November 8, 2016

Despite Market Headwinds, Dairy Farmers Plan to Expand

 |  By: Anna-Lisa Laca

Dairy farmers are facing headwinds in ways many generations before them didn’t have to face. One of those is consumer preference and the influence it has on markets, and ultimately their businesses. Throughout the MILK Business Conference producers have been using polling software to share their views on many things, including consumer issues.

For 46% of producers, stability and profitability of their farm business tops the list of concerns keeping farmers awake at night.

An overwhelming majority of producers in attendance say the gap between the price they are paid for milk on the farm and what consumers pay in the grocery story is too large.

When asked which generation they feel is influencing markets the most, 89% said millennials. Only 6% said the Homeland and Generation X generations respectively.

Connecting with consumers via social media has been long discussed and encouraged in the dairy industry. When it comes to correcting misconceptions of consumers, 73% of farmers said social media is the best avenue.  Farm websites were also included as a solution, 27% of farmers said having a website for the farm is the best communication channel.

Recently there’s been a lot of discussion in the industry about niche markets and GMO-free milk. If premiums were available to cover additional time and costs, 64% producers said they would consider shifting their milk supply to fit a certain consumer-driven preference.

The margin protection program is one of the most discussed and cussed issues facing farmers. An overwhelming 73% of farmers said the program can’t be fixed and needs to be scrapped. The remainder of producers said the program should be more regionalized or simply extended through the next Farm Bill.

Despite all of the issues facing farmers, still two-thirds of producers said they plan to expand their farms to some degree in the future. Farmers looking to expand say the biggest challenges to making those plans work are the permitting process and finding adequate labor to expand.