Feasibility of On-farm Milk Processing, Packaging, and Marketing for Tennessee Dairy Farmers

The Tennessee dairy industry has experienced a milk price and feed cost squeeze over the past several years, resulting in declining dairy farm numbers. Many dairy farmers are looking for ways to capture more of the food dollar. One alternative is employing a value-added enterprise. With added managerial and financial responsibilities, it is important that a market and financial feasibility be examined prior to entering into such an undertaking. This study focused on the feasibility of on-farm processed milk, cheese, and yogurt. The feasibility analysis consisted of two major components: market potential and financial feasibility. Market potential was examined for five major metropolitan areas (Memphis, Nashville, Knoxville, Chattanooga, and the Tri-Cities). The financial feasibility for these value-added activities was projected for a representative dairy farm for the state of Tennessee.