This document is made available electronically by the Minnesota Legislative Reference Library as part of an ongoing digital archiving project. http://www.leg.state.mn.us/lrl/lrl.asp MINNESOTA DAIRY INDUSTRY PROFILE Prepared by: Su Ye Agricultural Marketing Services Division Minnesota Department of Agriculture 29 www.mda.state.mn.us
TABLE OF CONTENTS Minnesota. Page 2-11 National Ranking Production Trend Cash Receipts Milk Yield Farm Numbers County Ranking Prices Feed Use by Dairy Production Export Economic Impact U.S.. Page 12-15 Production Trend Consumption Trend Exports and Imports Imports by Country of Origin World.. Page 16 Largest Producers and Consumers - 1 -
National Ranking Minnesota is the 6 th largest dairy state in the U.S. In 28, Minnesota had 464, head of dairy cows, about 5% of the U.S. total. Many large dairy states have seen decreases in cow numbers in the past decades; Minnesota, however, has achieved increases in cow numbers from 25 to 28, a four-year consecutive growth after long periods of decline. U.S. Top 1 Dairy States (28) Number of Dairy Cows All other 28% CA 2% OH 3% WI 13% NM 3.6% MI 3.8% TX 4.5% MN 5% PA 5.9% ID 6% NY 7% 2, 1,8 1,6 U.S. Top 1 Dairy States (28) 1, Head 28 2 199 1,4 1,2 1, 8 6 4 2 CA WI NY ID PA MN TX MI NM OH - 2 -
Production Trend Minnesota produced 8.8 billion pounds of milk in 28, a slight increase from the previous year. After years of decline, the past four years have seen an annual production growth averaging 2%. From 199 to 28, milk production in Minnesota decreased by 12% while dairy cow numbers decreased by 35%. U.S. Top 1 Milk Producing States (28) Billion Pounds 45. 4. 35. 3. 25. 2. 15. 1. MN 8.8 5.. CA WI NY ID PA MN TX NM MI WA Minnesota Dairy Production and Dairy Cows (199-28) Production 11, 1, 9, 8, 7, 6, 5, 4, 3, 2, 1, Milk production (million lb.) Dairy cows (1, head) 8 7 6 5 4 3 2 1 Cows 199 1992 1994 1996 1998 2 22 24 26 28-3 -
Milk Yield In Minnesota, milk yield per cow increased by 34% from 199 to 28, from 14, pounds to 19, pounds. Minnesota ranks No. 22 in milk yield among U.S. dairy states. Minnesota Milk Production and Yield (199-28) Production Milk production (mil lb.) Yield/cow (lb.) 11, 1, 9, 8, 7, 6, 5, 4, 3, 2, 1, 199 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 2, 18, 16, 14, 12, 1, 8, 6, 4, 2, Yield U.S. Top States: Milk Yield (28) - Pounds 25, 22,5 2, 17,5 15, 12,5 1, 7,5 5, 2,5 WA NM ID CA MI TX IA SD NY WI PA MN MN - 4 -
Cash Receipts Dairy is Minnesota s second largest livestock sector (after hogs), contributing 24% of the state s total livestock cash receipts. Dairy s cash receipts increased 58% from 26 to 27, from $1.1 billion to $1.7 billion the biggest annual increase in the past three decades, due to historical high milk prices in 27. Minnesota Livestock Cash Receipts by Sector (27) Sheep/lamb.3% Poultry 17% All other 1% Hogs 35% Cattle/calves 23% Dairy 24% Minnesota Livestock Cash Receipts (199-27) Million $ $2,2 Cattle & Calves Dairy Hogs Poultry $2, $1,8 $1,6 $1,4 $1,2 $1, $8 $6 $4 $2 199 1991 1992 1993 1994 1995 1996 1997 1998-5 - 1999 2 21 22 23 24 25 26 27
