Structural Change in the U.S. Dairy Industry: Growth in Scale, Regional Shifts in Milk Production and Processing, and Internationalism

William D. Dobson and Paul Christ
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William D. Dobson: U of Wisconsin
Paul Christ: Land O'Lakes, Inc

Staff Paper Series from University of Wisconsin, Agricultural and Applied Economics

Abstract: Structural changes in the U.S. dairy industry from the early 1980s to the late 1990s included familiar increases in concentration, industry adjustments to serve large supermarkets, the emergence of two national fluid milk firms (Suiza Foods and Dean Foods), and the emergence of two national dairy cooperatives (Dairy Farmers of America and Land O'Lakes, Inc.). Shifts in the location of milk production in the U.S. to the Western states have caused new dairy product manufacturing plants to locate in those states. This development promises to intensify battles over market share in the expanding U.S. cheese market between Western firms and Upper Midwestern firms. Foreign direct investment in the U.S. dairy industry--especially by European Union firms and a large Canadian firm--increased during the 1980s and 1990s. Facing challenges to expand dairy exports or shrink, the U.S. dairy industry probably will gravitate toward the latter unless government price support and trade policies change to increase price incentives for U.S. firms to export dairy products.

Date: 2000-12
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