Report on Dairy Industry in Iowa

1

• Dairy Marketing
• Dr. Roger Ginder
• Econ 338a
• Fall 2007
• Lecture 4

2
GENERAL PRODUCTION SYSTEMS

• Tie stall or stanchion
• Traditional
• Modern (humid climate)
• Modern (free stall/dry lot)
• Rotational grazing

3
DAIRY PRODUCTION METHODS AND FACILITIES

• Milking Parlors
• High Capacity
• Many use 3X milking schedule
• Operate more or less continuously 24/7
• Large bulk tank capacity geared to tanker pickup

4
(No Transcript)
5
(No Transcript)
6
(No Transcript)
7
(No Transcript)
8
(No Transcript)
9
(No Transcript)
10
(No Transcript)
11
DAIRY PRODUCTION METHODS AND FACILITIES

• Manure Handling in Modern Free Stall Operations
  in the Arid Areas
• More Water is used than in drylot
• Flush Water Has to be Managed

12
(No Transcript)
13
(No Transcript)
14
(No Transcript)
15
(No Transcript)
16
(No Transcript)
17
(No Transcript)
18
(No Transcript)
19
(No Transcript)
20
(No Transcript)
21
DAIRY PRODUCTION METHODS AND FACILITIES

• Advantages Free Stall
• Low labor
• Cow comfort and high milk quality
• Capital cost/cow 3,300 - 3,600 (including cow
  and land)
• Expansion is more practical

22
DAIRY PRODUCTION METHODS AND FACILITIES

• Problems
• Large size and scale requirements to reach low
  per cwt.average costs
• Manure handling in humid climates
• Oder Control in warmer months
• Freezing can create problems during winter
  months in UMW
• Limited time window for manure application
  requires storeage

23
DAIRY PRODUCTION METHODS AND FACILITIES

• Modern dry lot system (in arid and semi arid
  areas
• Confinement in paddocks (open)
• Dry manure waste management
• Modern parlors

24
(No Transcript)
25
(No Transcript)
26
DAIRY PRODUCTION METHODS AND FACILITIES

• Advantages
• Low labor cost
• Capital cost/cow - 3,000 (include cow and land)
• No investment in free stall (850/cow)
• Problems
• Large scale requirements
• Climate limitations in some areas
• Heat can reduce production
• Unusually wet conditions some years

27
DAIRY PRODUCTON METHODS AND FACILITIES

• New Zealand rotational grazing system
• Paddocks of high grade pasture
• Rotated grazing
• Little/no concentrates fed
• Advantages
• Low concentrate feed cost
• Less labor and machinery for forage production
• Low housing costs

28
DAIRY PRODUCTON METHODS AND FACILITIES

• Problems
• Lower production of milk per cow
• Muddy seasons can be a problem
• In cold climates, some of the advantages in
  housing and forage are lost

29
DAIRY PRODUCTON PLANT CHARACTERISTICS

• Approximately how much of the total milk supply
  is produced in the various production systems?
• How do farm numbers and production relate?

30
DAIRY PRODUCTON PLANT CHARACTERISTICS

• Earlier data showed greatly reduced farm numbers
  over the past 20 years
• In addition the industry is becoming much more
  concentrated
• Concentration analysis is useful in understanding
  the dynamics of the U.S. dairy industry

31
U.S. Dairy FarmsPercent of Operations vs.
Percent of Milk Productionfor Various Herd
Sizes, 2001
Percentages may not add to 100 due to rounding.
Source NASS, USDA, on-line database, 5/20/02
32
U.S. Dairy FarmsPercent of Operations vs.
Percent of Milk Productionfor Various Herd
Sizes, 2006
Percentages may not add to 100 due to rounding.
Source NASS, USDA, on-line database, 3/21/05
33
DAIRY PRODUCTON PLANT CHARACTERISTICS

• Concentration has long been lower in the East and
  Midwest than in the West
• The East has been slightly more concentrated than
  the Midwest
• The Midwest has been among the least concentrated
  regions

34
New York Dairy FarmsPercent of Operations vs.
Percent of Milk Productionfor Various Herd
Sizes, 2001
Percentages may not add to 100 due to rounding.
Source NASS, USDA, on-line database, 5/20/02
35
New York Dairy FarmsPercent of Operations vs.
Percent of Milk Productionfor Various Herd
Sizes, 2006
Percentages may not add to 100 due to rounding.
Source NASS, USDA, on-line database, 3/23/05
36
New York Dairy FarmsPercent of Operations vs.
Percent of Milk Productionfor Various Herd
Sizes, 2006
Percentages may not add to 100 due to rounding.
Source NASS, USDA, on-line database, 3/23/05
37
Iowa Dairy FarmsPercent of Operations vs.
Percent of Milk Productionfor Various Herd
Sizes, 1999
Source NASS, USDA, Milk Production, 2/16/2000
Percentages may not add to 100 due to rounding.
38
Iowa Dairy FarmsPercent of Operations vs.
Percent of Milk Productionfor Various Herd
Sizes, 2001
Percentages may not add to 100 due to rounding.
Source NASS, USDA, on-line database, 5/20/02
39
Iowa Dairy FarmsPercent of Operations vs.
Percent of Milk Productionfor Various Herd
Sizes, 2006
Percentages may not add to 100 due to rounding.
Source NASS, USDA, on-line database, 3/23/05
40
Iowa Dairy FarmsPercent of Operations vs.
Percent of Milk Productionfor Various Herd
Sizes, 2006
Percentages may not add to 100 due to rounding.
Source NASS, USDA, on-line database, 3/23/05
41
California Dairy FarmsPercent of Operations vs.
Percent of Milk Productionfor Various Herd
Sizes, 2001
Percentages may not add to 100 due to rounding.
Source NASS, USDA, on-line database, 5/20/02
42
California Dairy FarmsPercent of Operations vs.
Percent of Milk Productionfor Various Herd
Sizes, 2006
Percentages may not add to 100 due to rounding.
Source NASS, USDA, on-line database, 3/23/05
43
DAIRY PRODUCTON PLANT CHARACTERISTICS

• Would you expect these trends toward more
  concentrated production to continue?
• What factors might tend to make the trends
  continue?
• What factors might tend to slow the trends?

44
DAIRY PRODUCTON PLANT CHARACTERISTICS

• Differences in input procurement practices exist
  among
• Production systems
• Regions
• Scale of operation

45
DAIRY PRODUCTON PLANT CHARACTERISTICS

• Midwestern tie stall and traditional systems
• Home produced forage and grain
• Purchased concentrates
• Diversified farming operations
• Often combined with non-dairy enterprises
• Significant management and capital invested in
  land /non-dairy activities

46
DAIRY PRODUCTON PLANT CHARACTERISTICS

• Mid Atlantic and Piedmont areas tie stall,
  traditional and modern operations
• Significant home produced forage and grain but
  some purchased
• Purchased concentrates
• Specialized dairy operations
• Management and capital more focused on dairy and
  related activities

47
DAIRY PRODUCTON PLANT CHARACTERISTICS

• Western modern and drylot operations
• Few home produced feedstuffs
• Associated input services purchased
• Some diary enterprise activities are outsourced
• Almost all of the capital and management focused
  directly on milk production

48
Questions?