Farm Numbers Farms numbers are decreasing in Minnesota, and livestock and dairy farms are no exception. Minnesota has fewer dairy farms today than a decade ago. Due to industry consolidation, the average size of dairy farms also increased, from less than 5 cows per farm in 199 to 9 cows per farm in 27. 35, Minnesota Livestock Farms: Change in Numbers 3, 25, 1992 1997 22 27 2, 15, 1, 5, Cattle/calves Dairy Hogs Poultry Sheep Source: USDA-Ag Census Minnesota Dairy Cow Inventory by Farm Size (% inventory) 1% <2 head 9% >2 head 8% 7% 6% 5% 4% 3% 2% 1% % 1992 1997 22 27 Source: Ag Census - 6 -
County Ranking Stearns County is the largest dairy county in Minnesota, followed by Winona, Morrison, Otter Tail, and Goodhue. Among the top 1 dairy counties, Stearns, Morrison, and Stevens are the three counties with increased production from 2 to 27. The others had production declines. Minnesota Top Dairy Counties 27 (Million Pounds) 27 Rank County 27 26 25 2 2-27 Change 2 Rank 1 Stearns 1,257 1,25 1154.5 1,154 9% 1 2 Winona 58 489 478 521-2% 3 3 Morrison 52 486 479 483 4% 4 4 Otter Tail 426 41 48.5 528-19% 2 5 Goodhue 388 382 377 467-17% 5 6 Wabasha 354 337 325 379-7% 6 7 Stevens 295 2 151 43 586% 47 8 Todd 29 296 294 357-19% 7 9 Fillmore 233 221 218 269-13% 8 1 Benton 21 213 29 244-14% 11 All other counties 4,193 4,125 4,11 5,51-17% State total 8,656 8,364 8,195 9,493-9% 1,4 1,2 1, 8 6 4 2 Top 1 Counties: Milk Production (1, lb.) Stearns W i nona M orr ison O tter T ail G o o dhue W abasha Stevens Todd F i l l m ore Benton - 7 -
Prices In 28, milk prices received by Minnesota growers averaged $19.8/cwt., a second historical high. However, milk prices saw significant declines in early 29, averaging $12.6/cwt. in the first four months the lowest level since 22. Farm-retail price spreads show more fluctuations in farm-gate value than retail value. Production 11, 1, 9, 8, 7, 6, 5, 4, 3, 2, 1, Minnesota Milk Production and Prices (199-28) 199 1991 1992 Production (mil. Lb.) 1993 1994 1995 1996 1997 1998 1999 2 21 Prices ($/cwt.) 22 23 24 25 26 27 28 Dairy Prices: Farm-Retail Spread - 1998-28 (1982-84=1) 23 21 19 17 15 13 11 9 7 5 Fa r m v a lu e R e ta il p r ic e $2. $18. $16. $14. $12. $1. $8. $6. $4. $2. $. Prices 1 99 8 1 99 9 2 2 1 2 2 2 3 2 4 2 5 2 6 2 7 2 8 Source: USDA, ERS - 8 -
Export Minnesota is the fifth largest dairy exporter among all U.S. states. In 27, Minnesota exported $113 million dairy products, up from $93 million in 26, a 22% increase. Minnesota s dairy export products include dry and condensed milk (8%), cheese (15%), and butter (6%). Mexico is Minnesota s largest dairy export market, followed by Canada. MN Largest Dairy Export Markets (28) All other 32% Mexico 25% Vietnam 2% Egypt 2% Korea 3% Malaysia 3% China 5% Japan 5% Canada 11% Philippines 6% Indonesia 6% Source: USDA-BICO $12 Minnesota Dairy Export Trend (Million $) $1 $8 Trendline $6 $4 $2 $ 199 1991 1992 1993 1994 1995 1996 1997 1998-9 - 1999 2 21 22 23 24 25 26 27
Feed Use by Dairy Production Dairy production supports crop farming through feed utilization, a significant market for Minnesota s corn and soybean crops. In 28, dairy production consumed 44 million bushels of corn, about 4% of Minnesota s total corn crop. Dairy production also consumed 141,6 tons of soybean meal in 28, about 15% of total soybean meal fed to all livestock. Dairy cows are the second largest feed users of corn and third largest feed users of soybean meal in Minnesota. MN Corn Utilization (28) Corn: Feed Use by Dairy (28) Residual* 7% Beef 15% Other 1% Processing 34% Export 42% Hogs 46% Poultry 17% *Residual: all other uses Feed Use 17% Dairy 21% Source: PRX and MDA/AMS MN Soybean Utilization (28) Soybean Meal: Feed Use by Dairy (28) Export 4% Residual* 4% Dairy 15% Beef 9% Other.5% Hogs 41% Crush 56% Poultry 35% *Residual: all other uses Source: PRX and MDA/AMS - 1 -
