Structural changes in the dairy industry in Tennessee

The objective of this study was to describe the structure of the producer, processor, and to a lesser degree, the consumer sectors of the Tennessee dairy industry. Information concerning the structure of the sectors would be of benefit to the dairy industry as well as policymakers. Various historical trends on selected variables were evaluated, described, and summarized for the different sectors. Secondary data were used for the most part, originating primarily from census and industry sources, milk marketing administrators, and previously published research. The dairy production sector in Tennessee was characterized by the following: a reduction in total number of dairy farms in the last 15 to 20 years, relatively stable total milk production, a decline in total cow numbers during the same period with increased milk production per cow, a steady increase in total cash receipts from farm marketing of milk and cream, and an increased proportion of total milk sales originating from commercial dairy farms. Other characteristics included an increase in average herd size and a trend toward fewer but larger farms with greater average gross sales per farm and greater acreage per farm. The dairy farm tenure patterns indicated a slight trend to increased ownership status by dairy farm operators where full or part ownership included 92 percent of all dairy farm operators in 1969. The processing sector was characterized by a general decline in the number of fluid milk processing plants and in manufacturing milk plants. However, total plant capacity and output from 1954 to 1975 increased during this period with corresponding increases in labor productivity and value added per man-hour. The demand sector was described by indicating the number and location of milk marketing orders in the state, the utilization of producer milk in the state and the regional milk markets in the United States. The estimated demands for fluid milk and frozen dessert for 1980 were presented. Demand was expected to grow, indicating the possibility of a need for expansion of the Tennessee dairy industry.