Marrison, D. L., Associate Professor, The Ohio State University

ABSTRACT

The dairy industry accounts for $56,908,000 of gross cash receipts for the five northeast Ohio counties of Ashtabula, Geauga, Lake, Portage, and Trumbull Counties. Early in 2013, community leaders from these counties expressed concern about the long term viability of the dairy industry.  Looking to the future, there are many difficult issues facing continued and expanded milk production. In an effort to understand better how these issues are playing out in northeast Ohio, OSU Extension was requested to conduct a survey of northeast Ohio dairy farms.  This survey was mailed to 187 dairy producers in the spring of 2013.  81surveys were returned providing a 43.3% total response rate.  Seventy-eight percent indicated they do not plan on leaving the dairy industry during the next five years.  For the producers who responded they were thinking of exiting the dairy industry, the major reasons cited were: retirement with someone else taking over and shifting to other livestock or cash crops.  Thirty-five percent of the farms indicated they would expand their operation which would increase the overall cow numbers by 6 percent. Participants were asked to select the facility improvements they plan on investing in over the next five years with the top three responses: housing for heifers, increasing cow comfort, and manure handling systems.  They also listed the top three management improvements they anticipated to make over the same time period to be feed management, genetic improvement, and milking herd health management.  Respondents were asked to rate the importance of different influences or support services to their operations.  The three highest rated areas included: dairy equipment and service, land availability, and labor. The results of this survey are being used to plan educational events by OSU Extension to help maintain and grow the dairy industry.

Background

In the five northeast counties of Ohio (Ashtabula, Lake, Geauga, Portage & Trumbull) there are currently 187 producers milking 14,200 dairy cows accounting for $56,908,000 of gross cash receipts (NASS, 2013).  This accounts for approximately 25% of the gross income which is generated by the industry of agriculture in northeast, Ohio.   Over the past six years, the region has lost 37% percent or 110 of its dairy farms and the number of milking cows has declined by 3.7% or 548 cows (Census of Ag, 2007).  

Milk and cheese production have been major economic contributors to the agricultural industry in northeast Ohio for many years.  One of the nation’s largest Swiss Cheese plants is located in Geauga County, Ohio.  Early in 2013, community leaders from these counties expressed concern about the long term viability of the dairy industry especially in light of the region losing 37% of its dairy farm operators.  Looking to the future, there are many difficult issues facing northeast Ohio in order to maintain its dairy industry. These include, but are not limited to: housing pressures, generational transition, federal milk pricing, input costs, workforce, waste management, and state regulations.

In an effort to better understand how these issues are playing out in northeast Ohio, a group of organizations worked together to develop a dairy survey.  These organizations included: OSU Extension, Geauga Growth Partnership, TeamNEO, Growth Partnership for Ashtabula County, Portage Development Board and the Youngstown-Warren Chamber of Commerce.  With the survey results, these organizations will be able to identify and implement strategic programs to enhance the northeast Ohio dairy industry.

Response Rate & Demographics

The dairy survey was mailed to 187 dairy producers in Ashtabula, Geauga, Lake, Portage, and Trumbull Counties in March 2013.  One-hundred fifty-four of these producers are licensed to ship Grade A (fluid milk) with the remaining 33 licensed to ship Grade M (manufacturing grade milk). Fifty-four farms responded to this initial mailing for a 28.9% response rate.  A second mailing was mailed in April 2013 to the non-respondents.  Twenty-seven of these surveys were returned for  final response rate of 43.3%.  The following number of surveys were returned from each county in the region: Ashtabula-17 (32.1% response rate), Geauga-35 (55.5% response rate), Lake-1 (50% response rate), Portage-2 (10.0% response rate) and Trumbull-26 (53.1% response rate).

Fifty-three percent (n= 43) of the respondents reported they ship their milk through a cooperative with the remaining 46.9% (n=38) shipping as independent producers.  Eighty-six percent (86.4%) of the respondents ship Grade A (n=70) with the remaining shipping Grade B.

The respondents farm a combined 22,724 acres in the region with an average of 280.5 acres per operation (s.d. 524.4).  The range of farm acreage was 7.5 acres to 4,000 acres.  The respondents reported milking 6,001 dairy cows with an average herd size of 74 cows (s.d. 158.5).  The 6,001 cow numbers represents 42.3% of the total milk cows in the region (n=14,200).  The number of milk cows per farm ranged from 8 to 1,250 and the average milk production per cow was reported as 56.3 pounds per day (s.d. 12.9).

Seventy-six respondents reported 316 family members working on the farms.  The average per farm was 4.2 family members (s.d. 2.6) of which 2.3 were classified as full time (s.d. 1.6).  Thirty-two of the farms (39.5%) reported hiring non-family help.  Non-family help was reported as 131 persons or an average of 4.1 per farm (s.d. 5.8).  Forty-eight percent (47.7%) of these workers were classified as full-time workers.  Three farms reported hiring 14 migrant workers.

