xt7ncj87jq66 https://exploreuk.uky.edu/dips/xt7ncj87jq66/data/mets.xml   Kentucky Agricultural Experiment Station. 1971 journals 198 English Lexington : Agricultural Experiment Station, University of Kentucky Contact the Special Collections Research Center for information regarding rights and use of this collection. Kentucky Agricultural Experiment Station Progress report (Kentucky Agricultural Experiment Station) n.198 text Progress report (Kentucky Agricultural Experiment Station) n.198 1971 2014 true xt7ncj87jq66 section xt7ncj87jq66 
 CONTENTS
Page
- Introduction ......................... 3
Purpose ........................... 3
Part I: The Changing Dairy Situation ................ 3
1. Fewer Farms Keep Dairy Cows ................. 5
2. Trends Show Fewer Milk Cows, Larger Herds and Increased Productivity . . . 5
3. Growth Rates Change Supply-Demand Relationships ......... 6
4. Per Capita Consumption ................... 7
5. Consumer Preference Change ................. 8
6. Govemment Price Support Objectives .............. 8
Part II: '1`he Adjustment Problems .......... i" ....... 9 l
1. Regional Comparisons ................... 11 V
2. Regional Changes in Dairy Manufacturing ,,,__________ 11
3. The Adjustment Problem ................... 16
Part III: Kentucky ’s Stake in Dajrying ................ 16 Y
1. Dairying: A Multi-Million Dollar Industry ............. 16
2. Importance of Dairy Farming in Kentucky ............. 17
3. Changes in Dairy Farming .................. 18 4
4. Production per Cow Improving ................ 19 -
5. Changing Market Structures .................. 20
6. The Nature of Kentucky Markets ................ 20
7. The Future Growth .................... 21
Part IV: Marketing and Processing ................. 21
l. Population and Market Potentials ................ 22 _
2. Major Production Areas Related to Cow Numbers .......... 22
3. Manufacturing Plants Are Near Production in Kentucky ,,_,___, 25
4. Fluid Milk Marketing in Kentucky ................ 25
5. Fluid Milk Processors Become Fewer, Larger ____________ 25
6. Changing Market Outlets and Services _,_,,_,__,__,, 28 ‘
7. Fluid Milk Supply Areas ................... 29
8. Bottled Milk Distribution Is No Longer Local ____________ 29
9. Technology and Spreading Market Areas _____________ 32
10. Changing Role of Cooperatives _________________ 33
11. Cooperatives Grow in Size .................. 33
‘ Part V: Evaluations and Implications ................ 34
1. A Resume, ....................... 35
2. Economics of Marketing ,,,,___________ _ _ _ _ 36
3. Changing Market Concepts ............. . .... 38
4. Federal Order Orientation ,,,,,_,____ _ ______ 38
5. Market Conflicts ..................... 39
6. Price Alignments ..................... 40
7. Economic Pressures .................... 40
8. The Displacement Problem ,,,_______________ 41
9. Producer-Oriented Problems and Issues ______________ 41
Part VI: Blueprint for Progress __________________ 42
Appendix .......................... 45
2

 Kentucky Doiry Industry
Facts and Economic Issues‘
BY]OHN B. ROBERTS
INTRODUCTION
The dairy enterprise has consistently been among the top three sources of income to
Kentucky agriculture for more than three decades. But the number of farms producing milk in
1970 was less than one-seventh the number in 1940. Those who stayed in dairying have done so
` by offsetting increasing production costs with increased size and efficiency in their operations.
` Many who remain as milk producers today are confronted by the prospects of meeting still higher
quality standards and the need for new investments. More than ever before, Kentucky milk
producers are competing for available markets with neighboring states and with regions beyond.
In the future economic and technological changes will focus increasingly on efficiencies in
,» production and marketing. From a business and farm investment point of view, the production,
processing and distribution of milk and dairy products are major considerations in the present
and future economy of the state. A vigorous, efficient and progressive dairy industry that can
_ 4 compete successfully for markets within the state and for those outside is essential in maintaining
and expanding the Kentucky dairy enterprise. K
PURPOSE
Purpose of this report is to: (1) provide a quick reference to information on the dairy
` situation in the U.S.; (2) review production and marketing trends in Kentucky; (3) show
inter-area and inter-regional relationships as applied to marketing pattems; (4) comment briefly
on the data to help the reader note important facts, and (5) consider the possible impact of the
. changes and point out how the dairy industry can meet the more critical problems of the future.
PART I
THE CHANGING DAIRY SITUATION
Technological advances in production, processing and distribution, which began during
World War II, have been sharply accelerated in the years that followed. Looking back 25 years at
only a few of many items is sufficient to dramatize the nature of change. Between 1945 and
1970, the population of the U.S. increased by over 65 million or 47 percent, while milk
production declined 3 percent in the same period. On the average, per capita milk consumption
declined by 29 percent.
1Much of the statistical material found in this report was taken from the latest available official publications of
the U.S. Department of Agriculture and other governmental agencies. Special acknowledgement is due the
Kentucky Crop and Livestock Reporting Service, 434 Federal Building, Louisville. This agency, sponsored
jointly by the USDA and the Kentucky Department of Agriculture, provides current and annual estimates by
which part of the data in this report can be kept current. (This report updates “Kentucky Dairy Industry Facts,"
Progress Report 156, published in 1965.)
3

