4 Missouri's Dairy Competitive Position

The competitive position of the dairy production industry in Missouri is compared to dairy production in surrounding states, national production averages and other dairy production regions of the country. Each major production trend is presented independently to assess the strengths, weaknesses, opportunities, and threats to dairy production in Missouri.

Missouri currently ranks 17^th in milk production in the United States²². Figure 12 compares the number of dairy cows in the Missouri herd to identified nearby dairy states.

Figure 12. Average Number of Dairy Cows by State for 2000

Missouri has more farms with dairy cows than the leading milk producing state, California, as well as the largest number of dairy farms and the second largest number of dairy cows in the surrounding states.

Missouri has the largest number of dairy operations among those identified with fewer than 30 head. Many are Amish and Mennonite dairy operations. Missouri also has a significant number of 100 to 200 head dairy operations²³. Many of these small farms represent economic self-sufficiency for those families that operate the farms. Future economic growth opportunities are likely in this segment of Missouri's dairy production industry given the current infrastructure and facilities. Dairy farm size and cow numbers are shown in Figure 13.

Figure 13. Cow Numbers and Number of Dairy Farms

Table 6. Number of Missouri Farms with Dairy Cows in 2000 According to Herd Size

Number of Operations	1 to 29 Head	30 to 49 Head	50 to 99 Head	100 to 199 Head	200 to 499 Head	>500 Head
	1,700	740	900	510	45	5

Dairy cows are currently located throughout Missouri. Most of the cows, however, are found in the southwest and south central areas of the state. The distribution of dairy cows by county in Missouri is shown in Figure 14.

Figure 14. Dairy Cow Numbers in Missouri Counties - January 1, 2001²⁴

4.1 Milk Production Per Cow

Missouri dairy producers rank low in milk production per cow. Average milk production per cow for leading dairy states, surrounding dairy states, the United States and Missouri are compared in Figure 15.

Figure 15. Milk Production per Cow in Pounds per Year²⁵

Annual milk production per cow was 14,662 pounds in Missouri during 2000. This ranks Missouri above Arkansas, Kentucky, and Oklahoma on the list shown above. The U.S. average milk production per cow is 18,204 pounds and 21,169 pounds in California. Pennsylvania, similar to Missouri, has many small dairy farms and a humid summer climate but averaged 18,301 pounds of milk per cow in 2000.²⁶

4.2 Cost of Production

Missouri offers several competitive advantages for dairy production. Fixed ownership cost of land and the cost of feed are both competitive. The average value per acre of farm real estate is shown in Figure 16. Land values in Missouri are significantly lower than California, some Northeast states, and the Southeast growth states. Land values are also comparable to the upper Midwest states.

Figure 16. Average Farm Real Estate Values per Acre on January 1, 1999²⁷

Missouri land values vary over a wide value range depending on location and land productivity. Figure 17 shows land values for different areas of the state and crop productivity potential.

Figure 17. Average Missouri Land Values for 2001²⁸

Average real estate tax rates for the United States are shown in Figure 18. Missouri real estate tax rates are much lower than tax rates in California, northeast United States, and southeast United States. Missouri has the comparative advantage of lower real estate tax rates.

Figure 18. Average Agricultural Real Estate Taxes per Acre in 1995²⁹

Feed cost comparisons for Missouri, California, southeast United States, upper midwest, and New York are shown in Table 7. Example rations are formulated for a 1,350-pound Holstein cow producing 70 pounds of 3.5 % fat milk per day, using local market prices for undelivered ration ingredients. Cows producing 70 pounds of milk per day will produce about 20,000 pounds of milk per year. For comparison purposes, the estimated feed cost per cow per day is $2.26 in Missouri, $2.91 in California, $2.30 in the southwest, $2.27 in the upper midwest, and $2.60 in New York. In this theoretical example, Missouri has a lower feed cost per cow per day, when all other production factors are held the same.

Table 7. Feed Cost Comparison for Annual 20,000 Pounds of Milk Production per Cow

	Missouri		California		Southeast		Upper Midwest		New York
Feed Ingredient	Amount Fed/lbs	Price $/ton	Amount Fed/lbs	Price $/ton	Amount Fed/lbs	Price $/ton	Amount Fed/lbs	Price $/ton	Amount Fed/lbs	Price $/ton
Alfalfa Hay (160 RFV)	10	135	10	160	5	170	7	120	7	120
Alfalfa Haylage (160 RFV)							15	60	15	60
Corn Silage	40	20	40	25	40	30	30	20	30	25
Whole Cottonseed	5	100	5	172	6	87			5	118
Corn	7	70	9	102.5	5	90	10.3	64	10.25	87.5
Hominy Feed					5	90
Soy Hulls							5	73
Citrus Pulp					2	80
Corn Gluten Feed	4	72
Distillers Dried Grains	4	100	5	121	5	120	5	82	5	121
Canola Meal			3.1	150
Cotton seed meal					4	110
Soybean Meal 48%	2	162					2.5	157	1.3	178
3:1 Ca:P mineral	0.75	500	0.75	500	0.75	500	0.75	500	0.75	500
Cost per cow per day	$2.26		$2.91		$2.30		$2.27		$2.60