Economic Impact Minnesota s dairy industry includes both dairy production and processing, with a combined total annual output value of $4.6 billion. Every dollar from dairy production and processing generates about $2 in statewide economic activities. The multiplier effect of Minnesota s dairy industry to the state economy: o Total economic output: $8.96 billion o Total employment: 39,85 jobs. Output Impact of Dairy Production & Processing: $8.96 billion Economic activities generated by increased income $1.1 billion Additional production activities $3.3 billion Dairy production & processing $4.6 billion Source: MDA/AMS Output Impact (Billion $) Employment Impact (# of jobs) $1. $9. 4, 39,85 $9. $8. $7. $6. $5. $4. $3. $2. $1. $. $4.6 $3.3 $1.1 Direct Indirect Induced Total 35, 3, 25, 2, 15, 1, 5, 17,255 12,616 9,214 Direct Indirect Induced Total Source: MDA/AMS Note: Economic impacts include Direct, Indirect, and Induced impacts. Direct Impact represents hog production at farm-level. Indirect Impact represents the production activities of all other economic sectors related to hog production. Induced Impact represents the additional economic activities generated by the expenditures of new income from the direct and indirect impacts. Total Impact is the sum of direct, indirect and induced impacts. - 1 -
Production Trend U.S. DAIRY INDUSTRY U.S. production increased by 29% from 199 to 28, to a record-high of 19 billion pounds. U.S. dairy cow numbers decreased by 7% during the same time. In the long term, milk yield per cow is projected to continuously increase while cow numbers will decrease. U.S. and Minnesota Milk Production Trends (Billion Pounds) 2. US MN 1.5 19. 1. US 18. 17. 16. 15. 14. 9.5 9. 8.5 8. 7.5 7. MN 13. 6.5 12. 6. 199 1992 1994 1996 1998 2 22 24 26 28-12 -
U.S. DAIRY INDUSTRY U.S. Dairy Consumption Trend U.S. total consumption of dairy products increased by 29% from 198 to 27. While fluid milk consumption declined by 2%, cheese consumption increase by 33%. There are four major categories of U.S. milk utilization: cheese (4%), fluid (32%), butter (14%), and all other (14%). U.S. Dairy Production & Consumption (199-28) Billion Pounds 2 19 Production Consumption Production 18 Consumption 17 16 15 14 13 199 1992 1994 1996 1998 2 22 24 26 28 Source: USDA, ERS U.S. Per Capita Dairy Consumption (1997-27) Pounds 61 All dairy* Fluid milk 23 6 22 21 59 2 58 19 57 56 55 199 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 * Milk equivalent Source: USDA, ERS - 13-18 17 16 15
U.S. DAIRY INDUSTRY U.S. Dairy Exports and Imports U.S. dairy exports reached record levels in 28 with a total value of $3.55 billion, despite weakening global demand among economic crisis. U.S. dairy exports have been increasing at an annual average rate of 16%, with largest increases taken place after 24. The U.S. is becoming a more significant player in the global dairy export market. Historically, the U.S. imported more dairy products than its exports. $4, $3,5 U.S. Dairy Export and Import Trend (Million $) Imports Exports $3, $2,5 Imports $2, $1,5 $1, $5 Exports $ 199 1992 1994 1996 1998 2 22 24 26 28 Source: USDA-FATUS U.S. Dairy Export by Product - 28 (Million $) Fluid milk/cream Condensed/evaporated milk Yogurt Icecream Casein Dry whole milk & cream Butter Whey Cheese Non-fat dry milk Source: USDA-FAS $ $2 $4 $6 $8 $1, $1,2 $1,4-14 -