 CONTENTS
Page
. Introduction ......................... 3
Purpose ........................... 3
Part I: The Changing Dairy Situation ................ 3
1. Fewer Farms Keep Dairy Cows ................. 5
2. Trends Show Fewer Milk Cows, Larger Herds and Increased Productivity . . . 5
3. Growth Rates Change Supply-Demand Relationships ......... 6
4. Per Capita Consumption ................... 7
5. Consumer Preference Change ................. 8
6. Govemment Price Support Objectives .............. 8
Part II: '1`he Adjustment Problems .......... i" ....... 9 l
1. Regional Comparisons ................... 1 1 ·
2. Regional Changes in Dairy Manufacturing ,,,__________ 1 1
3. The Adjustment Problem ................... 16
Part III: Kentucky’s Stake in Dairying ................ 16 Y
1. Dairying: A Multi-Million Dollar Industry ............. 16
2. Importance of Dairy Farming in Kentucky ............. 17
3. Changes in Dairy Farming ....... Q .......... 18
4. Production per Cow Improving ,.,,,,,,,_____ _ _ 19 —
5. Changing Market Structures .................. 20
6. The Nature of Kentucky Markets ................ 20
7. The Future Growth .................... 21
Part IV: Marketing and Processing ................. 21
1. Population and Market Potentials ................ 22 _
2. Major Production Areas Related to Cow Numbers .......... 22
3. Manufacturing Plants Are Near Production in Kentucky ,,,_____ 25
4. Fluid Milk Marketing in Kentucky .............. . . 25
5. Fluid Milk Processors Become Fewer, Larger ____________ 25
6. Changing Market Outlets and Services .............. 28
7. Fluid Milk Supply Areas ............... . . . . 29
8. Bottled Milk Distribution ls No Longer Local ____________ 29
9. Technology and Spreading Market Areas _____________ 32
10. Changing Role of Cooperatives _________________ 33
11. Cooperatives Grow in Size ,,,_,_____________ 33
‘ Part V: Evaluations and Implications ................ 34
1. A Resume, ....................... 35
2. Economics of Marketing ................... 36
3. Changing Market Concepts .................. 38
4. Federal Order Orientation .................. 38
5. Market Conflicts ..................... 39
6. Price Alignments ..................... 40
7. Economic Pressures .................... 40
8. The Displacement Problem .................. 41
9. Producer-Oriented Problems and Issues .............. 41
Part VI: Blueprint for Progress __________________ 42
Appendix .......................... 45
2