4.3 Nationwide Cost and Return Comparison

The USDA Economic Research Service estimates regional shifts in competitiveness by surveying producers to collect costs and returns from dairy producers around the United States. A national survey of more than 70,000 dairy farms is conducted by the National Agricultural Statistics Services to establish and update data used to make monthly estimates of regional dairy costs and returns. Value drivers that create large regional shifts in milk production can be identified from these summaries. Missouri is contained in the data from the corn belt region.

Pacific coast dairymen traditionally have not produced much of their feed. The minimal investments in desert dairy lots allow herd expansion by constructing lots and adding cows. Successful western dairymen continue to expand production along with management skills and sophisticated production technologies. Western dairymen have replicated the Pacific model in many of the western states. Dairies in growth pockets in the upper midwest, northeast, and Florida have also duplicated most of the management technologies used in the large western dairy herds. Adoption of these management techniques has, in some cases, allowed milk production per cow to surpass production in the western states.

Some of the key profitability factors for dairy farms in three regions of the United States are listed in Table 8. The southeast U. S. area includes Florida. Labor and investment efficiency are much higher in the Pacific area.³⁰ Investment per cow averaged $8,250 in the Corn Belt versus $2,944 in the Pacific area. Milk production was also higher in the Pacific area.

Milk production is moving west in the United States with some pockets of growth in Florida, Pennsylvania, New York, Michigan, and the plains states. Dairy production 2000-year cost estimates for the given regions of the United States are listed in Table 9. Table 9 shows specific areas where the corn belt region lacks competitive advantages when compared to the Pacific region.

• Average feed cost per hundredweight of milk produced is $7.38/cwt in the corn belt versus $6.47/cwt in the Pacific region. This $ 0.91/cwt price difference offsets the higher milk price that the corn belt producers receive
• Fixed costs are much higher in the corn belt due to the higher investment per cow for land and facilities
• Many of the other production costs are lower in the Pacific region because of increased milk production per cow in that region

The two variables most responsible for lowering the cost of producing milk are feed efficiency and labor efficiency.

Table 8. Determinants of Regional Profitability of Specialized Dairy Farms for 1993

Item	Corn Belt	Southeast	Pacific
Average Cow Numbers	52	411	348
Labor Hours Per Cow	85	41	23
Total Acres Operated	275	684	153
Milk Production Per Cow	14,876	14,531	17,462
Machinery Investment Per Cow	$1,673	$538	$266
Average Total Investment Per Cow	$8,250	$9,307	$2,944
Net Farm Income	$21,078	$185,119	$141,442
Source: Structure, Management, and Performance Characteristics of Specialized Dairy Farm Businesses in the United States. By Sara D. Short. Resource Economics Division, Economic Research Service, USDA. Agricultural Handbook Number 720.

Table 9. Milk production costs and returns, per cwt sold, 2000
Source: USDA, ERS. Cost and Returns Survey

