Minnesota dairy industry growth is steady despite challenges

A new study by the Minnesota Department of Agriculture (MDA) shows Minnesota’s dairy industry achieved steady growth from 2005 to 2008, after years of decline in the early 2000s.  The annual growth rate averaged 2% from 2005 to 2008, closely following the national trend.  Minnesota is the sixth largest dairy state in the U.S., contributing 5% of the U.S. total milk production.

The study, conducted by MDA’s Agricultural Marketing Services, shows the industry generated $1.7 billion in cash receipts or 24% of the state’s total livestock marketing.  In 2008, milk prices received by Minnesota growers averaged $19.08/cwt., a second historical high.  However, milk prices saw significant declines early this year, averaging $12.60/cwt. in the first four months – the lowest level since 2002.

The study shows dairy exports also increased.  As the fifth largest dairy exporting state in the U.S., Minnesota reached a record-high of $113 million in dairy exports in 2007, a 22 percent increase from the previous year.  Since 2000, dairy exports have grown by 61%.  Dairy is one of the fastest growing export sectors in Minnesota agriculture.

Many large dairy states have seen decreases in cow numbers in the past decades; Minnesota, however, has achieved increases in cow numbers from 2005 to 2008, a four-year growth trend after long periods of decline.  In Minnesota, milk yield per cow increased 34% from 1990 to 2008, from 14,000 pounds to 19,000 pounds.

The study also shows Minnesota’s dairy industry has far-reaching economic impacts on many economic sectors across the state, including crop production for feed, dairy processing and food manufacturing, supply and services, transportation, distribution and marketing.  The total economic impact generated by Minnesota’s dairy production and processing brings $9 billion in total output and supports more than 39,000 jobs.

View the study online at www.mda.state.mn.us/news/publications/animals/MNDairyIndustry2009Update.pdf