Economic Tidbits

We All Scream for Ice Cream

June is National Dairy Month. The International Dairy Foods Association says National Dairy Month started out as National Milk Month in 1937 to promote drinking milk. By 1939 it was changed to Dairy Month, but still had the same goal of encouraging the consumption of milk. In Nebraska, the dairy sector is like the offensive line of Nebraska agriculture—working steadily and quietly, year-in and year-out, without garnering headlines. Last year Nebraska’s dairy sector contributed $358 million in value. And the state’s roughly 60,000 dairy cows have produced more than 1.4 billion pounds of milk annually since 2016, up 400 million pounds compared to the early 2000s (Figure 1). The increase stems from improved productivity per cow. According to the USDA National Agricultural Statistics Service, average milk production per cow jumped from 22,130 pounds in 2014 to 24,067 pounds in 2017, almost 2,000 pounds more milk per cow. Kris Bousquet, Executive Director of the Nebraska State Dairy Association, attributes the productivity gain to the exit of smaller farms from the industry due to tough economic times, increasing both the average herd size and productivity.

FIGURE 1. MILK PRODUCTION & # OF DAIRY COWS, NEBRASKA

Source: USDA National Agricultural Statistics Service

Figure 2 maps the distribution of dairy cows in Nebraska by county. The figures come from the 2017 USDA Census of Agriculture and account for two-thirds of the state’s dairy herd. Cow numbers are not available for some counties to protect farm privacy. Nebraska’s dairy cows are primarily located in the northeast, centered in Wayne County, with another smaller pocket in the southeast concentrated in Jefferson County. The proximity of processing facilities, other dairy farms, and larger population centers help support milk production in these areas.

FIGURE 2. MILK COWS BY COUNTY, 2017

Source: USDA National Agricultural Statistics Service, Census of Agriculture, 2017

While the sector has operated at a steady clip over the past few years, dairy supporters want to pick up the pace. They have launched an effort to grow milk production and processing in the state. Bousquet says Nebraska’s favorable regulatory environment and vast natural resources make the state conducive to growth. Growing the sector can benefit the state’s economy. A study by economists at the University of Nebraska-Lincoln showed each additional dairy cow would bring about $12,000 in economic activity to the state. Adding a butter, cheese, yogurt, or fluid milk processing plant would generate $1.7 billion of economic activity annually.

So, celebrate Dairy Month with a cold ice cream treat. Nothing tastes better on a warm summer day and Nebraska dairy farmers will appreciate the business.

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