Dairy numbers shrinking, but herds growing

Dairy industry consolidating its operations

FORT COLLINS — Along the eastern border of Larimer County, Terrence Dye wakes each morning with the sun and oversees his herd of milking cows.

He’s done this every morning since 1985, when he moved to Colorado from upstate New York. During this time he has seen the face of the dairy industry change from numerous small farms with small numbers of cows to a small number of large farms with large dairy herds.

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Dye is the owner of Dyecrest Dairy LLC, located on Larimer County Road 13, east of Fort Collins. In 1985, he started with 700 to 800 cows. Now his dairy milks 1,350. This number seems incredible to the untrained eye, but Dye knows he is just an average size these days.

“When we came here we were the largest dairy in Colorado,” Dye said. “Now, we’re milking 1,350 cows, essentially double, and we’re just another medium-size dairy.”

The dairy industry is going the way of the corporate world, where bigger is better.

“Consolidation is just going on and on and on,” Dye said.

Dye is referring to the trend of small dairies closing and being replaced with larger, more efficient ones with lower labor costs, which leads to cheaper consumer prices.

“There’s 76,000 dairies in the United States today,” Dye said. “The best guess is that there is going to be 30,000 to 35,000 in less than 10 years. Colorado is mirroring that.”

This is not a new trend in the dairy industry. The consolidation of small dairies has been occurring for years.

“I’ve been in business for 32 years and the trend has been going on for as long as I can remember,” Dye said. “We’re kind of going the way of the hog and chicken people, just a little bit slower.”

In 2000, there were 160 dairies in Colorado. One year later, five dairies had shut down operations.

Bill Wailes, Colorado State University extension dairy specialist, believes the industry is far from seeing an end to the trend.

“The major trend in Northern Colorado is continued consolidation of farms,” Wailes said. “The trend appears to be slowing, but I expect to see it continue for at least 5 years.”

One example of how large dairies are getting is the Morwai Dairy in the cities of Gill and Hudson in Weld County, which milks 4,500 cows.

There are six large dairies in Larimer County, the largest being the Duo Dairy south of Loveland. About 2,500 cows are milked at that location and the dairy milks approximately 4,700 others throughout Larimer and Weld counties.

According to Wailes, Colorado is 26th in the nation for the number of cows. There are currently 91,000 milk cows within state borders. The state is the 18th largest dairy state in the United States with yearly production around 2.02 billion pounds of milk.

Tom Haren, co-owner of AgPro Environmental Services LLC, believes the price of milk and dairy products plays a big part in the consolidation trend. Haren relates the price of milk to the price of wheat, which hasn’t increased since the 1950s.

“(Profit) margins are smaller without a price increase,” Haren said. “Farmers have no control over price. To make the same net profit you have to grow or produce more products. Facilities are getting larger, production is increasing while the population grows.”

The increased cost of employees also influences the profit margin.

“It is hard to find employees who are willing to work for lower wages,” Haren said. “With the increased cost of business, the small guys are forced to partner up.”