Decline in dairy operations

USDA's National Agricultural Statistics Service’s monthly Milk Production report, released on Feb. 20, showed the largest annual decline in the number of licensed dairy operations since 2004. Since the end of 2014, dairy farmers have struggled with low prices resulting from large supplies outweighing demand, in the U.S. and around the world. While we have historically seen year-over-year declines in the number of dairy operations, the data from 2019 shows this challenging price environment proved to be too much for many operations throughout the country.

Dairy Herd and Milk Production

The report showed that annual milk production in the United States in 2019 was 218.4 billion pounds, increasing 0.4% from the 217.6 billion pounds produced in 2018. Milk production in the U.S. has grown every year over the past decade, but that growth has somewhat leveled off the last few years. 2019 year-over-year growth represents the slowest growth since 2013, when production grew 0.3% from 2012. Over the past few years, we have also seen a pullback in the number of milk cows in the U.S., with 2019 averaging 9.34 million head, down 0.7% from 2018.

NASS’ most recent monthly Milk Production report showed the largest decline in the number of licensed dairy operations since 2004, and the largest year-over-year percentage decline registered since 2003, when the data was first collected. Much of this was driven by large supplies outweighing demand and pushing prices down. While year-over-year declines in operations are nothing new, the striking increase in the loss of dairy farms in 2019 shows this challenging price environment proved to be too much for many operations throughout the country.