Prepared by William Alan Coats May 13, 2013

Florida Dairy Report

Summary: Florida produces 2.3 billion pounds of milk and dairy products each year, earning 412 million dollars from the industry. This production level is becoming a major part of the dairy industry in the southeast, but remains a small part of overall national production. Dairy production in Florida is led by Okeechobee, Gilchrist, and Lafayette counties. The vast majority of production takes place on very large farms, many of which are owned by white farmers. Based on a comparison between 2007 and 2002, the dairy industry in Florida seems to be consolidating, as there are fewer farms but many more cows per farm and greater income per farm. Cows in Florida produce the most milk during the months of March, April, and May. These cows produce 19,067 pounds of milk per cow compared to the national average of 21, 337 pounds of milk per cow. However, the average Florida cow is improving relative to the national average. Florida fluid milk sales mostly consist of whole, 2%, 1%, and skim milk. However, percentages of whole milk sales are declining, while 1%, 2%, and organic are all noticeably increasing. Milk prices have risen back above pre-recession levels. The 2011 price per hundred pounds of milk was $24.10, back up after it fell from $22.60 to $16.90 between 2008 and 2008. Replacement cow prices fell dramatically after the recession, and are continuing to be relatively cheap. According to a research report on somatic cell counts on dairy cows published by the USDA, Floridas average somatic cell count of 274,000 cells per milliliter is above the national average of 228,000 cells per milliliter. Florida had 5.6% of its test days go above the national Grade A limit of 750,000 cells per milliliter. In addition, 15.3% of days went above 600,000 cells/ml, 24.7% went above 500,000 cells/ml, and 35.3% went above 400,000 cells/ml. Nationally, the report found that as herd size increased, average somatic cell count decreased. In herds with fewer than 50 cows, 5.1% of herd test days were above 750,000 cells/ml, compared to 0.0% of test days in herds with more than 1000 cows. Also, herds fewer than 50 cows averaged 286 cells/ml, compared to 184 cells/ml in herds with more than 3000 cows. Somatic cell count seemed to peak in late winter and between the months of June and September, and was lowest in early winter. In addition, state average SCC was generally lower than the national average in western, and higher than the national average in southeastern states. A noticeable decline in SCC has occurred nationally through time, going from a national average of 322 in 2001 to 228 in 2010.

Table 1. Milk Cows (thousands) Average Milk per Cow (pounds) 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 Florida 125 115 119 114 119 16,832 17,167 18,070 18,605 19,067 United States 9,192 9,205 9,198 9,124 9,198 20,199 20,387 20,569 21,029 21,337 Florida % of total 1.36 1.25 1.29 1.25 1.29 83.33 84.21 87.86 88.47 89.36 Source: USDA Economic Research Service, U.S. milk production and other related data, 9/20/2012 Over the past five years, Florida has maintained a dairy production level that is a relatively small part of the overall industry, around 1.3%. Also, the amount of milk produced per cow is increasing every year both in Florida and in the industry as a whole. While Florida produces below the national average per cow, it is coming closer to the average, increasing from 83.33% to 89.36% of the national average between 2007 and 2011 (USDA ERS 2012). Table 2. Farms 2007 2002 Number of Cows Average Farm Size (# of cows) 284.02 156.93

422 119,856 923 144,843 Farms by Inventory, 2007 Farms Number of Cows % of total cows 1 to 9 282 643 .54 10 to 19 8 90 .08 20 to 49 3 78 .06 50 to 99 11 806 .67 100 to 199 9 1,332 1.11 200 to 499 35 11,552 9.6 500 or more 74 105,355 87.90 Source: USDA Ag Census, Table 11: Cattle and Calves - Inventory and Sales: 2007 and 2002

The number of dairy farms in Florida was drastically reduced between 2002 and 2007. The number of dairy cows declined somewhat, but the average dairy farm size still increased significantly, from 157 cows to 284 cows per farm. It would seem that many dairy herds were consolidated during this time. Table 3. Milk and other dairy products from cows-Florida Farms $1000 $1000/Farm 2007 227 412,211 1,815.9 2002 452 371,691 822.3 Source: USDA Ag Census, Table 2: Market Value of Agricultural Products Sold Including Direct Sales: 2007 and 2002

Florida sold $412,211,000 worth of milk and other dairy products from cows in 2007, ranking 17th in the United States. This is an increase from 2002, despite the decrease in the number of farms. The decrease in the number of farms combined with the increased money value sold caused the average Florida dairy farm to be worth 221% more in 2007 what it was in 2002. This matches up with the pattern of dairy herd consolidation mentioned earlier (USDA 2007).