U.S. DAIRY INDUSTRY U.S. Dairy Imports by Country of Origin The majority of U.S. dairy imports come from just four countries: New Zealand, Canada, Italy, and France, with a combined value of $1.6 billion or 54% of U.S. total dairy imports. The U.S. is the world s No. 14 cheese exporter and No. 6 cheese importer. U.S. Dairy Import Trend: Top Suppliers (2-28) Million $ $8 $7 $6 $5 $4 $3 $2 $1 $ New Zealand Canada Italy France 2 21 22 23 24 25 26 27 28 Source: USDA, FAS U.S. Dairy Imports by Country of Origin (28) Import Value Country of Origin (Million $) NEW ZEALAND $74.29 CANADA $387.57 ITALY $355.24 FRANCE $193.96 NETHERLANDS $152.88 MEXICO $139.64 IRELAND $129.7 AUSTRALIA $123.69 INDIA $19.12 ARGENTINA $15.61 DENMARK $13.37 SWITZERLAND $67.82 POLAND $55.2 UNITED KINGDOM $46.67 FINLAND $45.31 SPAIN $44.8 NORWAY $42.46 GERMANY $4.45 GREECE $35.64 All other $165.61 Total $3,48.2 Source: USDA, FAS - 15 -
WORLD DAIRY SITUATION Largest Producers and Consumers The U.S. is the world s No. 1 milk producer from dairy cows, contributing 15% of world s total production. The U.S. also ranks No. 1 in cheese production and No. 2 in whey production. As a major consumer of dairy products, U.S. ranks No. 1 in cheese consumption and No. 2 in fluid milk consumption; on a per-capita basis, U.S. ranks No. 15 in cheese consumption and No. 22 in fluid milk consumption. Rank Top Producers World s Top Dairy Producers (27) Cow Milk Production (1, MT) Rank Top Producers Cow Milk Production (1, MT) 1 U.S. 84,189 12 Italy 11, 2 India 42,14 13 Pakistan 11, 3 China 32,82 14 Turkey 11, 4 Russia 31,95 15 Netherlands 1,75 5 Germany 27,9 16 Argentina 1,5 6 Brazil 25,327 17 Australia 1,35 7 France 23,75 18 Mexico 9,599 8 New Zealand 15,842 19 Japan 8,14 9 UK 14,45 2 Canada 8, 1 Ukraine 12,3 11 Poland 11,8 World Total 56,487 Source: FAO and MDA/AMS Per Capita Fluid Milk Consumption Selected Countries (kg/year) 12 1 8 15 95 92 87 84 78 68 6 4 54 49 41 37 35 2 11 Australia Canada U.S. New Zealand Russia Ukraine EU-27 Brazil Argentina Mexico India Japan China Source: USDA, FAO, and MDA/AMS - 16 -
Minnesota Department of Agriculture (MDA) Our mission is to enhance Minnesotans' quality of life by ensuring the integrity of our food supply, the health of our environment, and the strength of our agricultural economy. Our three general areas of responsibility include: Protecting our food supply; Protecting our natural resources; and Cultivating our agricultural economy. The MDA s Agricultural Marketing Services Division (AMS) works to develop and diversify Minnesota's agricultural industries, markets and products through market research, market promotion, education and technical assistance. Division programs focus on developing domestic and international market opportunities for Minnesota producers and marketers. For more information, please contact: Agricultural Marketing Services Division Minnesota Department of Agriculture 625 North Robert Street, St. Paul, MN 55155 Tel: 651-21-6384, Fax: 651-21-6114 E-mail: su.ye@state.mn.us Web: www.mda.state.mn.us May 29 IN ACCORDANCE WITH THE AMERICANS WITH DISABILITIES ACT, AN ALTERNATIVE FORM OF COMMUNICATION IS AVAILABLE UPON REQUEST. TTY: 1-8-627-3529 - 17 -