Small dairy farms are economically unsustainable vs larger operations.
alephnerd · 1h ago
It's an antitrust problem.
Large operations are killing the ability for small farms to adopt a co-op dairy model as processors are demanding 70% of value add.
Read the article.
FTA:
"Here’s another force reshaping the industry that has nothing to do with immigration: processor consolidation. According to industry analysis, just three major cooperatives—Dairy Farmers of America, Land O’Lakes, and California Dairies—now handle over 80% of the nation’s milk marketing.
These processors need massive, consistent volumes. New processing plants require millions of pounds of milk per day to operate efficiently. From a logistical standpoint, it’s far more efficient to contract with a dozen 5,000-cow dairies than 500 smaller operations.
I was at a dairy conference in Wisconsin last year where a DFA representative candidly admitted: “We’re building plants that need 4-5 million pounds per day. We can’t deal with 200 small farms—we need 10 large ones.”
This “processor pull” creates powerful incentives for farm-level consolidation. I’ve seen it happen firsthand in regions where a new mega-processing plant opens—suddenly, there’s pressure on every farm in the area to either scale up or get squeezed out"
toomuchtodo · 1h ago
I’m okay with small dairies being pushed to close though. Their worker wages are lower (as the article mentions), and we shouldn’t be keeping them around for nostalgia. Humans don’t require bovine milk, it is not a necessity nutritionally. For small operators, this is a hobby, not a stable business with any sort of future longevity. If your identity is wrapped up being a small farmer, that’s unfortunate. Change is constant.
> The data flips the conventional assumption on its head. Large farms that employ the most immigrant workers are actually paying higher cash wages, not lower ones. Recent analysis shows median wages for dairy workers increased 33.7% between 2019 and 2022, far outpacing the national median wage increase of 7.4%. These wage increases are happening primarily on the large-scale operations that dominate milk production.
Large operations are killing the ability for small farms to adopt a co-op dairy model as processors are demanding 70% of value add.
Read the article.
FTA:
"Here’s another force reshaping the industry that has nothing to do with immigration: processor consolidation. According to industry analysis, just three major cooperatives—Dairy Farmers of America, Land O’Lakes, and California Dairies—now handle over 80% of the nation’s milk marketing.
These processors need massive, consistent volumes. New processing plants require millions of pounds of milk per day to operate efficiently. From a logistical standpoint, it’s far more efficient to contract with a dozen 5,000-cow dairies than 500 smaller operations.
I was at a dairy conference in Wisconsin last year where a DFA representative candidly admitted: “We’re building plants that need 4-5 million pounds per day. We can’t deal with 200 small farms—we need 10 large ones.”
This “processor pull” creates powerful incentives for farm-level consolidation. I’ve seen it happen firsthand in regions where a new mega-processing plant opens—suddenly, there’s pressure on every farm in the area to either scale up or get squeezed out"
> The data flips the conventional assumption on its head. Large farms that employ the most immigrant workers are actually paying higher cash wages, not lower ones. Recent analysis shows median wages for dairy workers increased 33.7% between 2019 and 2022, far outpacing the national median wage increase of 7.4%. These wage increases are happening primarily on the large-scale operations that dominate milk production.