	United States	Corn Belt	North- east	Pacific	South- east	Southern Plains	Upper Midwest
Item	2000	2000	2000	2000	2000	2000	2000
Gross value of production:
Milk	12.43	12.16	13.41	11.81	14.69	13.40	11.91
Cattle	0.95	1.19	0.84	0.68	1.03	0.97	1.07
Other income	0.54	0.46	0.42	0.54	0.49	0.36	0.67
Total, gross value of production	13.92	13.81	14.67	13.03	16.21	14.73	13.65
Cash expenses:
Feed--
Concentrates	3.62	4.06	3.56	2.92	4.73	5.00	3.57
By-products	0.23	0.30	0.04	0.53	0.48	0.17	0.12
Liquid whey	0.10	0.18	0.10	0.03	0.04	0.01	0.12
Hay	1.36	1.55	1.58	2.07	0.57	2.14	0.73
Silage	1.20	1.16	2.17	0.87	0.80	0.11	1.04
Pasture and other forage	0.10	0.13	0.03	0.05	0.07	0.09	0.16
Total, feed costs	6.61	7.38	7.48	6.47	6.69	7.52	5.74
Other--
Hauling	0.46	0.47	0.65	0.41	0.87	0.55	0.30
Artificial insemination	0.15	0.13	0.19	0.12	0.11	0.04	0.18
Veterinary and medicine	0.40	0.43	0.42	0.21	0.44	0.19	0.52
Bedding and litter	0.26	0.32	0.37	0.06	0.00	0.00	0.35
Marketing	0.37	0.33	0.43	0.46	0.48	0.25	0.30
Custom services and supplies	0.44	0.41	0.53	0.42	0.59	0.29	0.41
Fuel, lube, and electricity	0.60	0.64	0.77	0.30	0.37	0.54	0.69
Repairs	0.91	1.04	1.07	0.35	0.72	0.50	1.19
Hired labor	0.52	0.50	0.50	0.49	1.16	0.63	0.45
DHIA fees	0.08	0.07	0.09	0.07	0.05	0.04	0.08
Total cash expenses	10.80	11.72	12.50	9.36	11.48	10.55	10.21
General farm overhead	0.59	0.62	0.59	0.37	0.70	0.50	0.72
Taxes and insurance	0.31	0.28	0.41	0.12	0.33	0.15	0.39
Interest	0.99	0.82	0.90	0.73	0.70	0.69	1.34
Total, fixed cash expenses	1.89	1.72	1.90	1.22	1.73	1.34	2.45
Total, cash expenses	12.69	13.44	14.40	10.58	13.21	11.89	12.66
Gross value of production less cash expenses	1.23	0.37	0.27	2.45	3.00	2.84	0.99
Economic Costs Included:
Gross value of production:
Total, gross value of production	13.92	13.81	14.67	13.03	16.21	14.73	13.65
Economic (full-ownership) costs:
Variable cash expenses	10.80	11.72	12.50	9.36	11.48	10.55	10.21
General farm overhead	0.59	0.62	0.59	0.37	0.70	0.50	0.72
Taxes and insurance	0.31	0.28	0.41	0.12	0.33	0.15	0.39
Capital replacement	2.26	2.32	2.20	1.51	2.74	2.21	2.67
Operating capital	0.11	0.12	0.12	0.09	0.11	0.10	0.10
Other nonland capital	0.81	0.79	0.75	0.56	1.39	0.76	0.94
Land	0.01	0.01	0.00	0.01	0.00	0.00	0.01
Unpaid labor	1.51	2.46	2.09	0.41	0.29	0.72	1.72
Total, economic costs	16.40	18.32	18.66	12.43	17.04	14.99	16.76
Residual returns to management and risk	-2.48	-4.51	-3.99	0.60	-0.83	-0.26	-3.11

4.4 Economic Impact of Missouri Dairy Industry

The Missouri Agricultural Statistics Service reported 3,900 dairy farms stocked with about 150,000 dairy cows in the year 2000. Missouri State Milk Board data listed 2,291 Grade A permits or Grade B certificates for commercial dairy operations in December 2000³¹. 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. Table 10 shows estimated milk production, total value of farm production, number of jobs supported by the dairy industry, and the current economic value of the dairy industry by Missouri county.