Five-year Outlook

As part of the survey, respondents were asked to answer questions about their intentions during the next five years. The first question asked participants was if they plan to exit the dairy business during the next five years.  Sixty-three of the respondents (77.7%) indicated they do not plan on leaving the dairy industry.  For the 18 producers who responded they were thinking of exiting the dairy industry, the major reasons cited were: retirement with someone else taking over (44.4%), shifting to other livestock or cash crops (38.9%), can’t make it financially (27.8%), and retirement with no one taking over the farm (27.8%).  Table 1 shows the results of their selections.

 

Reasons for Exiting Dairy Business	Percent of Exit Farmers Citing this Reason
Retirement, someone else taking over	44%
Shift to other livestock, cash crops, or other agriculture	39%
Can’t make it financially	28%
Retirement, no one taking over	28%
Want more time for family and other interests	17%
Other	17%
Better opportunities for off-farm employment	6%
Developer will buy land	0%

Table 1. Reasons for Exiting the Dairy Business.  Note: Respondents (n=18) were asked to select up to three choices.

It should be noted that none of the respondents plan on exiting the business by selling their farm to a housing developer.  Some of the other reasons cited for exiting the dairy business during the next five years included: lack of quality help, drought of 2012, lack of forage supply, and death of the principal operator.

The second question asked what major objectives must be reached for them to continue to operate their dairy farm.  Fifty-four individuals responded to this question with the results shown in Table 2. Fifty percent responded they needed to grow their herd size to meet profit goals.

 

Major Objectives to Meet in Future to Continue Milking	Number	Percent of Responses
Grow the size of my herd in order to meet profit goals	27	50%
Other	19	35%
Modernize facilities to meet profit or family goals	13	24%
Change my style of dairying to meet profit goals (through, e.g. grazing, robotics or free stall parlors)	12	22%

Table 2. Major Objectives to Meet in Future to Continue Milking. Note: Respondents could select multiple choices.

Over 1/3 (35.2%) listed “Other” as their response to this question. Some of the other major objectives listed included: stay the same (n=4); graze more (n=2); more value added projects such as cheese and bottling milk; continue to be more efficient; remodel barn; build a heifer facility; change to organic; watch expenses and cut where possible; continue to increase crop farming acreage to mitigate feed expense; will add three robots; better manure storage; improve genetics; clear more land, repair existing buildings and better grasses for grazing.

Respondents were also asked whether they planned on expanding their dairy operation during the next 5 years.  Twenty-eight farms (34.6%) indicated they would expand adding an additional 818 milk cows in the region. The range for the additional cows per herd ranged from 3 to150 cows. 

For the respondents looking to expand their operation, each was asked to select three major factors which might limit their expansion plans besides milk prices and input costs (such as feed and fuel). Fifty-one of the respondents provided answers to this question and their selections can be seen in Table 3.  The top three factors limiting expansion were: land available to grow crops (60.8%), inadequate labor or unavailable labor (31.4%), and access to financing (29.4%).

 

Major Factors Limiting Expansion (not related to milk prices and feed & fuel input costs)	Number	Percentage of Responses
Land available to grow crops	31	61%
Inadequate or unavailable labor	16	31%
Access to financing	15	29%
Local, State and/or Federal Regulations	10	20%
Land available for manure disposal	10	20%
Taxes	7	14%
Declining community support generally for dairy operations	7	14%
Other	6	12%
Weather	5	10%
Commercial or residential development in my area	5	10%
Infrastructure	3	6%
Community reaction, including zoning or permitting obstacles	3	6%

Table 3. Major Factors Limiting Expansion (not related to milk prices and feed & fuel input costs). Note: Respondents could select multiple choices.

Participants in the survey were asked to select the facility improvements they plan on investing in over the next five years.  Sixty individuals responded to this question.  The top three responses were: housing for heifers (55.0%), increasing cow comfort (51.7%), and manure handling systems (35.0%). Some of the other facility improvements cited for the next five years were to build a machinery storage shed (n=2) and invest in a barley fodder system.

 

Facility Improvements Planned for the Next Five Years	Number	Percentage of Responses
Housing for heifers	33	55%
Cow comfort	31	52%
Manure handling systems, including storage	21	35%
Feed handling systems, including storage	20	33%
Housing for calves	19	32%
Housing for dry cows	13	22%
Housing for milk cows	12	20%
Milking systems or facility, e.g. robots	9	15%
Renewable energy or energy conservation	5	8%
Other	4	7%

Table 4.  Facility Improvements Planned for the Next Five Years Note: Respondents could select multiple choices.

Dairy farmers were also asked to select which management improvements they anticipated to make over the next five years.  Fifty-seven of the participants responded to this question.  The top three management areas which improvement will be sought are: feed management (57.9%), genetic improvement (50.9%), and milking herd health management (45.6%).

 

Management Improvements Planned for the Next Five Years	Number	Percentage of Responses
Feed management	33	58%
Genetic improvement	29	51%
Milking herd health management	26	46%
Calf and heifer health management	23	40%
Financial management	20	35%
Environmental improvement or conservation practices	13	23%
Transition cow management	12	21%
Other	6	11%

Table 5.  Management Improvements Planned for the Next Five Years Note: Respondents could select multiple choices.