Table 4. Summary by Market Value of Dairy Products Sold: 2007 Total Sales Farms $1000 Less than $1000 N/A N/A $1000 to $2499 30 N/A $2500 to $4999 43 121 $5000 to $9999 11 51 $10000 to $24999 6 24 $25000 to $49999 4 52 $50000 to $99999 N/A N/A $100000 to $249999 11 1814 $250000 to $499999 9 N/A $500000 to $999999 17 11395 $1000000 or more 96 395,712 All farms 227 412,211 Source: USDA Ag Census, Table 59. Summary by Market Value of Agricultural Products Sold: 2007 In 2007, the vast majority of dairy product earnings were earned by farms that made $1,000,000 or more. Smaller farms (those earning less than $50,000) made only $248,000, compared with the total state earnings of $412 billion. These statistics show that the dairy industry in Florida is dominated by large farms, which is also the case in many other states.

Table 5. Summary by Farm Typology: 2007 Small Family Farms

Milk Cows Total Limited Resourc e 61 143 61 N/A N/A N/A N/A N/A 14.5 .1 21.6 N/A N/A N/A N/A N/A Retirement Residential/ Lifestyle 104 300 100 3 1 N/A N/A N/A Farming Occupation/ Lower Sales 55 162 53 2 N/A N/A N/A N/A Farming Occupation / Higher Sales 9 611 1 1 5 2 N/A N/A 2.1 .5 .4 9.1 45.5 22.2 N/A N/A Large Family Farms 9 882 1 N/A 5 2 1 N/A 2.1 .7 .4 N/A 45.5 22.2 2.9 N/A Very Large Family Farms 87 74,335 N/A N/A N/A 3 31 53 20.6 62.0 N/A N/A N/A 33.3 88.6 71.6 Nonfamily Farms 31 43,232 4 1 N/A 2 3 21 7.3 36.1 1.5 9.1 N/A 22.2 8.6 28.4

Farms Number of Cows 1-9 10-49 50-99 100-199 200-499 500+ Farms Number of Cows 1-9 10-49 50-99 100-199 200-499 500+

422 119,856 282 11 11 9 35 74 422 119,856 282 11 11 9 35 74

66 191 62 4 N/A N/A N/A N/A 15.6 .2 22.0 36.4 N/A N/A N/A N/A

Percentage by Farm Type

24.6 .3 35.5 27.3 9.1 N/A N/A N/A 13.0 .1 18.8 18.2 N/A N/A N/A N/A

Source: USDA Ag Census, Table 64. Summary by Farm Typology: 2007

The vast majority of milk cows are on very large family farms or nonfamily farms. These types of farms tend to have 100 or more milk cows, while small family farms tend to have 50 or fewer milk cows. The statistics support the idea that most dairy cows in Florida exist in large farms, with 97.5% of all dairy cows on farms with inventories of over 200 cows (USDA 2007). On Farm Typology: The 2007 Census of Agriculture uses a typology that classifies farms by sales and operators occupation. Residential/lifestyle farms are those that produced less than $250,000 in sales of agricultural products and where the principal operators reported something other than farming as their primary occupation. Retirement farms are those that produced less than $250,000 in sales and where principal operators who reported that they were retired. Large family farms are those with sales between $250,000 and $500,000 and very large family farms are those with sales over $500,000 (USDA 2007). The majority of farms are small family farms (69.8%), though there are some very large family farms and nonfamily farms (27.9%). Large farms under this classification also contain the vast majority of the overall number of cows (98.8%), and make up the vast majority of the dairy market (USDA 2007). In dairy cattle and milk production in Florida, most operators tend to be white. The Ag Census lists 2 American Indians, 2 Asians, 3 African Americans, no Pacific Islanders, 207 Whites, and 13 Hispanic