Table 10. Economic Impact and Opportunities by County from Dairy Industry³²

County	Estimated Milk Production	Total Value of Production	Jobs Supported	Current Economic Impact
Adair	497,607	$68,720	1	$89,335
Andrew	17,010,058	$2,349,089	27	$2,983,343
Atchison	NA	NA	NA	NA
Audrain (est)	10,832,992	$1,496,036	12	$1,840,124
Barry	64,218,802	$8,868,617	93	$10,997,085
Barton	8,796,734	$1,214,829	11	$1,554,981
Bates	25,102,108	$3,466,601	36	$4,471,915
Benton	15,809,732	$2,183,324	30	$2,794,655
Bollinger	567,665	$78,394	1	$97,993
Boone	4,437,600	$612,833	10	$857,966
Buchanan	9,847,082	$1,359,882	18	$1,835,841
Butler	NA	NA	NA	NA
Caldwell	4,307,582	$594,877	8	$767,391
Callaway	7,292,355	$1,007,074	12	$1,309,197
Camden	7,772,987	$1,073,450	19	$1,438,422
Cape Girardeau	50,250,991	$6,939,662	106	$10,062,510
Carroll	5,603,500	$773,843	7	$990,519
Carter	NA	NA	NA	NA
Cass	10,784,138	$1,489,289	21	$1,980,755
Cedar	10,037,619	$1,386,195	19	$1,815,916
Chariton	1,520,402	$209,968	2	$281,357
Christian	50,301,446	$6,946,630	126	$9,239,017
Clark	NA	NA	NA	NA
Clay	NA	NA	NA	NA
Clinton	3,151,082	$435,164	5	$583,120
Cole	1,848,732	$255,310	4	$337,009
Cooper	7,240,008	$999,845	10	$1,289,800
Crawford	111,651	$15,419	1	$20,045
Dade	12,394,525	$1,711,684	20	$2,242,306
Dallas	81,563,681	$11,263,944	182	$14,305,209
Daviess	6,075,800	$839,068	8	$1,040,444
DeKalb	6,666,634	$920,662	12	$1,224,481
Dent	NA	NA	NA	NA
Douglas	85,782,194	$11,846,521	231	$15,163,547
Dunklin	NA	NA	NA	NA
Franklin	40,721,601	$5,623,653	82	$7,423,222
Gasconade	NA	NA	NA	NA
Gentry	36,835	$5,087	NA	$6,155
Greene	48,479,341	$6,694,997	126	$10,109,445
Grundy	10,637,114	$1,468,985	16	$1,880,301
Harrison	3,809,140	$526,042	6	$715,417
Henry	10,077,260	$1,391,670	14	$1,809,170
Hickory	12,205,334	$1,685,557	19	$2,068,670
Holt (est)	786,891	$108,670	1	$131,291
Howard	2,331,144	$321,931	4	$415,417
Howell	93,255,458	$12,878,579	216	$17,876,987
Iron	NA	NA	NA	NA
Jackson	268,356	$37,060	1	$54,807
Jasper	53,663,131	$7,410,878	105	$10,133,850
Jefferson	20,000,034	$2,762,005	56	$3,700,918
Johnson	12,185,751	$1,682,852	21	$2,159,951
Knox (est)	12,224,828	$1,688,249	15	$2,035,169
Laclede	120,254,355	$16,607,126	267	$22,067,201
Lafayette	21,492,686	$2,968,140	33	$4,054,132
Lawrence	125,254,484	$17,297,644	190	$22,153,975
Lewis (est)	54,613,346	$7,542,103	68	$9,154,167
Lincoln	22,367,141	$3,088,902	35	$3,971,445
Linn	9,558,248	$1,319,994	13	$1,658,802
Livingston	461,432	$63,724	1	$90,063
Macon	NA	NA	NA	NA
Madison	NA	NA	NA	NA
Maries	1,286,006	$177,597	2	$218,861
Marion	7,551,469	$1,042,858	11	$1,355,686
McDonald	23,990,448	$3,313,081	39	$4,041,959
Mercer	374,254	$51,684	1	$64,693
Miller	915,533	$126,435	1	$160,105
Mississippi	NA	NA	NA	NA
Moniteau	5,723,307	$790,389	7	$991,276
Monroe	12,457,500	$1,720,381	15	$2,150,476
Montgomery	2,458,573	$339,529	4	$427,806
Morgan	18,335,428	$2,532,123	26	$3,235,202
New Madrid	NA	NA	NA	NA
Newton	44,640,285	$6,164,823	77	$7,787,701
Nodaway	4,492,509	$620,416	7	$800,994
Oregon	18,710,533	$2,583,925	35	$3,279,403
Osage	5,693,842	$786,320	9	$961,670
Ozark	57,802,213	$7,982,486	134	$10,076,954
Pemiscot	NA	NA	NA	NA
Perry	29,938,895	$4,134,561	52	$5,142,973
Pettis	12,715,801	$1,756,052	18	$2,361,906
Phelps	1,273,680	$175,895	3	$236,664
Pike	1,743,548	$240,784	3	$317,629
Platte	NA	NA	NA	NA
Polk	99,262,258	$13,708,118	173	$18,094,715
Pulaski	1,978,942	$273,292	4	$338,130
Putnam	274,669	$37,932	1	$49,858
Ralls	1,307,866	$180,616	2	$225,209
Randolph	597,352	$82,494	1	$116,290
Ray	2,523,551	$348,502	5	$453,696
Reynolds	NA	NA	NA	NA
Ripley	NA	NA	NA	NA
Saline	397,279	$54,864	1	$70,073
Schuyler	3,863,953	$533,612	7	$668,601
Scotland	45,506,840	$6,284,495	64	$7,853,023
Scott	NA	NA	NA	NA
Shannon	2,870,740	$396,449	7	$481,618
Shelby	2,111,602	$291,612	4	$349,357
St Charles	14,400,742	$1,988,743	23	$2,650,853
St Clair	4,843,062	$668,827	7	$870,080
St Francois	6,944,302	$959,008	22	$1,336,066
St Louis	NA	NA	NA	NA
Ste Genevieve	1,141,575	$157,652	2	$195,488
Stoddard	NA	NA	NA	NA
Stone	41,503,696	$5,731,660	124	$7,179,352
Sullivan	663,680	$91,654	1	$110,522
Taney	5,203,814	$718,647	13	$970,448
Texas	110,147,180	$15,211,326	226	$19,459,453
Vernon	3,265,118	$450,913	4	$577,153
Warren	1,989,473	$274,746	3	$343,059
Washington	NA	NA	NA	NA
Wayne	NA	NA	NA	NA
Webster	151,194,309	$20,879,934	371	$27,561,513
Worth	NA	NA	NA	NA
Wright	267,098,539	$36,886,308	582	$47,033,953
Unassigned	27,478,402	$3,794,767	67	$6,409,002
Statewide	2,203,703,986	$304,331,520	4474.0	$402,294,308

