The USDA February Milk Production report illustrated a 1.3% increase in milk production compared to January 2022. Following suit, cow numbers also showed growth with an increase of 38,000 additional head year-over-year. Texas milk production growth has steadily grown over the last two decades and last year the Lone Star State pushed past Idaho and currently ranks No. 3 for milk production.
According to Juan Piñeiro, assistant professor and extension dairy specialist with Texas A&M AgriLife Research and Extension Center, the Lonestar State will continue to increase cow numbers and milk production over the next five years.
“When business is good, dairies continue to expand,” Piñeiro states.
This explains why we have seen consolidation in the dairy industry, especially in the last 15 years in the U.S., with a period of an increased rate of consolidation.
“Texas is expanding in the Panhandle where the average size of dairies is roughly 4,000 lactating cows,” he says. “These big dairies will likely continue to expand.”
However, in order for dairies to expand they need to have a place to take their milk.
“There are four milk plants under construction or that will break ground soon in Texas,” Piñeiro adds.
The expansion of milk processing capacity and new plant construction in locations like Dumas, Amarillo and Lubbock, Texas, as well as Hilmar Cheese breaking ground in western Kansas last fall, is the likely the cause of the increase seen in Texas’ cow numbers and milk production.
Tanner Ehmke, a leading dairy economist with CoBank concurs with Piñeiro, saying that the new cheese processing capacity coming online in the Texas Panhandle will add more tailwind to the herd growth in Texas.
“Same thing in South Dakota and all of these growth areas are cheese-producing states,” he says. “All the milk is going to new cheese capacity.”
Another story that continues to unfold is the shift of herds inland. Driving the reduction of cows out West stems from water scarcity issues and feed availability.
“This long-term trend of migration from the coastal areas to the central states where costs are lower will continue,” Ehmke says.
February 23, 2023