From Andrew M. Novakovic, E.V. Baker Professor of Agricultural Economics Emeritus - Cornell University, New York
The U.S. dairy farming sector is a miracle wrapped in a tragedy. It is a story of amazing success. Since the middle of the 20th Century, American farmers have increasingly specialized their production focus. Since then, U.S. farmers have had an enviable record of increasing production, being more efficient, and providing consumers with a nutritious, high quality product at an affordable price. For much of this time period, retail prices of dairy products increased at half the rate of general consumer price inflation. That is a very good success story for milk producers.
The tragedy is in the change in the structure of the farm sector and the transformation of rural communities. Although farms run by families remains the norm, dairy farms have been decreasing in number while increasing in size. The dairy farms of today are generally far more successful than dairy farms of a half century ago, both in terms of productivity and profitability measures, but this has come at the expense of many hard-working farm families who simply could not survive, much less prosper.
The ongoing question is how long will these trends endure? Is there a limit to the growth in the U.S. dairy sector? When will dairy farm numbers level off and stabilize, and how soon does that occur?
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