4.5 Changing Milk Markets

The path milk takes from when it leaves the farm gate until the milk is sold to the final consumer has changed dramatically in the past 10 years and continues to change. Consolidation in the food retail business is largely responsible for these changes. Table 11 and Figure 19 show the top five food retailers (Wal-Mart, Kroger, Albertson's, Safeway, and Ahold USA) accounted for 24% of the food retailing market in 1997. These businesses accounted for 40% of retail food sales in 2000.

Table 11. Retail Sales in Major U.S. Food Stores³³

Retailer	Sales ($ Billions)
Wal-Mart	57.2
Kroger	49
Albertson's	36.4
Safeway	32
Ahold USA	27.8

Figure 19. Percent of Retail Food Sales by Major U.S. Food Store

Consolidation of retail food businesses pushes dairy processing and milk manufacturing companies toward consolidation to gain countervailing power with the reduced number of larger customers. Consolidation does not stop at the processor. The same forces drive consolidation back through the marketing channel to the cooperative or private company that purchases milk at farm level.

A recent example of the need for production size was the announced merger of Dean Foods and Suiza Foods. In an April 6, 2001 letter to shareholders announcing their merger intentions, Dean Foods stated, "Success in our industry increasingly depends upon the ability to serve effectively and build relationships with growing regional and national retail customers. As consolidation continues among our national and multi-regional retail customers, with our expanded product portfolio, geographic reach and distribution efficiencies, we certainly will be a much more effective partner with them."

Farmer-owned dairy cooperatives are also merging with other cooperatives. Mid-America Dairymen started the 1990's as a regional cooperative headquartered in Springfield, MO. Mid-Am merged with State Dairy Association of California, Gulf Dairy of Louisiana, and Dairymen, Inc. from Kentucky in 1994. In 1998 Mid-Am merged with the southern region of AMPI, MMI, and Western Dairymen to form Dairy Farmers of America based in Kansas City.

Consolidation trends that favor large-scale milk production has caused many producers to seek alternative outlets for their milk. A recent USDA research paper on dairy cooperatives outlines this counter trend. "Despite the headline-making consolidation taking place during the 1990s, other trends were afoot, such as the creation of new small and medium-sized dairy cooperatives by producers seeking a new marketing avenue for their milk. Some may have formed when dairy farmers became uncomfortable, for various reasons, with their large organizations and sought alternatives to the mega-cooperatives for their marketing needs. Other producers made new efforts to capture marketing margins by focusing on a niche, perceived or real, such as bST-free, organic, or high quality." ³⁴

Consolidation is also being driven at the farm level. Figure 20 shows one of 10 farms in the United States is "large or very large." These large farms; however, control one of every three farmland acres and $2 of every $3 of gross farm income. As the number of decision makers from farm level to retail level declines, production standards will be customized for defined target markets through the entire food chain. These markets will not be very tolerant of the quality variations found in today's milk pool.

Figure 20a. Concentration of U.S. Farms numbers³⁵

Figure 20b. Concentration of U.S. Farms ownership

Figure 20c. Concentration of U.S. Farms value of production

4.5.1 Impacts on Missouri Producers

Efforts are being made to develop identity preserved products in Missouri. At least five dairy farms bottle and sell milk direct to customers or retailers in Missouri. The development of niche markets is important; however, these efforts are not expected to assist many dairymen or sustain needed infrastructure. According to USDA, "Dairy farmers, who supply a highly standardized raw material to processors, will have few opportunities to market differentiated identity-preserved products, except perhaps organic or non-bST [supplemented] milk. The most likely ways for dairy farmers to earn premiums will be in larger volume or in higher percentage of ingredients such as protein or butterfat." ³⁶

Volume production becomes critically important as markets for milk consolidate. The ability to fill tanker trucks with quality milk will be a definite survival strategy for dairymen. Implementation of this strategy may be in larger scale production units or by producers cooperating to produce the needed volume of quality milk to satisfy the target market.

