South Dakota’s dairy industry continues to grow, according to industry experts and recent statistics.

The state’s dairy herd currently stands at 94,000 head, up significantly from its low point of 80,000 head in 2005. The state currently has approximately 400 dairy operations. Ten years ago, South Dakota had about 1,200 dairy operations and a dairy herd of nearly 100,000.

South Dakota’s dairy industry has mirrored the national trend towards fewer and larger operations.

“About half the state’s dairy cows are in herds of 500 head or more,” said Dr. Alvaro Garcia, Extension Dairy Specialist at South Dakota State University. “And about half the state’s milk production comes from herds of 500 head or more.”

South Dakota’s dairy herd produced 1.8 billion pounds of milk in 2009. Average milk production per cow was 20,128 pounds, which put the state at 14th highest in the nation in per cow production. The national average milk production per cow was 20,576 pounds in 2009. 

“Dairy producers in the state continue to improve production per cow and milk quality through Extension programs aimed at their labor forces,” Garcia said. “Improved milk production per cow results in less cows needed to maintain similar volumes of milk production and reduced environmental impact.”

The dairy industry’s direct impact on South Dakota’s economy was $361,924,000. Indirect impacts added $123,519,757 and induced impacts added another $23,216,893, for a total economic impact of $508,660,650.

Dairy processing also infused huge amounts of dollars into the state’s economy. The manufacture of butter, cheese, ice cream, dried dairy products and fluid milk bottling together pumped another $769,185,556 into South Dakota’s economy. In the month of July 2010 alone, the state’s cheese manufacturers produced some 20.4 million pounds of cheese. South Dakota exports 98 percent of its dairy production.

Each dairy cow in South Dakota produces an estimated $15,524 of economic impact. The state’s dairy industry directly and indirectly employs an estimated 1,800 people and produces annual business taxes to the tune of $10,989,728.

South Dakota dairies saw a 4.4 percent increase in the number of cows and a milk production increase of five percent between the third quarters of 2008 and 2009. This put the state in the number one position nationally for both these categories.

Dairy cattle consume vast quantities of the state’s corn, soybean, hay and dried distillers grain (DDG) output. 

For instance, a typical lactating cow ration would contain 5.4 pounds of alfalfa hay, 19.6 pounds of haylage, 40 pounds of corn silage, 18.2 pounds of corn, 5.4 pounds of DDG, and 2.25 pounds of soybean meal. During a standard 300 day lactation, the 94,000 cows in the state’s dairy industry would account for the consumption of 76,140 tons of alfalfa hay, 276,360 tons of haylage, 564,000 tons of corn silage, 9,165,000 bushels of corn, 76,140 tons of DDG and 31,725 tons of soybean meal. 

Dry cows consume approximately 14 pounds of forage and about 7 pounds of grain each day. This would add another 39,480 tons of forage, either corn or hay based, and another 705,000 bushels of corn to the consumption numbers. 

Assuming the same one percent of bodyweight of forage consumption daily and 0.5 percent bodyweight of grain daily, the 33,000 replacement heifers being raised in South Dakota would consume another 42,157 tons of forage and 752,812 bushels of corn annually.

South Dakota’s 2010 corn crop is projected to average 145 bushels per acre. This means that the state’s dairy herd would consume 73,260 acres’ worth of corn harvested for grain. Assuming an average silage yield of 25 tons per acre, dairy cattle in the state would consume up to an additional 25,825 acres, for a total consumption of nearly 100,000 acres of corn. 

Over the past several years, the state has been aggressively courting dairy operators who might be willing to relocate to South Dakota. This effort has met with some success, with dairy operators moving into the state from many other areas of the nation. Dairy operators have also relocated to South Dakota from several other countries including The Netherlands, England, Ireland and Canada.

“Most of these operations are fairly big, but we welcome dairy operations of any size,” said David Skaggs, Dairy Development Specialist at the South Dakota Department of Agriculture. 

“We have recently seen an upsurge in the numbers of dairy producers interested in relocating,” Skaggs said. “The state has much to offer: lots of space, low cost feed, affordable electric rates, reasonable zoning regulations and a solid infrastructure. We also have strong milk markets. Some of our processors are looking at expanding, but we first need to secure more milk production.”

Skaggs is also working on retaining operations that are currently owned by people who are approaching retirement age.

“It’s extremely difficult for young people to get started in dairying these days,” he said. “We want to work with dairy operators who are looking at retiring in a few years and connect them with young people who want to dairy. This may require some thinking outside of the box, but we are willing to assist them in any way we can.”

“There is no better place to raise a family than on a dairy farm in rural South Dakota,” Skaggs said.

Information for this article was gathered from the South Dakota Agricultural Statistics Service, the USDA National Ag Statistics Service, the South Dakota Department of Agriculture and South Dakota State University Dairy Extension Service.