operators among those who reported their race. Among principal operators, in 2007, there were 6 Hispanics in dairy cattle and milk production, compared to 62 in 2002. There were 23 female principal operators in dairy cattle and milk production in 2007, compared with 76 in 2002. There were 17 farms listed as having Hispanic operators that produced milk and other dairy products from cows. The value of sales for these 17 farms is listed at $53.6 million. The high percentage of white principal operators is in line with Florida trends, with 35,012 of the total 37,034 principal operators being white (94.5%) (USDA 2007). Florida dairies produced 2.27 billion pounds of milk in 2011, up from 2.13 billion pounds produced during 2010. Annual milk production per cow was 19,067 pounds, up from 18,658 pounds per cow in 2010. On January 1, 2012, there were 119,000 milk cows on Florida farms and commercial dairies, up from 114,000 milk cows a year earlier. The top ranking counties for dairy cattle on January 1, 2012, were Okeechobee, Lafayette and Gilchrist. In 2012, Okeechobee County had 30,000 milk cows and Lafayette and Gilchrist each had 14,800 milk cows. Florida ranked 19th among States in the number of milk cows. Cash receipts from marketing of Florida milk in 2011 totaled $545 million, up from $541 million in 2010. In 2011, the peak price of replacement milk cows was $1,620 per head in October. The annual average farm-gate price for milk in Florida was $24.10 per hundredweight in 2011, up from $20.70 in 2010 (Florida DACS 2012). Table 6.
Milk Cows and Production: February 2012 and 2013 Milk cows Average Milk per cow Average Milk production 2012 (1000 2013 (1000 2012 2013 2012 2013 Change head) head) (pounds) (pounds) (million (million from 2012 pounds) pounds) 122 122 1720 1655 210 202 -3.8

Florida

Source: USDA: NASS Agriculture Statistics Board, Milk Production, 2013 According to a monthly report from the USDA comparing February 2012 and February 2013 milk production, Floridas milk production declined during that time. The number of cows remained the same, but each cow produced a smaller amount of milk, and the total milk production was 8 million pounds (or 3.8%) smaller.

Table 7.
Monthly Production per cow Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Pounds Jan 1410 1360 1435 1520 1485 1470 1550 1660 1615 1775 Feb 1335 1290 1415 1475 1425 1415 1530 1540 1595 1690 March 1515 1435 1550 1640 1640 1610 1655 1760 1820 1865 April 1455 1415 1515 1570 1540 1580 1568 1710 1770 1740 May 1450 1385 1525 1585 1520 1615 1625 1700 1700 1725 June 1345 1290 1395 1440 1415 1465 1440 1535 1600 1630 July 1250 1215 1340 1315 1350 1380 1375 1450 1530 1520 Aug 1190 1120 1225 1235 1180 1215 1240 1325 1335 1400 Sep 1345 1020 1025 1105 1100 1150 1160 1180 1255 1300 Oct 1355 1105 1165 1135 1185 1120 1225 1230 1335 1350 Nov 1100 1180 1250 1220 1245 1200 1320 1360 1465 1460 Dec 1265 1355 1450 1360 1390 1360 1520 1545 1660 1630 Total 15387 15218 16326 16591 16447 16832 17167 18070 18658 19067

Source: Florida Department of Agriculture and Consumer Services, Florida Milk Cows and Production: Milk Cows, Monthly Milk Production per Cow, and Annual Production: 2002-2011 Milk cows in Florida produce the most milk between January and June, usually peaking in March, April, and May. The total amount of milk produced has increased every year, but the trend of maximum milk output occurring in spring has remained constant. The minimum milk output generally occurs between August and November (Florida DACS 2012). Table 8. Florida Replacement Milk Cow Price January April July October Year (dollars per head) 2002 1840 1880 1820 1650 2003 1600 1500 1450 1510 2004 1490 1700 1900 1810 2005 1860 1860 1940 1960 2006 1980 1910 1880 1850 2007 1770 1850 2050 2250 2008 2200 2250 2350 2250 2009 1990 1550 1550 1650 2010 1360 1450 1690 1400 2011 1360 1480 1550 1620 Source: Florida Department of Agriculture and Consumer Services, Florida Replacement Milk Cow Price: Price per Head, by Quarter: 2002-2011 Replacement milk cow price rose to $2350 per head until 2009, when it decreased significantly. It is now back to pre-recession prices at $1620 per head (Florida DACS 2012).