 Kentucky Doiry lndustry
Facts and Economic Issues‘
BY]OHNB. ROBERTS
INTRODUCTION
The dairy enterprise has consistently been among the top three sources of income to
Kentucky agriculture for more than three decades. But the number of farms producing milk in
1970 was less than one-seventh the number in 1940. Those who stayed in dairying have done so
by offsetting increasing production costs with increased size and efficiency in their operations.
Many who remain as milk producers today are confronted by the prospects of meeting still higher
quality standards and the need for new investments. More than ever before, Kentucky milk
producers are competing for available markets with neighboring states and with regions beyond.
In the future economic and technological changes will focus increasingly on efficiencies in
production and marketing. From a business and farm investment point of view, the production,
processing and distribution of milk and dairy products are major considerations in the present
and future economy of the state. A vigorous, efficient and progressive dairy industry that can
4 compete successfully for markets within the state and for those outside is essential in maintaining
and expanding the Kentucky dairy enterprise. A
PURPOSE
Purpose of this report is to: (1) provide a quick reference to information on the dairy
situation in the U.S.; (2) review production and marketing trends in Kentucky; (3) show
inter-area and inter-regional relationships as applied to marketing pattems; (4) comment briefly
on the data to help the reader note important facts, and (5) consider the possible impact of the
. changes and point out how the dairy industry can meet the more critical problems of the future.
PART I
THE CHANGING DAIRY SITUATION
Technological advances in production, processing and distribution, which began during
World War II, have been sharply accelerated in the years that followed. Looking back 25 years at
only a few of many items is sufficient to dramatize the nature of change. Between 1945 and
1970, the population of the U.S. increased by over 65 million or 47 percent, while milk I
production declined 3 percent in the same period. On the average, per capita milk consumption
declined by 29 percent.
1Much of the statistical material found in this report was taken from the latest available official publications of
the U.S. Department of Agriculture and other governmental agencies. Special acknowledgement is due the
Kentucky Crop and Livestock Reporting Service, 434 Federal Building, Louisville. This agency, sponsored
jointly by the USDA and the Kentucky Department of Agriculture, provides current and annual estimates by
which part of the data in this report can be kept current. (This report updates “Kentucky Dairy Industry Facts,"
Progress Report 156, published in 1965.)
3

 Table 1.~-Changes in Selected Market Factors Affecting the Dairy Industry
1945 and 1970 Comparisons, U.S.a'/
 
 
Item Units of 1945 1970 1970/1945
Measure Change
 
1. Population numbers (000) 139,583 205,400 +47%
2. Milk production (000 lb.) 119,828 116,800 - 3%
3. Per capita consumption Civilian use, lb 786 557 -29%
4. Milk cows on farms Av. No. (000) 25,035 12,470 —50%
5. Milk production per cow Lb. produced 4,786 9,370 +96%
6. Milk used on farms (000 lb.) 20,530 4,100 -80%
7. Sales of whole milk [000 lb.) 68,929 112,700 +64%
8. Whole milk share % of marketings 58 95 +64%
 
E/Sources: USDA Dairy Situation, D.S. 333, Nov. 1970; USDA Agr.
Statistics, 1956, 1967, 1969.
Also, the number of milk cows declined by 50 percent, but the production per cow T
increased 96 percent and the volume of milk used on farms where it was produced declined by 80 I
percent (Table 1, items 4, 5, 6). The amount of milk sold as whole milk increased, however, from
68.9 to 112.7 billion pounds, and the percentage marketed as whole milk increased from 58 to
95 percent of the total markets. These are startling changes, but equally important are some of ‘
the economic changes that occurred in the same period. l
Between 1945 and 1970 the average farm price of milk for all uses rose from $3.19 to
$5.65 per hundred pounds, an increase of 77 percent. The index of "Cost price for items used by _
farms in production" increased 84 percent, and the importance of dairying to total farm incomes
declined slightly (Table 2, items 1, 2, 3).
The index of retail prices for dairy products based on the 1957-59 average was 67 in 1945
and 130 in 1970. If one uses the same base period, the index of prices for all foods was 68 in
1945 and 132 in 1970. The percentage change for each was 94 percent (Table 2, items 4, 5). The
estimated cash income from milk production resulting from a combination of higher prices and
increased volume of sales more than doubled in the 25-year period. The per capita disposable
income increased 254% (Table 2, items 6, 7). Thus, historically, and especially since World War
II, the dairy industry in the United States has been confronted by: (1) changes in demand for its
products; (2) dramatic advances in production efficiency, and (3) a revolution in processing and
Table 2.-—-Selected Price and Income Items Associated with Dairy Income and Values,
1945 and 1970 Comparisons, U.S.a/
 
