Peaches and cream: As demand and economic conditions improve, milk prices will stabilize

In the Dairy Farms industry, the most important success factor is the price farmers receive for raw milk. Over the five years to 2018, the price of raw milk has been highly volatile, causing revenue for the Dairy Farms industry to fluctuate. In 2016, an oversupply of dairy products caused revenue to decline 4.5%. However, demand for dairy products began to rise again in 2017, and demand is expected to further increase in 2018. Meanwhile, the price of feed, which typically makes up about half of the average dairy farm's total expenses, has declined since 2014. While this decrease would typically cause growth in profit margins, increases in the price of milk have resulted in profit declines during the latter half of the five-year period...purchase to read more.

Industry Statistics & Market Size
Revenue
$39bn
Annual Growth 13-18
-1.9%
Forecast Growth 18-23
Profit
Employment
155,436
Businesses
49,034
Market Share of Companies
There are no companies with a dominant market share in this industry

Industry Threats & Opportunities

  • The most important success factor for this industry is the price farmers receive for raw milk
  • The United States became the largest global exporter of cheese, surpassing New Zealand
  • Reduced government support could have a significant effect on milk prices
  • Industry Report - Industry Key Buyers Chapter

    Low market share concentration characterizes the Dairy Farms industry. US dairy farms are highly fragmented, with most farms consisting of family owned operations. As a result, the industry is made up of many small farms that produce a minority of revenue. Industry concentration is increasing as small dairy farms take losses and leave the industry. Meanwhile, the remaining dairy farmers are growing operations to take advantage of economies of scale and increase their profitability.Vertically integrated dairy cooperatives operate downstream from dairy farms to process, market and wholesale dairy products. The cooperatives enable dairy farmers to pool milk production, and the aggregate supply of milk can then be leveraged to assist in raising prices. Dai...purchase to read more.

    Additional Insights for the Dairy Farms Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Dairy Farms Industry are

  • Proximity to key markets
  • Superior financial management and debt management
  • Use of specialist equipment or facilities
  • IBISWorld analysts also discuss how external factors such as Price of milk and Demand from dairy product production in the Dairy Farms industry impact industry performance..

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    What's in this report

    What is the Dairy Farms Industry?

    Establishments in this industry primarily raise cattle for milk. The industry includes only the sale of raw milk and excludes the production of drinkable fluid milk and processed dairy products like butter, cheese and powdered milk. Those value-added activities are covered in the Dairy Product Production industry (IBISWorld report 31151).

    Industry Products
  • Milk for dairy products
  • Fluid milk
  • Milk for pasteurization
  • Industry Activities
  • Dairy cattle farming
  • Milking dairy cattle
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Price of milk
  • Demand from dairy product production
  • Price of feed
  • Per capita dairy consumption

  • Current Performance
  • Milk prices, exports and globalization
  • Profit and consolidation
  • Chart: Revenue Growth

  • Industry Outlook
  • Demand and price of milk
  • Barns away
  • Organic opportunities
  • Table: Dairy Farms Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Dairy Farms Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Dairy Product Production
  • Ice Cream Production
  • Dairy Wholesaling

  • Key Selling Industries
  • Animal Food Production
  • Beef Cattle Production
  • Cattle & Hog Wholesaling
  • Farm, Lawn & Garden Equipment Wholesaling
  • Fertilizer Manufacturing
  • Livestock Production Support Services
  • Veterinary Services

  • Products & Services
  • Milk for dairy products
  • Fluid milk
  • Milk for pasteurization
  • Chart: Dairy Farms Industry Products and Services Segmentation

  • Demand Determinants
  • Price
  • Population
  • Health concerns
  • Competition from substitutes
  • Innovation

  • Major Markets
  • Dairy cooperatives in other regions
  • Dairy cooperatives in the Great Lakes
  • Dairy cooperatives in the West
  • Dairy manufacturing companies
  • Chart: Major Market Segmentation for the Dairy Farms Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitPurchasesWagesDepreciationOther costs
  • Chart: Cost Structure Benchmarking – Sector vs Dairy Farms

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Dairy Farms Industry

  • Industry Globalization
    There are no major players in this industry. This report includes analysis of other companies.
    Capital Intensity
  • Chart: Level of Capital Intensity for the Dairy Farms Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Dairy Farms Industry
    Includes:
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)
  • Raw Milk Price (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Table: Industry Financial Ratios
    Cooperative
  • An organization that is owned, operated and controlled by those that use its services. Dairy cooperatives primarily assist farmers in better marketing and manufacturing their raw milk.
  • Farm Gate Price
  • The value of an agricultural product when it leaves the farm; typically lower than the retail price, as it excludes shipping, marketing and storage costs.
  • Organic
  • Farming that does not involve the use of artificial chemicals, pesticides, fertilizers or genetically modified organisms.
  • Raw Milk
  • Milk that has not been pasteurized or homogenized.
  • What Our Customers Say

    Why buy this report?

    The Dairy Farms industry market report contains strategic analysis of the key drivers influencing the industry. Save hours of time on research and prospecting using IBISWorld’s standardized, up-to-date reports on thousands of industries. Our industry research provides growth and profit forecasts for a five-year outlook period, presented in a clear and user-friendly format.

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    This report on Dairy Farms:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Dairy Farms market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Dairy Farms, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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