Economic and Marketing Information
FOR INDIANA   FARMERS
Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana
Indiana Dairying-1970
by Hugh  L. Moore. Agricultural Economics
March   31,   1962
Growth and change are the by-words for the 60's for
dairy farmers. Following the postwar trend, the decade
ahead will see new production skills developed and old
ones more widely adopted. Dairy farms on the average
will become larger. Production per cow will continue to
increase. As a result, fewer farmers will supply Indiana
and the nation's milk needs.
On the demand side, by 1970 our national population
will be nearly 214 million people, up 16 percent from
1961. Balanced against this is a history of falling per
capita consumption. Also, foreign trade looms as a big
unknown. A close look at these changes to come will
help Indiana farmers make long-range dairy plans.
Demand for Milk—1970
Modern transportation and storage facilities place the
demand for milk on a national basis. Indiana milk must
compete for outlets even at home. The 1961 average
consumption of dairy products by Americans is given
in Table  1.
The combined consumption of our 185 million people
was about 119 billion pounds of whole milk equivalent.
or approximately 642 pounds per person. Production
for the year equaled 125 billion pounds of milk. The
difference between what was produced and consumed—
six billion pounds—was either kept on farms for livestock feed, exported or placed in Government storage.
What changes in the decade ahead might alter this demand for farm milk?
The biggest factor to affect milk demand in 1970 will
he population changes. The Census Bureau estimates that
our 1970 population will approximate 214 million, an
increase of about 16 percent over 1961. If per capita
consumption remains unchanged, our milk needs in 1970
will be about 140 billion pounds. This figure, however,
appears high. In spite of expected higher consumer incomes to stimulate demand, per person consumption will
Table   1.   Average   per   capita   dairy   products   consumption, U. S. ,1961
Per capita
Product consumption
Fluid milk and cream
Butter
Cheese
Frozen desserts
Evaporated and condensed milk
pounds
314.0
7.5
8.7
18.4
13.3
probably decline as it has nearly every year since World
War II. Contributing to this decline have been the substitution of vegetable fats, shifts in preferences away
from high fat foods, fears associated with fallout and
heart disease and higher dairy product prices.
Foreign trade is one possible place to expand demand.
However, dairy products have not been heavily active in
foreign trade since World War II. Imports have not
exceeded three-fourths of 1 percent of production during the past 15 years, and commercial dairy exports in
recent years have been only about 1 percent of the total
milk supply. There is little reason to expect commercial
dairy exports to change materially in the decade ahead.
Another outlet for milk is feed for calves. The expected
decline in cow and calf numbers will probably reduce
milk needs here.
A big question in the demand picture for milk is the
form that Government programs may take and how they
might affect milk prices and foreign trade. The proposed
marketing quota program might be adopted. If it becomes
law, marketing restrictions and continued high support
prices could be expected. The other extreme would be
no Government dairy program. Since there is little basis
for a prediction, the best approximation is that any Government program in 1970 will affect the demand for
milk about the same as the present one.
By combining these assumptions that affect demand,
our nation's milk needs in 1970 will probably equal about
130 billion pounds. This figure plus or minus 5 percent
should be a safe approximation of our milk production
needs. Therefore, a production increase nationally of
about 5 billion pounds in the next 8 years will be required.
Farm Milk Production
Assuming it will take 130 billion pounds of milk to
meet our 1970 needs, average milk production per cow
will be important in determining the number of cows
and dairy farms needed to produce this milk.
In the last 10 years milk production per cow increased
35 percent nationally to 7,200 pounds. Indiana cows
increased  production  to   nearly  7,500  pounds.
Not only has production per cow been going up, but
most dairy scientists doubt that a production ceiling will
soon be reached. As an illustration, Indiana's DHIA
herds averaged 10,285 pounds of milk per cow in 1960-
61. Even better cows and herds are expected in the
decade ahead. Improved sires through wider use of
artificial breeding will accelerate genetic improvement.
The   influence   of   improved   feeding   and   management