Yet…” as a fraction of the total revenues that farmers receive if you’re a small scale dairy farmer, they’re still pretty modest.” However, as more small producers turn to robotic milking systems and other innovations, MacDonald suggests… “if robots turn out to work and get widely adopted, they could provide an advantage for smaller farms or slow that rapid shift of production to larger forms that we've seen since.
The trend of consolidation of dairy farms over the last two decades has primarily been steady, as has been the trend of declining small dairy operations over time. Not surprising information within a recent USDA study on dairy industry consolidation. Yet research economist James McDonald says what perhaps could be surprising to those outside the dairy sector.
“Production has been shifting to larger farms. But what we mean by larger is what's really changed over time. Most cows today are on farms with herds of a thousand or more cows. But where the real expansion is going on is in very large herds, places with five to ten thousand or even up to 30,000 cows. In a large site on a dairy farm.” quite a shift compared to just a decade or two decades ago, according to McDonald.
On average, far more larger farms are able to realize scale economies and lower costs. And so the finances of the business have strongly favored them over the years.