· _ Units of 1970/1945
It°m Measure 1945 1970 Change
 
1. Farm price wholesale Av per cwt $3.19 $5.65 +77%
2. Cost farm production Index: 1957-59=lO0 73.0 134.0 +84%
3. Milk sales, importance % farm income 13.9 13.2 - 5%
4. Retail price dairy
product Index: 1957-59=lO0 67.0 130.0 +94%
5. Retail price all food Index: 1957-59=100 68.0 132.0 +94%
6. Cash income from
dairying Total sales $3,021 $6,400 +112%
7. Income per capita $1,074 $3,358 +312%
 
2/Sources: USDA Dairy Situation, 0.5. 333, Nov. 1970; USDA Agr.
Statistics, 1956, 1967, 1971.
4
.   ,.;.  gg;) p ( (

 distribution methods. The adjustments made by individual milk producers have been many and
varied. Many have gone out of the dairy business, others have responded by becoming larger and
more efficient, and for all the methods of production and marketing have been changed.
1. r1~;w1zR FARMS KEEP DAIRY cows
In the United States the number of farms keeping milk cows has declined by 75 percent
in 30 years’ time. In 1940 the number of farms reporting milk cows was 4,966,000, compared
with an estimate of 710,000 in 1969. For the nation, the rate at which farmers quit keeping cows
differed by regions. Generally, milk production declined fastest where it was a sideline enterprise.
Shifts away from dairying have been noticeable in the Corn Belt, the Great Plains and in some of
the Lake States. In other regions trends have varied, with the local market prices and off-farm
employment opportunities strongly influencing the direction of change.
2. TRENDS snow i¤1;wER Mu.R cows, LARGER HERDS AND INCREASED PRODUCTIVITY
The number of milk cows kept on farms in the United States reached a peak in 1945 and
in Kentucky in 1954. But in 1970 there were only about half as many on farms as in the peak ·
years (Fig. 1).
Total milk production, however, increased steadily until 1963 for Kentucky and 1964
_ for the United States. Since those dates, the trend in production has been downward (Fig. 2).
The expanded milk production resulted from a trend toward fewer and larger dairy herds ‘
and a remarkable increase in production per cow. In the United States the average number of
milk cows kept per farm increased from 5.8 to 16.5 between 1950 and 1969. The number of
farms keeping 30 cows or more was less than 2 percent in 1950 but was 24 percent in 1969. The
trend toward fewer and larger herds is shown by size groups in Table 3.
,,,,0, MILK cow NUMBERS      
°/¤ OF |935—39 AVERAGE EE) :5; Em
. .;·a . ‘· ,·‘ si; zii  
M »!!!»**t r ~   " ` ~~   lil xii for
**0 · ““*`“”"`“""‘ ‘ r :1:;;    
 * MN-     II A ¤¤ it
,00  ‘ ¤*’ isa? 2:2 §:¥:;€
Y' im an zeznnn
_ I   ~`_ ....t.    
ng \ EEE   SEEESS
so — · :1:::   2;;:;
* ::1: xx;  
80 u _ ......   ..,. ..
"IIIIIHI =**= ras
x   sz 3:;:;:
` `\ iii    
79 · ;::;   2;:::
‘     .r.'...
IIIIIIIlW· ter
WIIIIII `T iwi
50 A      
I925 |93O I935 I94O |945 I95O I955 I96O I965 |97O gy; gg {gig;
Fig. 1.-Trends in milk cow numbers in Kentucky and the United States. (The indcx measures each year’s
milk cow number as a percentage of the average number for the 1935-39 period.)
5

