2 Introduction

The geographic center of the U.S. population¹ as well as that of dairy cows in the United States are both located in Missouri². In the United States, 2000 production data ranked Missouri:

• Seventeenth in total milk production.
• Fifteenth in the number of dairy cows.
• Forty-first in milk production per cow³.

The number of Missouri farms with dairy cows has decreased in the past 25 years from 21,000 to 3,900⁴. Milk production in Missouri is at a level such that consumption of dairy products by Missourians exceeds Missouri production. Since 1993, Missouri has become a milk deficit state and imports one-third of its dairy consumption needs⁵.

The Missouri Agricultural Statistics Service reported 3,900 Missouri farms stocked with 150,000 dairy cows in 2000⁶. We estimate these commercial dairy farms generated $304 million in gross farm income. This income is respent to purchase agricultural inputs and pay family living expenses in local communities throughout Missouri. This multiplier effect supports almost 4,500 additional jobs in the state and provides an additional $210 million impact on Missouri's economy.

Missouri's dairy industry contributes several strategic assets to the national dairy industry, including headquarters of Dairy Farmers of America, the largest dairy marketing cooperative in the United States and DeLaval, the largest dairy equipment supplier in the United States, is located near Kansas City.

This competitive audit identifies the opportunities for a successful dairy industry in Missouri. The three sections of the audit are as follows:

1. Analysis of the historical economic, structural, and competitive trends affecting the dairy production industry in Missouri during the past 25 years.
2. Analysis of the current competitive position of Missouri's dairy production industry.
3. Identification of systems, strategies and economic opportunities available to the industry and to producers prepared to adapt to structural and competitive changes.

² U.S. Top Dairies: Benchmarks for Success, Mark W. Stephenson, 5 th Western Dairy Management Conference, Las Vegas, Nevada, April 4-6, 2001.

³ USDA, National Agricultural Statistics Service.

⁴ USDA, National Agricultural Statistics Service.

⁵ Assumes U.S. per capita milk consumption spread over the Missouri population

⁶ For consistency of data series between states through time, throughout this report the number of farms with milk cows is based upon National Agricultural Statistics Service estimates. The number of commercial dairy operations within Missouri is reported obtained from the Missouri State Milk Board. Missouri State Milk Board data listed 2,291 Grade A permits or Grade B certificates for commercial dairy operations in December 2000.