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January 4, 2002

Indiana tops list in Midwest milk production growth

WEST LAFAYETTE, Ind. – Indiana leads the Midwest in milk production growth and is the only state to experience increased output in the past year, says a Purdue University Extension dairy specialist.

Indiana milk production is up 7 percent from November 2000, based on the U.S. Department of Agriculture milk production report released last month. Illinois, Iowa, Kentucky, Michigan, Minnesota, Ohio and Wisconsin all saw a drop in production from a year ago.

"Dairy production in Indiana is growing at the fastest rate in the nation at the current time," says Mike Schutz, assistant professor of animal sciences. "Indiana is the 15th largest dairy producer in the nation, up from 18th two years ago. However, we lead the nation in the increased percentage of dairy production."

Total milk production from Hoosier herds for November 2001 was 208 million pounds. Hoosier dairy farms also expanded herd sizes, according to the report. Indiana now has 155,000 head of milk cows, which is up 5 percent over a year ago and 14 percent higher than two years ago.

"Existing dairies in Indiana are taking advantage of the opportunity to expand, which increases our production," Schutz says. "It has been a great time to expand with milk prices that have been variable, but quite high on average, over the last several years. But we also are seeing startup dairies from other parts of the country and the world relocating to Indiana."

Schutz says the majority of new dairies are locating in northern Indiana, which is attractive to producers for several reasons. The major advantage Indiana has is its proximity to the southeastern states and the East Coast. The increased population and development pressure on land have forced dairy farms out of that area, which has led to a decline in production, Schutz says.

"There is a great demand in the southeast fluid milk market," Schutz says. "Because of this, Hoosier farmers can receive higher prices for trucking their milk down there. Indiana does not have to be in the market to compete. They just have to be close and have the ability to ship milk to the southeastern states easily."

New startup dairies are developing in northern Indiana because of the ideal conditions for milk production, Schutz says. Dairy cattle do not have to brave the heat and humidity of the southeast, nor do the employees have to be in the colder conditions of the north. There also is available rural land without nearby development pressure. And for those dairy farmers who have relocated from European nations, northern Indiana provides many cultural links with the Dutch communities.

Because of the January 2000 reform to the Federal Milk Marketing Orders that establish fair prices for different regions of the United States, Indiana also has seen relatively improved prices compared to the upper Midwest, Schutz says. Feed prices recently have been lower in the eastern Corn Belt and corn silage and forages are readily available.

The states best known for dairy production, Wisconsin and Minnesota, continue to produce more than 2 billion pounds of fluid milk each month. However, the increased emphasis on tourism in these two states has slowed growth in milk production and stalled dairy expansion, Schutz says.

"There is some effort to open more dairies in Wisconsin and Minnesota," he says. "However, the states are not approving larger dairies because of environmental issues."

Writer: Jennifer Doup, (765) 494-6682, jdoup@aes.purdue.edu

Source: Mike Schutz, (765) 494-9478, mschutz@purdue.edu

Ag Communications: (765) 494-2722; Beth Forbes, bforbes@aes.purdue.edu; http://www.agriculture.purdue.edu/AgComm/public/agnews/

Related Web sites:
Purdue Agricultural Economics Report, December 2001
Purdue University Dairy Science
U.S. Department of Agriculture National Agricultural Statistics Service

Purdue News Service: (765) 494-2096; purduenews@purdue.edu


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