 mnzx MILK PRODUCTION ~;;;;,;;g¤;g*_¤_y_g>~
·/. or l935-39 Avzmxca     EA
*40   ,.     .Z§‘;Z°
*30 · ` sz {iii?  
r ' · zz: 5::: ::;%.*:2.
IIII   III zz zz zz
7bdI        
 IIPHIIIII      
9 O V A   ifig  
 F WIIIIIII      
zo   :; $2;: ::5: z
I925 l93O I955 I940 I945 l950 I955 I96O I965 |9?O   iii.? {55**;
Fig. 2.—Milk production shows an upward trend since 1925. (The index measures each year’s production as
a percentage of average production for the 1935-39 period.)
Kentucky dairy farms, too, are becoming fewer and larger, yet new records in
productivity are being set year by year. Production per cow in Kentucky has increased from an
average of 3,500 pounds in 1940 to 7,137 pounds in 1970. This is a remarkable change. But for _
_ the United States the average was 4,600 pounds in 1940 and 9,338 pounds in 1970. The rate of
change was almost identical for the 30-year period, but Kentucky production is low as compared
with national averages and much lower than in many of the more important dairy states. In the
adjoining states of Ohio and Indiana, production per cow exceeded 9,700, the New England
states 10,000, and Arizona, California, and Washington 1 1,000 pounds annually in 1970. Clearly,
higher production per cow in Kentucky is a practical goal. I
3. GROWTH RATES CHANGE SUPPLY-DEMAND RELATIONSHIPS
Milk production in the United States, which increased at varying rates, was faster than
population growth in the 1920’s, increased at about the same rate in the 1930’s, and since that
time has slowed down to less than half of the rate of population growth.
Table 3.--Distribution of Farms Keeping Milk Cows by Herd Size, u.s.°/
 
 
1950 1969
Slze Group No.(000) Percent N0.(O00) Percent
 
l-9 Milk Cows 2,989 82 363 51
10-19 Milk Cows 477 13 89 13
20-29 Milk Cows 119 3 86 12
30-49 Milk Cows 47 1 109 15
50-over Milk Cows 16 __ 63 _Q_
Total: 3,648 100 710 100
3/Dairy Situation, Sept. 1969, Table 17.
6
 
  ··_· .

 Summary of Changing Relationships in the United States
1920-30 milk production increased at twice the rate of population.
1930-40 milk production increased at the same rate as population.
1940-1950 milk production increased at one-half the rate of population. ·~
1950-1970 milk production increased at less than one-half the rate of population.
Differences in the rates of growth between population and milk production are reflected
in per capita supplies. Furthermore, every year since 1945 less and less milk was used on farms;
smaller amounts were delivered at retail by farmers; less and less was separated and sold as
farm-separated cream, and more and more of the total supply was sold as whole milk to plants
and dealers. The declining farm demand results from fewer people on farms, many fewer milk
cows having calves to feed and changes in methods in dairy management. The decline in farm
retailing and the shift from farm—separated cream to whole milk have put more of the milk, and
especially, the non-fat solids on the commercial markets to be sold or manufactured. Table 4
» shows these changes.
Table 4.»-Milk Marketing by Farmers and Cash Receipts in the United States
Selected Years 1945-1970a/
Home Use Retailed By Sold Wholesale Tot 1 I O
Y On Farms Farmers As a nc me
ear Wh . _ As Farm- As Volume Cash
ere Milk and d wh 1 d
_ Produced Cream separate o e Sol Received
Cream Milk
 
—--—-—---—-—------ (billion pounds) -—--------—------- -(mil dols)-
1945 21.1 5.5 23.9 68.9 98.3 4.0
1950 18.3 3.9 20.2 74.2 98.3 3.7
1955 14.6 2.7 14.7 91.0 108.3 4.2
1960 9.2 2.1 7.9 103.9 114.0 4.8
1965 6.1 1.8 3.6 112.7 118.2 5.0
1970 4.1 1.7 1.3 109.7 112.7 6.2
2/Source: USDA Dairy Situation, D.S. 333, Nov. 1970, Table 5; USDA
· Farm Production Disposition and Income, l940~49, Revised Estimates, April 1952.
ln 1945 about 21 billion pounds of milk was used on the farm where produced, 5.5
billion was retailed by the farmer, 23.9 billion was marketed as farm-separated cream, and 68.9
billion was sold as whole milk to plants and dealers. By contrast in 1970, the farmers used only
about 4 billion, retailed less than 2 billion, and sold only 1.3 billion pounds as farm-separated
cream. They marketed 109.7 billion (about 95 percent of production) as whole milk in
commerical channels. By selling both the skim and fat portions at higher prices and by increasing
the total volume of marketings, dairymen increased their cash receipts. But sales have not kept
abreast with growing population.
4. PER CAPITA CONSUMPTION
Between 1945 aiid 1970 the total population of the United States grew from 140 to 205
— million persons, an increase of 65 million or 47 percent. During the same period milk marketing
increased from 98.3 to 113 billion pounds, an increase of 15 percent. Estimates of the per capita
. consumption on a milk equivalent in all fluid and dairy product uses show 786 pounds in 1945
and 550 pounds in 1970. The decline in pounds per person was 236, or 30 percent, since the end
of World War Il.
7