According to the Central Milk Marketing Order Administrator, "There were 95 producers who each marketed more than 1.5 million pounds of milk on the Central Federal Order during July 2001. This volume of milk approximates about a tanker load per day. Some have referred to this type of producer as a milk plant on wheels. With a tanker load of milk each day, this milk is mobile and can be directed to numerous locations as needed. These 95 producers accounted for only 0.82% of the total producers on the Central market. However, they accounted for 17% of the milk pooled on the market."³⁷ Missouri had one producer marketing more than 1.5 million pounds of milk per month into the Central order during July 2001. This producer accounted for 10% of Missouri's contribution of milk into the Central order for that month.

4.5.2 Missouri Milk Flow Analysis

Figure 21 shows milk market order boundaries established by federal milk market reform that took effect January 1, 2000.

Figure 21. Federal Milk Marketing Order Areas, January 1, 2000³⁸

Parts of Missouri are located in the Southeast Milk Marketing Order while many other locations in the state are in the Central Milk Marketing Order. The Southeast Marketing Order has some of the highest Class I, (fluid milk) use in the nation. The Central Marketing Order has some of the lowest Class I use. Figure 22 depicts the relative Class I use and mailbox prices for the marketing options that are available to Missouri dairy producers.

Figure 22. Mailbox Milk Prices and Class I Usage³⁸

Market order boundaries determine where fluid milk processors are regulated, but orders do not determine where milk is sourced, shipped, processed, or consumed. Table 12 shows the division of the milk supply between the three common pooling orders supplied by Missouri producers. Table 13 details the milk pool distribution of milk from each Missouri county for 2000.

Table 12. Missouri Dairy Farmers Milk Flow by Order for 2000³⁹

	Southeast Order	Central Order	Appalachian Order
Pounds of Milk	1,436,544,000	448,670,000	13,708,000
Percent of Total Order Supplied by Missouri	19.19%	2.80%	0.22%
Percent of Missouri's Regulated Handlers Production	75.6%	23.6%	0.7%

