Indiana dairy leaders continue to suggest that "good things are going to happen" regarding new milk processing in the Hoosier state. At the Indiana Dairy Producers annual meeting last Wednesday in Indianapolis, IDP executive director Doug Leman expressed optimism about that possibility.
"There are good things going to happen—real good things . . ." he said in his annual address to members. "I'm just thrilled as I look ahead (at) the opportunities I think we're going to have here in Indiana."
He said that Indiana is ideal for dairying because of its transportation infrastructure, availability of feed and water, and the climate.
"We've got what we need to grow dairy in this state, and I see it's going to happen," he said. "I'm hoping that soon there will be an announcement of some processing that will come into the state and create more demand for milk."
Leman added that Indiana needs more processors to handle the volume of milk being produced here.
If a processor were to choose Indiana as the site of a new processing plant, the economic value to Hoosier producers would be immense. Mike Schutz, Purdue University Ag and Natural Resources program leader and assistant director of Extension, said a new milk bottling plant, for example, would raise farmgate prices and reduce transportation costs by as much as $1 per hundredweight.
Schutz, who is an adviser to Indiana Dairy Producers, said the Indiana dairy industry is in good shape overall and has room to grow. Milk production ranks fourth in Indiana in total receipts (behind crops, hogs and poultry) and accounts for 7 percent of all agricultural income.
According to the Indiana Dairy Strategy released last March, as much as 4 million pounds of milk are shipped out of state each day for processing. Schutz said that is equivalent to 80 tanker loads of milk.
IDP leaders, backed by the Indiana State Department of Agriculture, hope to attract a processor or two that can handle the excess volume and create more value-added opportunities here in Indiana.
"The dairy industry is important to this state and to this state's economy," Schutz said, "so no wonder the strategic initiative from the Department of Agriculture (aims) to increase processing and thereby increase the size of the dairy industry."
In the past 18 years, Indiana dairy farmers have been a model of production efficiency. They have almost doubled milk production with 41 percent fewer cows.
Schutz said milk production has increased by 87 percent (186 million in 1997 to 348 million in 2015), and cow numbers have jumped 31 percent (140,000 to 184,000). However, the number of farms has dropped by 61 percent, from 1,979 farms in 1997 to 1,209 farms in 2015. Production per cow has jumped 37 percent since 1997.
By comparison, Indiana had as many as 800,000 dairy cattle in the 1930s. However, those cows produced far less than their counterparts living today.
The average annual per-cow milk production today stands at 21,850 pounds, Schutz said.
If this trend continues, the industry will come close to doubling milk production within a few more years.
"That kind of progress is really amazing," he said.
Most of the dairy cattle are concentrated in the northeastern part of the state, with pockets located in the northwestern and east central parts of the state. However, Schutz said that some counties that are leading producers of grain would be excellent locations for new dairy farms.
He added that the geographic distribution of dairy cattle could be affected by the location of a new processing plant.