The state’s dairy farms are leaving the industry at an alarming rate.
“There were about 650 Grade-A dairy permits this time last year, and now there are only 550,” noted Tony Banks, a Virginia Farm Bureau Federation commodity marketing specialist who tracks dairy trends. “Unfortunately, the losses will probably continue well into the second half of the year.”
He noted that factors affecting the decline in dairy farms include decreased consumer demand for fluid milk; an oversupply of milk that outpaces consumer demand for dairy products; and the cost of production for farmers, especially labor, machinery repairs, health insurance and regulatory compliance costs.
Industry analysts are concerned that marketplace changes are moving dairy farms one step closer to vertical integration—a similar path taken by poultry and pork producers. Banks said large retailers are opening their own dairy processing plants and contracting directly with fewer, but larger dairy farms.
“At the same time, other retailers and processors are changing milk suppliers, which has caused additional market disruption and price uncertainty here in the South,” he explained. “Add in potential negative demand impacts on American dairy because of U.S. trade negotiations with NAFTA, Europe and China, and the immediate future for U.S. farm milk prices is very discouraging.”
Dr. Jewel Bronaugh, Virginia Department of Agriculture and Consumer Services Commissioner, said she has been concerned for some time about the loss of dairies in Virginia, and the loss continues. “Milk has been in the top five agricultural commodities for years. Production is relatively stable, but the loss of individual farms is disturbing on many levels, including the potential loss of tååhat valuable farmland,” Bronaugh shared.
The leading dairy counties in Virginia are Rockingham, Franklin, Pittsylvania, Augusta and Washington.
Jeremy Daubert, the dairy science agent for Virginia Cooperative Extension in Rockingham County, recently told the Shenandoah County Board of Supervisors that Virginia lost about 4,000 dairy cows between 2014 and 2016 and has fallen from 23rd to 24th in the U.S. milk production rankings.
Source: Augusta Free Press