Growth in Ag

MINNEHAHA AND LINCOLN COUNTIES PLAY A BIG ROLE IN THE REVIVAL OF SOUTH DAKOTA’S DAIRY INDUSTRY

By Tom Peterson, South Dakota Dairy Producers

Over the past 10 years, the number of milk cows in Minnehaha County has grown on a scale that is almost unheard of in any segment of livestock production. USDA’s National Ag Statistics Service says there were 7,300 milk cows in Minnehaha in 2012 – but today there are more than 17,300. Even more stunning are the numbers in Lincoln County. A decade ago, there were a mere 400 milk cows left in the county. Today, Lincoln County is home to more than 13,300 milk cows.

Lincoln and Minnehaha Counties are at the heart of a dairy revival in what’s known as the “I-29 Dairy Corridor” which includes east central North Dakota, western Minnesota, eastern South Dakota, eastern Nebraska and western Iowa.

BOTTOMING OUT AND RATCHETING UP

If we go back to the early 2000s, South Dakota’s dairy cow numbers hit an all-time low at just under 80,000 milking cows. This trend meant dairy in the state was in real peril. A future thinking group of stakeholders came together with a vision to turn the dairy industry around. They didn’t want to just survive, but wanted to create a path to thrive. The “South Dakota Dairy Drive” group consisted of dairy farmers, state officials, processors, dairy supply companies, financial institutions, the dairy checkoff, industry associations, and South Dakota State University experts and leaders. Their foresight and efforts helped expand processing capacity which in turn created a need for an additional 85,000 cows.

These leaders set lofty goals, but the cows came more quickly than many thought possible. Today, the number of cows in South Dakota is close to 200,000 – an increase of 150% in just 20 years.

SETTING THE STAGE FOR FUTURE GROWTH

South Dakota led the nation in the increase of milk production year over year in 2021, per USDA data. The state continues to grow in milk production at a near double-digit pace even though much of the recently added processing capacity is now filled.

Processing and an available market are generally the limiting factor when it comes to growth in dairy.

2022 MILK COW INVENTORY

180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0

20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0

2012 2022

2012 2022

MILK COW INVENTORY Lincoln and Minnehaha Counties, 2012 vs 2022

Lincoln County Minnehaha County

Source: USDA National Ag Statistics Service

Added processing capacity sparked the growth in the last 20 years. The good news for producers and the state’s economy is that Milbank-based Valley Queen Cheese announced last spring it is planning to expand again. That will create a need for production from approximately 30,000 more cows. While growth may level off somewhat in the near term, the long-term picture remains very positive for dairy in South Dakota. Readily-available forage and feeds and an overall business-friendly environment also contribute to the state being a great place to dairy with a reasonable cost of production.

CHALLENGES FROM WEATHER, LABOR AND THE SUPPLY CHAIN

Since dairy farming and processing are a 24/7, 365-day commitment, challenges are a constant. The most pressing issues in 2022 were weather, labor, inflation and supply chain factors in shipping and transportation.

A GREAT STORY TO TELL

Consumers today have questions and expectations about where their food comes from, whether production practices are environmentally sustainable, and if farm animals are being well cared for. There is a great story to tell about dairy in South Dakota. Local dairies in Lincoln and Minnehaha Counties and throughout the eastern part of the state are incorporating incredibly innovative technology that is good for the environment and good for the animals, plus enhances the production and availability of one of life’s most nutritious foods, be it delivered via cheese, milk, yogurt, or new innovative dairy creations.

The U.S. dairy industry has also embarked on a journey to become carbon neutral, optimize water usage and improve water quality by 2050. The Net Zero Initiative is an industry-wide effort that will help U.S. dairy farms of all sizes and in all regions continue to implement new technologies and adopt economically-viable practices in feed production, cow care, energy efficiency and manure management. The industry will continue to make progress toward reductions in greenhouse gas emissions and significant improvements in water quality and quantity and farmer livelihood, from field to farmgate. //

Tom Peterson is executive director of South Dakota Dairy Producers and works in farmer relations for the Midwest Dairy Association. In this article, Tom shares the story of the industry’s phenomenal growth, as well as outlining the challenges and opportunities producers face.