Doctoral Dissertations
Date of Award
8-2025
Degree Type
Dissertation
Degree Name
Doctor of Philosophy
Major
Animal Science
Major Professor
Elizabeth A. Eckelkamp
Committee Members
Alicia L. Rihn, Blair C. Downey, Brynn H. Voy, Emily A. Paskewitz
Abstract
Southeast U.S. farmstead dairy operations (FSD), which produce and process raw milk into salable dairy products, must understand their potential market and profitability to be successful. Literature suggests that FSD offer opportunities to capture more of the consumer dollar and strengthen rural economies, but also face barriers related to market access, production decisions, investment costs, and consumer awareness. Few studies have quantified specific FSD product demand or evaluated profitability across diverse processing strategies, particularly in the Southeast, a region with growing interest in FSD. To address these gaps, multiple studies were conducted to evaluate consumer willingness to pay (WTP) for Southeast FSD milk (FSM; 1A), cheddar cheese (FSC; 1B), and ice cream (FSIC; 1C), as well as the key drivers of FSD profitability (2). Studies 1A, B, and C were three discrete choice experiments embedded in a Qualtrics survey. Each experiment included 14 choice sets developed with fractional factorial design in JMP Pro 17. Respondents (n = 1,821) were Tennessee, North Carolina, or Kentucky residents, ≥ 18 yr old, and dairy-product-consuming household food shoppers. Mixed logits and non-linear combinations were estimated in Stata 18. Farmstead and state-local logos commanded high WTP. Specialty production labels yielded high WTP, while farm-direct purchases and plastic alternatives did not. No single state had the highest WTP across all products. To evaluate FSD profitability, three stochastic simulations were conducted in Microsoft Excel using @Risk, modeling cheddar only (S1), cheddar and mozzarella (S2), and specialty cheeses (alpine, brie, and blue; S3). Each ran 10,000 iterations using Latin Hypercube sampling. While investment cost rose with product diversity, net present value (NPV), payback period (PP), and internal rate of return (IRR) improved. Profitability was most sensitive to herd size, percent of raw milk processed, and product price. This dissertation is among the first to integrate region-specific consumer choice modeling with profitability simulations for FSD, offering a novel perspective on Southeast consumers' valuation of FSD attributes and the financial impact of operational decisions. Findings contribute to the growing literature of FSD viability and support data-driven investment and product strategies for Southeast FSD producers.
Recommended Citation
Zaring, Caitlin Samantha, "Analyzing the Economic Viability of Farmstead Dairy Operations Using Consumer Preferences, Willingness to Pay, and Decision Support Tools. " PhD diss., University of Tennessee, 2025.
https://trace.tennessee.edu/utk_graddiss/12791
Included in
Agricultural and Resource Economics Commons, Dairy Science Commons, Food Processing Commons