 4.3 2839 2.9
1943 - National Record
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Milk Price Received by Maine Producers1970 - 2009
NASS Statistics
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Number of Milk Cows in Maine1925 2008
(Thousands)
National Agricultural Statistics Service Data
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Top States - Total Milk 2006( change 2005-2006)

• 1. California - 38 Billion (3.4)(1.2B)
• 2. Wisconsin -23 Billion (2.3)
• 3. New York - 12 Billion (-0.3)
• 4. Idaho 11 Billion (7.2)
• 5. Pennsylvania - 11 Billion (2.3)
• 6. Minnesota 8 Billion (2.1)
• 32. Maine 0.57 Billion (-3.5)
• US - 2.0

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Top State - Milk per Cow

• Colorado - 23,155
• Washington - 23,055
• Arizona - 22,855
• Idaho 22,326
• Michigan 22,188
• California - 21,815
• New Mexico - 21,515
• 28. Maine 17,938

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Percent of Total Milk Producedby Region (1996 to
2006)
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Western Competition
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(No Transcript)
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Why the Western Shift?

• Climate
• Less housing facilities
• Fewer pollution problems (run off)
• Forage Quality and Availability
• High Production Potential
• Lower Cost of Production
• Transporting products longer distances
• Following Population Shift

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Eastern Advantages

• Milk Deficit Area
• Proximity to Large Markets
• Reduced distances
• Diversity of markets
• Fluid Utilization
• Water Availability
• Availability of Pasture
• Land Prices in Rural Areas

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New England Dairy Industry

• 4 of National Production
• Except for VT, states are net importers of milk
• Dairy makes up large percentage of agricultural
  receipts
• 700 Million Industry
• Public supportive of dairy farming
• State milk subsidies
• Problems with urban sprawl

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New England Dairy Production
NASS Data 2006
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Maine Farm Cash Receipts
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Maine Dairy Industry

• Predominantly small family farms
• 100 cows/herd
• Undeveloped capacity to produce milk
• Importer of dairy products
• Especially cheese
• Large percentage of organic producers
• 20 - Highest in nation (only 10 of milk)
• Increasing number of artisan cheese producers
• High utilization of milk for fluid products
• Higher than average milk prices
• Maine Milk Commission State subsidy - Maine
  MILC
• Few processors and handlers Little competition
  for milk
• Lack of infrastructure
• Equipment, structures, consultants, vets, feed
  companies, ag lenders etc.

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Top Maine Dairy Counties