Table 13. Missouri Dairy Farmers Milk Flow by Order by County for 2000⁴⁰

	Southeast Order		Central Order		Total Milk Shipped
County	Pounds pooled SE Order	% SE Order	Pounds pooled, Central Order	% Central order	Total Milk Shipped including Appalachian Order
Adair		0%	422,966	100%	422,966
Andrew		0%	14,458,549	100%	14,458,549
Atchison
Audrain		0%	9,208,043	100%	9,208,043
Barry	54,585,982	100%		0%	54,585,982
Barton	7,477,224	100%		0%	7,477,224
Bates	2,560,578	12%	18,776,214	88%	21,336,792
Benton	4,708,872	35%	8,729,400	65%	13,438,272
Bollinger		0%	482,515	100%	482,515
Boone		0%	3,771,960	100%	3,771,960
Buchanan		0%	8,370,020	100%	8,370,020
Butler
Caldwell		0%	3,661,445	100%	3,661,445
Callaway	30,776	0%	6,167,726	100%	6,198,502
Camden	6,607,039	100%		0%	6,607,039
Cape Girardeau	30,044,374	70%	12,668,968	30%	42,713,342
Carroll		0%	4,762,975	100%	4,762,975
Carter
Cass	10,505	0%	9,156,012	100%	9,166,517
Cedar	8,531,976	100%		0%	8,531,976
Chariton		0%	1,292,342	100%	1,292,342
Christian	42,756,229	100%		0%	42,756,229
Clark
Clay
Clinton		0%	2,678,420	100%	2,678,420
Cole	10,469	1%	1,560,953	99%	1,571,422
Cooper	2,157,068	35%	3,996,939	65%	6,154,007
Crawford		0%	94,903	100%	94,903
Dade	10,535,346	100%		0%	10,535,346
Dallas	68,698,187	99%	623,946	1%	69,329,129
Daviess		0%	5,164,430	100%	5,164,430
DeKalb		0%	5,666,639	100%	5,666,639
Dent
Douglas	66,865,431	92%	5,100,467	7%	72,914,865
Dunklin
Franklin		0%	34,613,361	100%	34,613,361
Gasconade
Gentry		0%	31,310	100%	31,310
Greene	39,305,754	95%	1,901,686	5%	41,207,440
Grundy		0%	9,041,547	100%	9,041,547
Harrison		0%	3,237,769	100%	3,237,769
Henry	19,436	0%	8,546,235	100%	8,565,671
Hickory	10,374,534	100%		0%	10,374,534
Holt		0%	668,857	100%	668,857
Howard		0%	1,981,472	100%	1,981,472
Howell	73,697,427	93%	140,747	0%	79,267,139
Iron
Jackson		0%	228,103	100%	228,103
Jasper	45,189,949	99%	423,712	1%	45,613,661
Jefferson	4,588,243	27%	12,411,786	73%	17,000,029
Johnson	2,762,108	27%	7,595,780	73%	10,357,888
Knox		0%	10,391,104	100%	10,391,104
Laclede	95,540,308	93%	6,241,835	6%	102,216,202
Lafayette	14,613,651	80%	3,655,132	20%	18,268,783
Lawrence	106,466,311	100%		0%	106,466,311
Lewis		0%	46,421,344	100%	46,421,344
Lincoln		0%	19,012,070	100%	19,012,070
Linn		0%	8,124,511	100%	8,124,511
Livingston		0%	392,217	100%	392,217
Macon
Madison
Maries		0%	1,093,105	100%	1,093,105
Marion		0%	6,418,749	100%	6,418,749
McDonald	20,391,881	100%		0%	20,391,881
Mercer		0%	318,116	100%	318,116
Miller		0%	778,203	100%	778,203
Mississippi
Moniteau	24,702	1%	4,840,109	99%	4,864,811
Monroe		0%	10,588,875	100%	10,588,875
Montgomery		0%	2,089,787	100%	2,089,787
Morgan	159,761	1%	15,425,353	99%	15,585,114
New Madrid
Newton	37,944,242	100%		0%	37,944,242
Nodaway		0%	3,818,633	100%	3,818,633
Oregon	15,668,673	99%		0%	15,903,953
Osage	22,108	0%	4,817,658	100%	4,839,766
Ozark	44,487,767	91%	3,518,886	7%	49,131,881
Pemiscot
Perry	18,209,208	72%	7,238,853	28%	25,448,061
Pettis	3,689,279	34%	7,119,152	66%	10,808,431
Phelps		0%	10,492	1%	1,082,628
Pike		0%	1,482,016	100%	1,482,016
Platte
Polk	84,372,919	100%		0%	84,372,919
Pulaski		0%	1,682,101	100%	1,682,101
Putnam		0%	233,469	100%	233,469
Ralls		0%	1,111,686	100%	1,111,686
Randolph		0%	507,749	100%	507,749
Ray		0%	2,145,018	100%	2,145,018
Reynolds
Ripley
Saline		0%	337,687	100%	337,687
Schuyler		0%	3,284,360	100%	3,284,360
Scotland		0%	38,680,814	100%	38,680,814
Scott
Shannon	2,440,129	100%		0%	2,440,129
Shelby		0%	1,794,862	100%	1,794,862
St Charles		0%	12,240,631	100%	12,240,631
St Clair	3,557,851	86%	558,752	14%	4,116,603
St Francois	3,008,686	51%	2,893,971	49%	5,902,657
St Louis
St Genevieve		0%	970,339	100%	970,339
Stoddard
Stone	35,278,142	100%		0%	35,278,142
Sullivan		0%	564,128	100%	564,128
Taney	4,423,242	100%		0%	4,423,242
Texas	88,100,542	94%	4,077,827	4%	93,625,103
Vernon	2,775,350	100%		0%	2,775,350
Warren		0%	1,691,052	100%	1,691,052
Washington
Wayne
Webster	126,688,324	99%	1,765,228	1%	128,515,163
Worth
Wright	221,392,229	98%	2,695,702	1%	227,033,758
Unnamed	23,356,642	100%		0%	23,356,642
Total	1,434,129,454	75.6%	448,669,773	23.6%	1,873,148,388

4.6 Environmental and Permit Issues

The state of Missouri has had a "no discharge" animal manure management program for a number of years. The "no discharge" program essentially says that all animal manure and rainfall runoff from dirt or concrete lots is to be collected and stored until the material can be land applied. The "no discharge" program has protected water quality by keeping animal manure out of the waters of the state. However, Missouri has sometimes seen a competitive disadvantage from the "no discharge" program when comparing to states with no animal manure management program. The apparent disadvantage will probably no longer exist in the future because animal manure regulations are being revised and will probably be standardized on a national basis.

The United States Environmental Protection Agency (USEPA) has issued the proposed national rules for concentrated animal feeding operations (CAFOs) to help policy makers and farmers better achieve the shared goal of protecting water quality while maintaining a productive and competitive farming community. The following topics from the proposed rule apply specifically to dairy operations and the impact of the proposed rules on Missouri dairy operations.