 5. CONSUMER PREFERENCES CHANGE
Consumers have many choices among foods, including those that compete generally for
the food budget and those that compete specifically with dairy items. Besides a growing number
of substitutes that compete with dairy items, fewer meals are eaten in the home and more are
being eaten out. These and many other factors influence milk sales in general. Let’s look at the
changing use patterns.
Per capita consumption of whole milk, cream and some dairy products is declining,
despite the fact that prices remain low as compared with the rising incomes and purchasing power
among consumers. The largest declines occurred in fluid whole milk, evaporated whole and skim
milk, and in butter. Increases have occurred in low fat fluid milk, cheese products, dried milk and
frozen products-including ice cream, ice milk, sherbets, frozen desserts and specialties. The .
trends are shown in Table 5. `
Yet, the fact remains that the milk requirements for items that have increased in
consumption were not enough to offset those declining. Furthermore, the supply of milk
produced consistently ran ahead of civilian purchases. .
During World War II, to meet war-time needs, milk producers were encouraged to expand P
production and to shift from selling farm-separated cream to the delivery of whole milk. The
trend was accelerated, yet in the post-war years and the decades that followed there were sharp
declines in the demand for milk. Butter and evaporated milk were especially depressed, and
producers generally were dissatisfied with the dairy markets situation. Problems compounded. To i 5
clear the market, government purchases at support levels have taken products when they
exceeded other demands at the specified prices. The problem of disposing of the acquired
products without disrupting commercial channels has been a factor in national policy. The ·
problem has not yet been solved.
6. GOVERNMENT PRICE SUPPORT OBJECTIVES
The agricultural marketing act of 1949 directs the Secretary of Agriculture to support the
price of milk and dairy products at between 75 and 90 percent of parity.2 The act authorizes the .
purchase of products from processors at specified levels intended to fulfill the purpose of the act.
Prices established have ranged from $3.07 per hundredweight to $4.93 between 1950 and 1971,
at levels between 72 and 91 percent parity equivalent (Table 6).
A history of the different dairy products removed and the percentage of marketings
shows the government acquired very little in 1951 and sold some of its previous purchases.
Subsequent acquisitions were nominal in 1952, but in 1962 they amounted to 9 percent of the
milk fat and 14 percent of the solids—not-fat. Products purchased have been butter, and nonfat
dry milk and American cheese to a lesser extent. The influence of purchases in terms of
production varies with the year-by-year changes in demand (Table 7).
Moreover, a review of the disposal of stocks of dairy products acquired under price
supports shows very little has gone into commercial channels. Instead, large amounts have been
given to needy families, to public welfare agencies, and to schools and domestic institutions.
Various quantities were used for foreign aid and for special purposes. From a practical point of
view, most dairy products bought under the governmental supports were used for public benefit
and to bolster international relations.
It is not possible to predict what would be the exact price of butter, cheese, nonfat dry
milk or other products without the influence of the government price support program. Even
2Fetleral legislation passed in l970 makes the support levels based on parity optional in the case of butter fat.
8
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with this support earnings in dairy farming have lagged behind changes in wages and income of
industrial employees during the l960’s.
PARTII
THE ADJUSTMENT PROBLEMS
Milk production is an important source of income to individual farmers in each ofthe 48
states in the United States. But no two states are alike in either production or market potentials.
Even where milk is a major source of farm income there are contrasts. For example, New
Ham shire re orted marketin 342 million ounds of milk in 1970. Of this amount onl 16
7
9

 Table 6.---Milk Price Support Levels and Percentage of Parity, Marketing Years,
U.S. Average, 1950-1971
 
 
Year USDA Price Support Level of Year USDA Price Support Level of
Support, cwt Parity Equivalent Support, cwt Parity Equivalent
 