Under other management issues listed, the major item listed under “Other” comments was to improve their management ability to grow high quality crops (n=3) and pasture management.

General Issues

Each farm was also asked to respond to general issues affecting their farm.  Respondents were asked to rank the importance of related topics to their farm and to provide qualitative feedback on their greatest success in dairy farming, their greatest concern for the future of dairy farming in Northeast Ohio and to provide advice on how to maintain or increase regional milk production.

Eighty-eight percent of the respondents indicated that dairy equipment and service was very important to their operations.  Land availability was also ranked very important by 69% of the respondents.  Veterinarians, labor, milk market risks and farm equipment were also rated very important by about half of the respondents. 

           

Importance of related topics to dairy farms	Very  Important	Somewhat Important	Not     Important
Dairy equipment and service	88%	12%	0%
Land availability	69%	19%	12%
Veterinarians	57%	30%	13%
Labor	54%	38%	8%
Milk market risks	51%	37%	12%
Farm equipment and service	49%	45%	6%
Feed providers	47%	38%	15%
Availability of financing	36%	39%	25%
Local community acceptance/support	32%	45%	23%
Outside advisors (nutritional, genetics, financial, Extension, legal/regulatory)	26%	42%	32%

Table 6. Importance of related topics to dairy farms.

Summary & Implications:

Since the 2007 Census of Agriculture was taken, Northeast, Ohio has lost over 37% of its dairy farm operation.  The survey shows an additional 18 producers or 10% plan on exiting the dairy business over the next five years.  Most of the farmers exiting (72.2%) will be due to retirement. There is a silver lining as the data points to the number of cows increasing in the region during the next five years.  Since, 2007 the region has lost only 3.7% or 548 cows (Census of Ag, 2007).   In this survey, 28 farms (34.6%) indicated they would expand their operation by adding an additional 818 milk cows in the region which would translate to an overall growth in milking cows of 16%. 

As the respondents looked to the future, over 50% responded they need to grow their herd size to meet profit goals (Table 2).  For the committee’s purposes, over 1/3 (35.2%) listed “Other” as their response to this question.  These responses included the need for more intensive grazing, adoption of value added processes such as cheese production, adoption of new technology in crop production and examining new advances in milk production.  Many of these issues will be targeted in future programs offered by OSU Extension and its partners. 

For the farms looking to expand their herd size, they reported the top three factors limiting expansion were: land available to grow crops (60.8%), inadequate labor or unavailable labor (31.4%), and access to financing (29.4%).  The major concern for land available to grow crops will be a tough hurdle to overcome for many farmers.  With the rising price for corn and soybean from 2010 to 2013, competition for land has intensified across Ohio. This competition could moderate with a drop in corn and soybean prices.  The research team plans to offer additional farm lease and human resource management workshops to help address some of these limiting factors. 

For facility improvements, 55% indicated they would be looking at adding housing for heifers and increasing cow comfort.  Each summer, the Ashtabula County Dairy Service Unit with OSU Extension offers educational tours for producers.  To help producers gain knowledge, it is recommended the groups feature a farm who has added additional heifer housing for the 2014 summer tour.  It was also noted in Table 5 the need for workshops which help increase producers’ feed management skills, genetic management and herd health.

In summary, milk and cheese production have been major contributors to the agricultural economy in northeast Ohio for many years and it appears it will continue to be a solid player in the Northeast Ohio farm economy in the near future.  The feedback received from this survey will allow the group to develop targeted educational programs.  It also has provided valuable insight local politicians and economic development organizations.  It is recommended the survey be conducted again in five years.

Citations:

2012 Pennsylvania Dairy Industry Producer Survey (2012). Center for Dairy Excellence.  Web location: http://centerfordairyexcellence.org/

Northeast Ohio Dairy Survey (2013).  Marrison, D.L. Can be accessed at: http://ashtabula.osu.edu/topics/agriculture-and-natural-resources/research

Northeast Ohio Dairy Survey Summary Paper (2013). Marrison, D.L. Can be accessed at: http://ashtabula.osu.edu/topics/agriculture-and-natural-resources/research.

Ohio Ag Statistics (2012).  http://www.agri.ohio.gov/divs/Admin/Docs/AnnReports/ODA_Comm_AnnRpt_2012.pdf

Census of Agriculture (2007).  2007 Census Volume 1, Chapter 2: County Level Data.  http://www.agcensus.usda.gov/Publications/2007/Full_Report/Volume_1,_Chapter_2_County_Level/Ohio/st39_2_011_011.pdf

Acknowledgements:

The author would like to thank Geauga Growth Partnership, TeamNEO, Growth Partnership for Ashtabula County, Portage Development Board and the Youngstown-Warren Chamber of Commerce for helping with reviewing the survey in its development stages and for helping to promote the completion of the form.

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