Dairy Industry Concentration Continues

WASHINGTON - Sep 26/02 - SNS -- Dairy production in the United States continues to become more concentrated as smaller operations close because of difficulty obtaining income levels necessary to maintain a North American lifestyle.

Reporting on the status of the industry, the USDA said the number of milk cow operations dropped 21% from 123,700 in 1997 to 97,560 in 2001. During this same period, milk cow inventory declined from 9.25 million head in 1997 to 9.12 million head in 2001. Despite the decrease in milk cow operations and inventory, milk production increased 6%, from 156,091 million pounds in 1997 to 165,336 million pounds in 2001, as large operations increased their share of production.

Operations with more than 500 head accounted for 39% of all milk produced in 2001, up from 29% in 1997 (the first year of data for operations with more than 500 head). Conversely, operations with less than 500 head accounted for 61% of total production in 2001 compared to 71% in 1997.

In 2001, operations with more than 500 head accounted for 35% of total milk cow inventory compared with only 24% in 1997. Operations with less than 500 head accounted for 65% of inventory in 2001, down from 76% in 1997. During this same period, the number of operations with more than 500 head has grown from 2,336 in 1997 to 2,795 in 2001, an increase of 20%. The number of operations with less than 500 head decreased from 121,364 to 94,765, a decrease of 22%.

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