1950 $3.07 77 1961 $3.40 80
1951 3.60 85 1962 3.11 75
1952 3.85 91 1963 3.14 75
1953 3.74 90 1964 3.15 75
1954 3.15 80 1965 3.24 75
1955 3.15 I, 81 1966 3.27 73
1956 3.25 _, 83 1967 3.34 72
1957 3.25 81 1968 4.00 84
1958 3.06 75 1969 4.28 83
1959 3.06 77 1970 4.66 85
1960 3.23 76 1971 4.93 85
 
million (or 5 percent) was manufactured into products in the state. Minnesota, the third largest .
milk-producing state marketed 9,473 million pounds and manufactured 8,968 million. The _
manufactured output used the equivalent of 95 percent of the state’s marketing. Kentucky
farmers in the same year marketed 2,275 million pounds and the manufacturing industry in the ‘·
state used an equivalent of 60 percent of it. Wisconsin marketed 17,752 million pounds and
manufactured 12,919 million (or 73 percent) into products. In Wyoming, where milk production
was only 131 million pounds, more than half (56 percent) was manufactured. A state by state
comparison clearly shows that individual states have dairy problems of different magnitudes.
Similar, though less dramatic differences occur between separate geographic areas. A further ·
Table 7.---USDA Dairy Price Support Purchases 1949-1970
 
 
As a Percentage of Production
Year Milk Fat Solids Not Fat Milk Fat Solids Not Fat _
 
—-—--- (million pounds) --——-— - -————--— (percent) -·-----—- ·
1949 100.4 321.1 2.6 4.6
1950 40.9 339.9 1.1 4.9
1951 -24.0P/ 31.5 bf 0.5
1952 13.8 41.2 0.4 0.6
1953 387.5 668.9 9.7 8.6
1954 328.2 695.5 8.0 8.7
1955 179.6 558.0 4.3 6.8
1956 197.6 753.0 4.7 8.7
1957 222.1 867.5 5.2 9.8
1958 178.2 875.0 4.2 9.8
1959 123.8 815.6 2.9 9.1
1960 122.6 819.8 2.9 8.9
1961 305.0 1,075.3 6.9 11.2
1962 402.4 1,399.0 9.1 14.3
1963 291.8 1,210.1 6.7 12.3
1964 287.6 1,166.9 6.5 11.6
1965 217.4 1,074.0 5.0 10.8
1966 26.2 355.5 0.6 3.7
1967 276.3 719.1 6.6 7.5
1968 193.2 575.4 4.7 6.0
1969 171.6 421.5 4.2 4.4
1970 221.35/ 460.6E/ 5.3 4.8
 
Source: USDA Dairy Situation, March 1971, Table 19.
E/Preliminary. E/Domestic sales exceeded purchases
10
  _.,.. A

 analysis of marketings and use patterns based on Farm Production Regions will help put these
differences in perspective.3  For individual states, see Appendix Table A.)
I. REGIONAL COMPARISONS4
The Northeast, Lake States, Corn Belt and Pacific regions stand out in both the total
marketings and in production of milk eligible for fluid use. The western portions of the Corn
Belt, the Lake States and the Northern Plains region produce large volumes of milk that can be
used only for manufacturing products. Most states in the Northeast, southern and south
Motmtain 'regions produce only grade A quality milk. Reference is made to the individual states
in each of the Farm Production Regions in Fig. 3 and to summary data in Table 8.
V Table 8 is a consolidation of individual state data with respect to total marketing, the
grade A eligible supplies, estimates on how milk was used and, in the same table, the percentages
represented.
Summaries show that the Northeast marketed more than 23 billion pounds of milk in
1968 and that 22.5 billion (or 97 percent) was of grade A quality. The region consumed about 16
billion pounds (or 71 percent) of the grade A supply in fluid form. The surplus that amounted to V
6.5 billion pounds of grade and 646 million pounds of ungraded milk was used in manufacturing.
This substantial surplus of grade A milk occurred despite the fact the Northeast had 26.9 percent
of the U.S. population and only 21 percent of all milk marketings. The Lake States, Minnesota,
Wisconsin, and Michigan, produced 31.9 billion pounds of milk, of which 23.9 billion (or 74.9
percent) was manufactured. These states contained only 8.3 percent of the population and
- marketed 28 percent of the nation’s milk.
A further analysis shows that in 1968 the supply of grade A milk in each region was ·
greater than the estimated fluid use (Table 8, Cols. 2 and 6). The percentage of grade A milk used
for fluid purposes ranged from 57.5 percent in the Lake States to 83.6 percent in the Southeast
(Col. 7). The surplus of grade A production i