One great thing about food and beverages is that consumers need sustenance in good times or bad. Dairy products are not discretionary purchases. Instead, they are essential purchases.
This point is even more important as the U.S. economy faces the possibility of a recession. The stock market, a forward-looking indicator, has seemingly dictated this possibility, as any investor in equities in 2022 knows all too well.
Hence, even though the economy is in murky shape, the dairy industry should continue to chug along. Michael Dykes, president and CEO of the International Dairy Foods Association (IDFA), noted in a July statement that the IDFA has seen no decline in consumer demand for dairy products in recent months.
Despite this fact, people have certainly tried to take their knocks at the dairy industry. Last month, Sports Illustrated, in an article named “Bovine Decline,” noted that cow’s milk has been an “iconic symbol in American life” and has been tied to people growing up big and strong. However, the author wondered if milk could survive.
Another knock on the dairy industry has been the alleged “decline of the family farm,” replaced by the “rise of the corporate farm.”
This is yet another myth. Of an estimated 39,442 farms of all sizes with dairy cows in 2020, 38,286 of them were family-operated, according to U.S. Department of Agriculture data. This is equivalent to 97.1% of dairies, which does not show much consolidation at all.
When the dairy farm industry does consolidate, family farms are often merged with other family farms, as opposed to being acquired by corporations.
This is evident in the fact that this 97% family-farm figure has not budged in years. In 2016, for example, even though the overall number of farms with dairy cows was more than 48,000, the family-farm percentage that year was 97.3%.
Just as dairy itself isn’t dead, the family dairy farm isn’t either,” asserts the National Milk Producers Federation (NMPF). “But like everything else, it’s changed. A family dairy farm may be a bigger employer than before, and it may be a more sophisticated business.”
The NMPF further points out that this has been the direction of U.S. agriculture for years, and is nothing to be alarmed about.
“Despite the realities of an ever-changing industry, the family farm remains the bedrock of U.S. dairy farming. And that shows no sign of ending, anytime soon,” states NMPF.
The state of the U.S. dairy industry, whether there is an economic recession or not, remains strong. It should stay that way for many years to come.