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Extension > Local Extension Offices > Benton > County Agriculture Educator > Articles > What is our “Path Forward”?

What is our “Path Forward”?

University of Minnesota Extension, Stearns County News
September 17, 2014        
           
Source:  Emily Wilmes, Extension Educator-Livestock
University of Minnesota Extension
Stearns, Benton & Morrison Counties

 

What is our “Path Forward”?
By Emily Wilmes, University of Minnesota Extension

ST. CLOUD, Minn. (09/03/2014) —It’s no secret that global demand for dairy products is increasing.  As we look towards the future, we can see many things: an increasing population, greater demand for land for urban development, and many similar instances.  The U.S. dairy market is projected to grow 15% by 2022.  How can the Midwest and more specifically Minnesota regain their status as a major player in the domestic dairy game?  What are the opportunities?  How can we move forward?  Those and many related questions were considered and sought to be answered by the recently released report, titled “A Path Forward.”

This report is based on a study conducted by Blimling and Associates, Inc. It was carried out under the direction of the Midwest Dairy Foods Research Center’s Dairy Economic Advisory Council, consisting of dairy farmer and processor leaders.  The study was designed to assess the factors that could help Midwest states respond to the changing marketplace and continue to capture the significant economic impact provided by the dairy industry.  According to the study, the Midwest has the potential to capture its share of growing domestic and global dairy demand opportunities.  Some key factors for the region include land and water infrastructure, positive business climate, capital resource availability and favorable returns.

Midwest Dairy Association states, “Milk production in the Midwest dipped to a 40-year low in 2004, but has rebounded by 15 percent as of 2013. Yet, as examined in the study, several factors have contributed to slowing on-farm expansions, including increased land prices, tighter lending requirements and many attractive alternatives competing for producers’ resources and capital. Growth in “greenfield”, or new facility, processing capacity has been limited by relatively high farm milk prices, high freight costs and uncertainty surrounding future product mix.”

The study also found that the Midwest could have a role in “backfilling” domestically to counteract products leaving for global export.  It also identified a potential role to focus on cheese and value-added products. 

While interviewing dairy farmers and processors about the findings of the study, three themes emerged: market assessment, public support to grow and thrive, and dairy development.  Some major points from the market assessment theme were Midwest dairy viability, economic impact of dairy, current and future product mix, transportation, secondary processing, domestic value-added opportunities, and global value-added opportunities.  Important thoughts from the public support to grow and thrive theme included sustainability, traceability, food safety, animal well-being, message development, social media, spokesperson training, crisis preparedness, and thought leader influence.  The dairy development theme featured ideas about labor, on-farm processing at all levels, land availability and price, new production models at all levels, availability of capital, infrastructure support, technology, leadership, and regulatory measures. 

According to Midwest Dairy, dairy industry leaders-including co-op and private processors, dairy farmers, and others-met in early June to review the information and expressed support for the following initiatives:

  • Pursue a “growth and prosperity” strategy across the region, aiming to maintain share of U.S. milk supply while paying producers a nationally competitive milk price;
  • Enhance state dairy economic development plans including various state groups throughout the Midwest and a repurposed Minnesota Dairy Leaders Roundtable;
  • Identify pre-competitive domestic and global value-added product marketing challenges and opportunities through the Midwest Dairy Foods Research Center; and
  • Build on Midwest Dairy’s consumer confidence initiatives to address dairy farmers’ “public license” to operate, thrive and grow.

Midwest Dairy and other stakeholders will determine how to apply the study’s recommendations and what further information is required, along with identifying what entities should be engaged in initiatives surrounding them.

Personally, I have found the findings of this study to be very interesting and thought-provoking.  I feel the entire Midwest, and especially Minnesota, is in a great position to once again become a major player in the dairy game.  Included with one handout about the report was a map showing the 2012 cow inventory.  The map included Minnesota, North Dakota, South Dakota, Iowa, and Nebraska.  Only 3 counties from all five states had more the 25,000 cows in them, and all three of those counties are located in Minnesota.  Interestingly enough, two of the three are right here in central Minnesota-Stearns and Morrison.  The other was Winona County in Southeastern Minnesota.  The strong dairy influence in Central Minnesota puts us in a great position to be leaders in the potential push to move the Midwest forward.

As I already said, the findings of this study are fascinating.  I really encourage every dairy producer and business person involved in the dairy industry to take a look at this report and consider the role we can play in dairy’s future.  For more information, you can visit midwestdairycheckoff.com or call me at the Stearns County Extension office at 320-255-6169.

Contacts

Emily Wilmes
Extension Educator, Ag Production Systems - Livestock
(320) 255-6169
krek0033@umn.edu
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