Iowa Dairy Industry Sets Development Goal

March 21st, 2005

There were 6,080 dairy herds in Iowa in 1990. By 2004, that number had dropped to 2,410. Now several groups interested in Iowa's dairy industry are working together to reverse that downward trend.

A meeting last summer was the first step. It was organized by Iowa State University and co-sponsored by the Iowa State Dairy Association, Iowa Dairy Products Association, Northeast Iowa Community-Based Dairy Foundation, Iowa Farm Bureau Federation, Iowa Department of Agriculture and Land Stewardship and Western Iowa Dairy Alliance.

About 80 people who had been identified as leaders in Iowa's dairy industry participated in that first Iowa Dairy Summit. One outcome of the summit was an agreement that the various organizations involved needed to work together to move Iowa's dairy industry ahead.

A working group was established and a November meeting held with representatives of the sponsoring organizations. At that meeting, a goal and guiding principles were written to lead Iowa's dairy industry through 2010.

Paul Brown, Iowa State University Extension's assistant director for agriculture and natural resource programs, said each of the sponsoring organizations has endorsed the statements developed by the working group.

"The primary goal of the Iowa dairy industry is to increase Iowa's share of national milk production from 2.22 percent to 2.8 percent by 2010," Brown said. "This will require production per cow to increase from 18,800 pounds to 22,000 pounds. It also will require an increase of 26,000 cows."

Scott Niess, president of the Iowa State Dairy Association, said Iowa has great potential to grow its dairy industry using resources already here, while at the same time considering dairies outside Iowa. "Achieving a 2.8 percent market share increase by 2010 is an achievable goal," he said.

Brown said industry growth can come in three areas - modernization and expansion of existing dairy operations, opportunities for young people and new farmers to enter the dairy business, and inviting farm families from other states and countries to be part of the Iowa dairy industry.

"What is so exciting about growing Iowa's dairy industry is that at the producer level there are opportunities for a variety of management styles," said Nick Rolling, president of the Northeast Iowa Community-Based Dairy Foundation. "Young people willing to think outside the box can start their own dairy farm. Also, dairying still requires quite a bit of labor which is something younger producers can provide. This makes it possible for them to get started and compete."

Maynard Hogberg, chair of the ISU animal science department, has been a leader in getting the various groups with dairy interests together. "Milk production and processing have a tremendous economic and social impact on local communities," he said. "Dairy farms are heavy users of veterinarians, feed mills, trucking, hardware and repair, fuel, oil and electricity, labor and professional services."

In fact, the economic multiplier for milk production is 2.29. That means for every $1 in milk and related sales, another $1.29 is generated in economic growth. The positive story for Iowa's milk processing industry is even better, with the multiplier for processing pegged at 2.61.

There are social multipliers, as well. "For every 100 cows added, two jobs are created on a dairy farm, 1.4 jobs are created off-farm and 1.5 children are added in the classroom," Brown said.

Increasing milk production in Iowa would make officials at 19 major milk-processing facilities in the state happier. "At current production rates, Iowa dairy farmers aren't supplying all the milk needed for the processing plants we have here," Hogberg said. "We estimate about 25 percent of the milk processed in Iowa plants is being imported from other states."

Hogberg said if Iowa increases its milk production, processors in the state can continue to be reliable suppliers in a national market where consumer and commercial demand is growing nearly 2 percent annually. "In addition, they might expand existing plants and build new ones if the Iowa milk supply is stable and growing," he said.

Brown said milk production in some traditional dairy states, such as Minnesota, Wisconsin and Illinois, has been declining. "Iowa has the resources and the infrastructure to take advantage of this opportunity and increase our market share," he said.

Representatives of the sponsoring organizations have agreed to meet quarterly to work towards the goal of increasing Iowa's share of national milk production to 2.8 percent. In fact, they've adopted the name of "Iowa's 2.8% Coalition" to help people both inside and outside of the dairy industry understand and recognize their goal.

Iowa State University coordinates these quarterly meetings. Other coalition members will take on such tasks as developing a directory of Iowa dairy industry leaders, a survey of dairy producers and helping communicate the development goal and guiding principles not only to their own groups, but to the general public. An Iowa Dairy Summit II may be held in late summer.

"Now that the various segments of the Iowa dairy industry have come together on a development goal, the next step is to develop programs and activities that will help reach that goal," Brown said.

Contacts: 

Maynard Hogberg, Animal Science, (515) 294-2160, hogberg@iastate.edu
Paul Brown, Agriculture and Natural Resources Extension, (515) 294-7801, pwbrown@iastate.edu
Susan Thompson, Communications Service, (515) 294-0705, sander@iastate.edu