4.6.1 Number of Regulated Dairy Animal Feeding Operations

The USEPA is proposing to change the criteria for what constitutes regulation of an animal feeding operation (AFO). Currently, a threshold of 1,000 animal units (AU) defines a regulated AFO. Two new thresholds are being proposed by the USEPA: 500 AU and 300 AU. These proposed thresholds would increase the number of regulated dairy AFOs in Missouri from five regulated operations under the 1,000 AU threshold to 28 and 50 regulated dairies under the 500 AU and 300 AU thresholds, respectively.

4.6.2 Zero Discharge from Production Area

Currently, there is no requirement in the proposed regulations for dairies to achieve zero discharge from the production area (as is being proposed for swine, poultry, and veal operations). The proposed rule is expected to define the "chronic storm event" in relation to a storm discharge exemption provision in the operation of a dairy manure handling system.

4.6.3 Phosphorus Limits

Application of manure on a phosphorus basis rather than a nitrogen basis is highly probable in the final CAFO rule. Although the management of phosphorus in land-applied manure is an acceptable practice for protection of water quality, the USEPA's chosen implementation of this "phosphorus rule" will result in unfeasible limits for many operations. In some cases, dairy operations will need 10 times more land for manure application than they currently have and many operations will require double their current land needs. A new NRCS standard being developed (and proposed in comments to the USEPA) would allow application of manure based on nitrogen requirements of crops, but would limit further application of manure to the land until the applied phosphorus had been used. This proposed alternative to the USEPA's "phosphorus rule" would allow use of current manure application equipment by farmers while still achieving the water quality goals desired by USEPA.

4.6.4 Comprehensive Nutrient Management Plans

A Comprehensive Nutrient Management Plan (CNMP) is a subset of a conservation plan and is unique to an AFO. The CNMP combines conservation practices and management activities that can be implemented in a system to help ensure that production goals and natural resource concerns regarding water quality are achieved.

The objective of the CNMP is to provide AFO owners and operators with a plan to manage manure and organic by-products both for voluntary programs and as a means to help satisfy the USEPA's National Pollutant Discharge Elimination System permit requirements. The CNMP addresses natural resource concerns dealing with soil erosion, manure, and organic by-products and their potential impact on water quality.

Six elements require consideration when developing CNMPs: manure and wastewater handling and storage, land treatment practices, nutrient management, record keeping, feed management, and other use activities. All six elements are not necessarily required for a CNMP to be complete.

Individuals certified by an approved certifying private organization or public agency as being qualified to provide specific types of conservation assistance associated with AFOs can develop CNMPs. Competency in manure and wastewater handling and storage, land treatment practices, nutrient management, and other management areas is required.

²¹ USDA, NASS, Milk Production, Disposition & Income - Supplement.

²² USDA, NASS, Agricultural Statistics.

²³ USDA, NASS, Agricultural Statistics.

²⁴ Missouri Agricultural Statistics Service, Missouri Farm Facts.

²⁵ USDA, NASS, Agricultural Statistics, 2001.

²⁶ USDA, NASS, Agricultural Statistics, 2001.

²⁷ National Agricultural Statistics Service, Sp, Sy 3 (99), April 1999.

²⁸ 2001 Missouri Farm Land Values Opinion Survey, University of Missouri, Farm Management Newsletter, FM 2001-1, Sept. 26, 2001.

²⁹ USDA, ERS, Agricultural Real Estate Tax Survey data.

³⁰ 1993 Data.

³¹ Missouri State Milk Board.

³² Economic Impacts estimated by author, Vern Pierce, Ph.D.

³³ November 2001, Top Producer Magazine.

³⁴ Structural Change in the Dairy Cooperative Sector, 1992-2000, USDA, Rural Business Cooperative Service, Report 187.

³⁵ 1997 data

³⁶ The Structure of Dairy Markets: Past, Present, Future. By Alden C. Manchester and Don P. Blayney. Commercial Agriculture Division, Economic Research Service, USDA, Agricultural Economic Report 757.

³⁷ Sept, 2001 Marketing Service Bulletin.

³⁸ USDA, Agricultural Marketing Service Dairy Programs.

³⁹ Federal Milk Marketing Administrator, Upper Midwest Orders - Mailbox Milk Prices

⁴⁰ SE Federal Milk Market Administrator, "Producer Milk Marketed Under Federal Orders by State of Origin" Describes only milk marketed by regulated handlers. This describes 85% of Missouri’s Milk in 2000.

⁴¹ Federal Milk Market Administrators for Southeast Order, Central Order, and Appalachian Order, NOTE: Includes only Grade A milk marketed by regulated handlers, 85% of Missouri’s milk in 2000.