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How consolidation is reshaping the future of the U.S. dairy industry

The senior dairy analyst with Terrain says the expansion of large-scale dairy farms is changing the structure of the industry.

Ben Laine says there are fewer farms but more milk is being produced. 

“If you can milk more cows and spread out your overhead costs across a larger herd, you tend to have a lower cost per 100 weight of milk production,” he says. “It’s a way to manage your costs. A lot of farms have seen pretty big benefit to doing that in order to protect themselves from volatility.”

He tells Brownfield it’s impacting the market.

“We might see a couple more years of high prices followed by longer troughs and lower prices because those large farms aren’t responding to the month-to-month milk price,” he says. “As a result, the broader US milk supply is not as responsive to milk price movements as it has been in the past.”

Laine says producers will likely need to find new ways to add value and improve efficiency to continue to stay profitable in the future.

AUDIO: Ben Laine, Terrain