Representing a dairy and agricultural cooperative with a large presence in three major U.S. milksheds – the Northeast, Upper Midwest and West – Kappelman has an ear open to local, regional and national dairy voices. One emerging theme he’s hearing is: The dairy industry is not attending a wake in preparation for its own funeral, but rather awakening to “opportunity.”
“Without question, the dairy industry has suffered headwinds over the past several years, and we are extremely disheartened to see the number of farms that have gone out of business,” Kappelman said.
While members in each of his co-op’s three regions face obstacles unique to their area, they all face challenges related to oversupply, market access and near-catastrophic weather. Additionally, they are all affected by broader policy issues such as trade, labor and regulation.
Dairy has gone through a difficult time, and plenty of folks – especially those with anti-dairy agendas – are writing obituaries. You’ve all seen the headlines. The cause of death is declining dairy consumption (which you’ll see below isn’t true), leaving behind lost dairy farms and bankrupt dairy companies.
The USDA’s latest estimates put the number of commercial dairy farms at 34,187 in 2019, down 8.8% from the 37,486 dairy farms in 2018. For some, the personal toll has been even higher.
But not all the numbers are bad. First, 2019 milk prices were the highest since 2014 and are forecast to move higher in 2020. A strong finish helped propel the value of 2019 U.S. dairy product exports above $6 billion for the first time since 2014.
And while much of the negative narrative concerning dairy consumption is focused on fluid milk, overall 2018 (the latest annual totals available) U.S. per-capita dairy consumption was at its highest since 1962. Even within the fluid milk category, there is some good news. Whole milk and flavored whole milk continue to be the bright spots.
Beyond fluid, U.S. per-capita consumption of dairy products (on a milk-equivalent, milkfat basis) increased to 646 pounds and has jumped 38 pounds in the past five years. Annual per-capita cheese consumption set another record-high at almost 38 pounds; butter is at its highest per-capita use since 1968.
We’re a bit biased, but we echo Kappelman when he says, “We have confidence and see opportunity in the future of the dairy industry.”
“From our perspective, farmers are extremely resilient and, as a cooperative, it is our job to identify the bright spots, aggressively pursue the growth opportunities that we see and do what we can to help members reach their full market potential during this difficult time,” he said.
In this issue, Progressive Dairy provides its annual “State of Dairy” report. It should be noted the responses were collected before the market downturn associated with the coronavirus in China.
As Mark Twain is paraphrased as saying upon reading of his own death in a newspaper: “The reports of my death are greatly exaggerated.”
In the following regional features, here’s what others had to say.
Editor's note: Interviews and comments collected for these articles were compiled prior to the widespread outbreak of the coronavirus and its impact on dairy markets. 
Also read:
Central: Staying focused on the positives
Southwest: positioning for the future
Northwest: Apprehension, but a commitment to innovate
Northeast: Embracing innovation, with a sense of relief
ILLUSTRATION: Illustration by Kristen Phillips.
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Dave Natzke
- Editor
- Progressive Dairy
- Email Dave Natzke