Table 9. Florida Milk Price: Monthly and Annual Price for Milk Marketed by Producers to Plants, 2002-2011 Jan Feb March April May June July Aug Sep Oct Nov Dec Weighted Average Year (dollars per cwt) 2002 16.3 16.2 15.8 15.6 15.4 15.2 14.8 14.7 14.7 14.4 14.8 14.7 15.2 2003 14.7 14.3 13.9 13.6 13.7 13.7 13.8 15 17.8 17.8 18.4 18 15.3 2004 16.1 15.8 16.1 17.8 23.8 25.2 22.1 18.9 18.3 19.1 18.6 18.7 19.2 2005 20.9 18 19.6 18.2 18.8 17.7 18 15.6 17.9 18.6 18.9 18 18.6 2006 17.5 17.5 16.5 15.2 14.9 14.7 15.3 15 14.9 16.5 16.5 16.5 15.9 2007 17.6 17.4 18.2 18.9 19.8 21.8 24.9 25.8 26 25.9 25.9 23.9 21.9 2008 24.5 23.2 20.4 22 21.9 22.8 25.5 23.9 23.1 21 22.2 21 22.6 2009 20.4 16.3 14.9 15.8 16.3 15.5 15.7 15.5 16.1 17.7 18.2 19.4 16.9 2010 20 20 19.6 18.4 19 20.5 21 21 21.4 22 22.8 22.3 20.7 2011 20.8 21.9 23.3 24.2 24.4 25.3 25.8 26.6 26.6 24.3 23.7 23.2 24.1 Source: Florida Department of Agriculture and Consumer Services, Florida Milk Price: Monthly and Annual Price for Milk Marketed by Producers to Plants, 2002-2011 According to Florida Dairy Farmers, Floridas milk promotion organization, Lafayette is Floridas leading dairy county with 21 farms; Okeechobee is second with 19. The states more than 130 dairy farms are primarily owned and operated by second- and third-generation farmers. Florida dairy farmers recycle about 170,000 tons of byproducts such as citrus pulp, brewers grain and whole cottonseed that are consumed by the cows instead of ending up in landfills. There are about 118,000 dairy cows in Florida that collectively produce about 2.1 billion pounds of milk a year. The total represents 253 million gallons of Florida-produced milk in the grocery store (Florida Dairy Farmers 2013). Table 10. 2007 Product Whole 36.4 2% milk 27.03 1% milk 11 Skim 12.44 Fortified 2.96 Flavored 7.48 Organic 1.65 Buttermilk .46 Eggnog .28 Other .29 Source: Calvin Covington Florida fluid milk sales by product 2008 2009 2010 (percent of total sales) 35.33 34.88 33.65 27.84 23.24 27.68 11.69 12.1 13.28 12.64 12.71 12.28 1.78 1.57 2.01 7.44 7.45 7.61 2.25 2.2 2.49 .43 .43 .43 .26 .24 .41 .34 .19 .15 2011 32.6 28.17 13.42 12.36 1.57 8.39 2.69 .45 .35 0

The amount of whole milk being sold is decreasing in proportion, while most other categories are increasing slightly or had no relative change. 1% and 2% , and organic milk are all consistently increasing in percentage of total sales (Covington 2013). At the 48th Florida Dairy Production Conference, Calvin Covington listed potential policy problems for the Florida dairy industry. The speaker pushes for increased fluid milk sales, maximized political and economic resources, and focusing existing money on programs that significantly benefit the dairy industry. He also says that a major challenge for future federal dairy programs is money (Covington 2012), further emphasizing that the dairy industry will need to be more cost-efficient. Here is a quote from his address: A major challenge for future Federal dairy programs is money. According to information released by the House of Representatives Subcommittee for Dairy and Livestock, $5.98 billion was spent on dairy programs from FY02-FY11. Of this amount $3.65 billion was spent on the Milk Income Loss Contract Program and $2.16 billion for the Dairy Product Price Support Program. For the next ten years, FY12-FY21, the Congressional Budget Office baseline for dairy programs is $450 million. My suggested priorities for Federal dairy policy as it pertains to Florida are: 1. Make sure the cure is not worse than the disease. No new dairy legislation is preferable, if proposed programs worsen the situation, do not increase milk sales or dairy farmer income, or the outcome of the proposed legislation is uncertain. 2. Spend resources on improving current Federal programs to better benefit dairy farmers. And, terminate existing programs that increase dairy farmer costs. 3. Increase fluid milk sales - one of the best ways to increase income for all dairy farmers. 4. Defend the Federal Order system. Federal Orders level the playing field among producers, cooperatives, and processors. Orders decrease price volatility, strengthen producer milk prices, and promote more orderly marketing. Orders are one government program that provides a return on investment (government outlay $5.5 million/year past 10 years). 5. Maximize the economic and political resources available. (Covington 2012) Table 11. Year

