Iowa Dairy Herd Increases Economic Activity in Iowa

Robert Tigner, Larry Tranel, and Dale Thoreson, Dairy Field Specialists; Dan Meyer, Ag Engineering Field Specialist; and Brian Lang, Crops Field Specialists - Northeast; Leo Timms and Lee Kilmer, Faculty - Animal Science

Problem Statement:

The US dairy industry has been undergoing transformation, restructuring and modernization for at least two decades. Technology changes and family living costs as well as production costs are a large part of the driver for this change. Iowa dairy producers and supporting businesses have been going through the same restructuring. Iowa dairy producers have not made as rapid a technological change to their milk production methods as dairy farms located in California, Idaho, Texas and New Mexico among others. Iowas dairy industry has lost market share and dairy industry infrastructure. Iowa was at one time number 6 in milk production share.

Production market share leaves towns and a dairy farm less able to sustain the economic activities related to dairy production and leaves fewer employment opportunities for local residents.
Programmatic Response:
A broad approach to the problem above has been taken by the ISU Dairy Team. This programmatic response has included assistance to modernizing dairy farms, intergenerational dairy farm transfers, transitioning of conventional dairy farms to grazing operations, relocation assistance and financial planning. Additional programming has taken place with communities regarding economic development opportunities and lenders to educate on dairy farm modernization and start-up.
A variety of programming approaches has been taken. Meetings, ICN presentations and courses, email contacts, farm calls, parlor tours, Dairy Days, 4-State Dairy consortium programs and train the trainer and agricultural professionals meetings.
Community organization development facilitation has been an important part of the programming response. Four community groups development has been facilitated. These groups assist dairy farmers relocating to Iowa in their integration into community life and assist in obtaining the services needed to successfully relocate their dairy.
The major result of the programming that has spanned several years is an increased dairy herd for the state of Iowa. Iowas dairy cow herd numbered 200,000 in March 2006. This number is 13,000 larger than January 2005.
Several economic impact studies have been conducted to estimate the economic impact of the dairy industry. These IMPLAN studies put the per cow impact between $13,000 and $17,000 annually. Using an average $15,000 impact per cow, the increased Iowa dairy herd has added $195,000,000 to Iowas economic activity.
This impact is larger than nearly any other industry due to the way dairy farms and processors operate. Many of the services and supplies are obtained from local sources which minimizes the leakages other industries have. A second reason for this large impact is the large labor needs of the dairy industry compared to others.

April 19, 2006
109 - Dairy

Page last updated: July 9, 2006
Page maintained by Linda Schultz,