Sunday, July 11, 2021

Where are the Cows Going? Texas is Rising Fastest!

The number of cows in the U.S. continues to grow.  Within that growth, there are some state-by-state significant long-term changes.  The state "cow counts" in this post are for May of each year beginning with 2016 through 2021.  This allows the most recent data to be included and compared to the same month of prior years. The trends established though the last six years are used to extrapolate where the growth and losses will occur in the next four years.  

There are 24 states that make up 96 percent of the total U.S. dairy cow population and six states make up 59 percent of the total U.S. dairy cows.  The data for these 24 states and the six largest states will be used for much of this analysis.  These six largest states in order by size are California, Wisconsin, Idaho, New York, Texas, and Pennsylvania.

How do the six largest states compare in size?  California is significantly larger than any other state. Wisconsin is second with 26 percent fewer cows than California.  The next four states are smaller and close in size.  There are some ranking changes among these four over the last six years.

Chart I - Number of Cows in the six largest states

Table I below compares the six largest states by their gains and losses.  Three of these states have gained dairy cows while three have lost dairy cows.

Overall, the cow count over the last six years in the 24 major dairy states has increased by 349,000 cows which is a four percent increase.  The largest gain that occurred was in Texas with a gain of 153,000 cows.  Idaho also has a nice gain of 61,000 cows.  New York state had a small gain of 8000 cows. 

The loss of 55,000 cows in Pennsylvania was a very significant loss for their dairy business.  The two states with the largest number of cows, California and Wisconsin, have also decreased their cow counts.  In the case of California, the loss of 44,000 cows over the six years reviewed, was significant, while the loss in Wisconsin was very slight at just 5000 cows. 

The states with the biggest increases in the number of cows are Texas and Idaho.  Texas is in a Federal Milk Marketing Order and Idaho is not in a Federal Order.  With the massive de-pooling that is happening in the Federal Orders, one could question the value of being in a Federal Order.

Table I - The Top Six States for Dairy Cows

Chart II below shows the difference between California and Wisconsin, the two largest states.  The chart also provides a four-year projection if the same trends continue.  California would continue losing cows at the rate of about .5 percent per year.  However, California will remain by far the largest dairy cow state.  The loss in Wisconsin is small and in 2021 there is an increase of 1.4 percent over the prior year.  Wisconsin can best be described as stable.

Chart II - Number of Cows in the six largest states

The four states that were clustered together in Chart I have very different projections through 2025.  There are five states in Chart III because the rankings change, bringing in Michigan as one of the top six. Pennsylvania, the brown line, will continue to lose cows at a significant pace and will drop out of the top six largest cow states.

Chart III - Dairy Cows with Linear Projections Through 2024

Table II below ranks the states by cow population over the span of this analysis.  While California and Wisconsin will remain the leaders, there have been many changes in the ranking of the remaining four states.  Third place has changed from New York to Idaho in the last six years. By 2025, Texas would rise to third place in the four years of projections reducing Idaho to fourth place.  During the term of this 10-year analysis, Texas is moving from sixth place to third place.  

By 2025, Pennsylvania has fallen out of the top six and Michigan, which has a growth rate of 6.5 percent over the last six years, will replace Pennsylvania in the top six cow states.  New York is steadily dropping in the rankings during this time span, going from third place to fourth place and by the trends will soon be in fifth place. While New York is not losing many cows, it is also not growing.

Table II - Ranking of the Largest Dairy States

Another way of analyzing the gains and losses by state is by their percent gain or loss.  Table III shows the states with double digit percent gains and losses between 2016 and 2021.  Overall, the more central states with lower population densities have made gains.  The more heavily populated states, especially on the East coast have lost cow population.  The heavily populated states are greatly impacted by the decreases in fluid milk consumption.  Florida, which is almost totally fluid milk, is a prime example of a shrinking dairy state.

Table III - Double Digit Percent Gains/Loses by State

As covered in prior posts, Class I fluid milk is declining and Class III milk for cheese is growing.  (See the May 30, 2021 post and the September 11, 2020 post.). Table IV below lists the six largest cheese producing states.

The top three cheese producing states (Table IV) are the same as the top three states with the largest number of cows (Table I). New Mexico. the fourth largest cheese producing state, is the home to two large cheese producing plants and just across the border in Texas, Hilmar Cheese also has a large cheese plant.  Much of the Texas produced milk goes to these three cheese plants.  Hilmar Cheese also owns the world's largest cheese plant, located in northern California, which is very important to support the demand for Class III milk in California.

New York, the fourth largest state in Table I, and is ranked fifth in cheese production.  New York is well balanced between Class I fluid milk and Class III milk for cheese and, therefore, remains stable with only minor changes in their cow population. 

Table IV - Largest Cheese Producing States

This post provides insight into where milk production has moved and where it is going.  Some of the changes are driven by the changing consumer consumption with less fluid milk and more cheese.  The cows will follow where the cheese plants are built.  In turn, the businesses that support dairy producers must follow the cows.  

The changes are also driven by economic factors like taxes, labor availability, and land values.  These changes are not short-term, like the impact of COVID was.  These are long-term shifts that will continue.  Please post any comments or questions in the comment section of this post.