1950 1960 1970 1980 1990 2000 2010 2011 11 vs. 10 (% change) Source: Calvin Covington

Florida (mil lbs) 598 1,306 1,641 2,028 2,526 2,463 2,127 2,269 6.7

Southeast (mil lbs) 14,056 14,110 14,117 14,440 14,418 13,542 9,013 9,096 0.9

Fl% of total SE production 4.3 9.3 11.6 14 17.5 18.2 23.6 24.9

US (mil. lbs) 116602 123109 117007 128406 147721 155292 192757 196168 1.8

Fl% of total US production 0.5 1.1 1.4 1.6 1.7 1.6 1.1 1.2

Over the years, Florida has become a more important player in the southeastern dairy industry, going from producing 4.3% of the Southeasts total milk in 1950 to now producing around 25%. This is partly because the Southeasts total milk production has decreased significantly from 14.4 million lbs in 1990 to 9.1 million pounds today. However, Florida has remained a relatively small part of the overall US dairy industry, producing only 1.2% of the total product. According to statistics published by Progressive Dairyman, Dairy is the 2nd most valuable ag commodity on the East Coast, making 9.5% of all commodity receipts and grossing $7.8 billion in 2010. In the study, the East Coast is defined as being all states east of the Mississippi River, as well as Louisiana and Arkansas, but without Indiana, Illinois, Michigan, and Wisconsin. In addition, Florida ranked 19th in milk production nationally. They list an average herd size of 850 cows, a growth of 36% from 2010-2011. In addition, Okeechobee County is the 8th most productive county for dairy on the East Coast, producing 57 million pounds in May 2011 (Progressive Dairyman 2012). Table 12. Herd test days (no.) Cows per herd (no.) Average daily milk yield (lbs) Average SCC Herd test days with greater than

(cells/mL, 750,000 600,000 500,000 400,000 1000s) cells/mL cells/mL cells/mL cells/mL (%) (%) (%) (%) Florida 215 755.9 68.6 274 5.6 15.3 24.7 35.3 US 198,218 145.2 72.7 228 2.7 5.7 10.0 18.0 Source: Somatic cell counts of milk from Dairy Herd Improvement herds during 2010, Table 1. Characteristics of test-day milk yield and somatic cell count (SCC) from Dairy Herd Improvement herds by State during 2010

Works Cited Covington, Calvin. "Florida and the Dairy Industry: Four Key Areas." Speech. 48th Florida Dairy Production Conference. Gainesville, FL. 21 Mar. 2012. University of Florida IFAS Extension. University of Florida. Web. "Dairy Data." Economic Research Service. United States Department of Agriculture, 20 Sept. 2012. Web. <www.ers.usda.gov/datafiles/Dairy_Data/milkcowsandprod_1_.xls>. "Florida Dairy Facts." Florida Milk. Florida Dairy Farmers "Florida Agriculture by the Numbers: 2012." Florida Agriculture. Florida Department of Agriculture and Consumer Services, n.d. Web. "May 2012 Regional Statistics Combined." Progressive Dairyman. Progressive Publishing, n.d. Web. <http://www.progressivepublish.com/downloads/2012/general/2012_pd_r_stats_highres.pdf>. Norman, H. D., T. A. Cooper, and F. A. Ross, Jr. Somatic Cell Counts of Milk from Dairy Herd Improvement Herds during 2010. Rep. no. SSC12. Animal Improvement Programs Laboratory, Agricultural Research Service, USDA, n.d. Web. <http://aipl.arsusda.gov/publish/dhi/dhi11/sccrpt.htm>. "USDA Census of Agriculture." United States Department of Agriculture: 2007 Census of Agriculture. United States Department of Agriculture, 4 Feb. 2009. United States Department of Agriculture (2013). Milk Production. ISSN: 1949-1557; Source Retrieved from: http://www.nass.usda.gov/Publications/Todays_Reports/reports/mkpr0313.pdf