Think back with me to 2013. Terrorists targeted the Boston Marathon, setting off pressure cooker bombs filled with nails that killed three and injured hundreds. Disney released the animated movie Frozen with its hit song “Let It Go.” The current papal leader Pope Francis was elected. And Bitcoin crossed the then-unimaginable threshold of $1,000 in value. (As of this writing, Bitcoin is now worth $85,000.)
The dairy industry has changed a lot too since 2013. Most notably, we have half the number of dairies today as we did back then. That was a harsh reality to face while I crunched numbers for this year’s dairy stats poster. (See the center of this magazine for your own copy of our pull-out poster displaying last year’s milk production data.)
Stop and take this in: We have half the dairies we used to have 12 years ago. Half.
I didn’t think today’s reality was possible when I wrote an editorial in 2013 with the headline: “How much longer will your dairy last?” Back then I explained the concept of a half-life for U.S. dairy operations. Industry consolidation at the time was a big talking point, and it still is today. The industry’s half-life was 12 years.
Writing this today, it’s hard to imagine the future another half-life will bring. That will be an industry with just 12,000 farms.
The scary part about that half-life: It’s accelerating. My estimation is we’ll have half as many farms in 10 years, not 12 years as before. In that future, the average herd size would be near 800 cows with the average cow producing 25,000 pounds per year. If your herd isn’t making plans to be milking over 1,000 cows, there’s a chance you’re going to be one of the dairies that exits during the industry’s next half-life.
I’ve learned my lesson not to doubt the reality of consolidation’s half-life, despite how scary it may be. We’re already planning for Progressive Dairy to still be relevant for the surviving 12,000 farms. For example, in 2013, we didn’t have a twice-weekly newsletter or a daily updated website with individual subscriber accounts. Now we do.
More changes and innovation will inevitably come in the next 10 years for us … and hopefully for you. Start now to make the changes you need to make and set in motion plans to be one of the dairies left standing.
I want you to still be reading this page and another “I told you so” editorial a decade from now.
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