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Monday, November 16, 2009

South Dakota Dairy Historical Trend: Get Big, or Get Out

Earl Butz lives, family farms die...

While reading up on cow poop over breakfast (and how's your morning so far?), I learned that South Dakota was first in the nation during Q3 2009 in percentage increase in number of cows and milk production. Last quarter we had 95,000 milk cows, which gets us back up to where we were in 2000, up from a low of 79,000 in 2004. We're still 19th nationally in volume of milk production and 13th in per-cow production.

Too bad more South Dakota dairies aren't able to share in this rebound. According to the USDA National Agriculture Statistics Service, South Dakota had 20,500 dairy operations in 1965. That's over 300 per county. One family running each operation—that's easily double the current population of Brookings, able to make some portion of their living milking cows.

Since then, the number of dairy operations has decreased at an annual rate of about 8%. In 2007, the number of dairy operations in South Dakota was 660.

click chart to enlarge

"Get big or get out" rules the industry now. The only size of operation showing any recent growth are operations with over 500 head. In 1998, 10 such big dairies accounted for 12% of South Dakota's dairy production. In 2007, 35 such operations accounted for 57% of that production.

click chart to enlarge

Part of this is ugly market reality, but part is also the big-ag mindset in Pierre, where our state government continues to hand out favors to the tiny minority of big operators and lets small family farms die.


  1. I recall the days of milk cows on many farm sites. I grew up on a 100 cow registered holstein dairy farm. A hard life but a good life. As I drive our countryside today, here as well as into Minnesota I hear the echoes of days gone by. I can visualize an entire family being involved with the dairy cattle. I have four sisters, so the seven of us (including Mom and Dad) were always together. Great memories. Wayne Pauli of Madison here...

  2. Cory, Thanks for blogging about the statistical X that South Dakota is experiencing in our dairy production. It has long been apparent that our state leaders believe cow numbers are more important that dairy farmer numbers in South Dakota.
    I believe this is a mistake and family farmers are more important for our state's future and the future of our local communities.
    The saddest thing is how glib our leaders are about the loss of these farmers taking. Basically spreading the message that family dairy farmers must go the way of the buggy whip in order to make room for progress.
    Thanks again.

  3. Michael Black11/16/2009 4:02 PM

    Cory, take a look at that graph. It's not flattening out like it should as numbers continue to drop. This is going to get ugly.

    We had cows growing up. We had many friends that milked. None do now.

  4. Part of the "get big or get out" with dairy is that milk processors are reluctant to make pick-ups at smaller dairy farms, and will terminate contracts with dairy farms that are not large enough to merit the trip.

    The infrastructure small dairies need to hold, homogenize/pasteurize, package, and market their product (along with the licenses and inspection fees needed to do these things) are often very far out of their reach.

    It's too bad--fresh milk is amazingly good, and a lot of people can tolerate it better than the mass-produced product on most grocery store shelves. You can sell raw milk directly from the farm, but if your farm isn't close to a good-sized population center, sales won't be good.


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