Marv Post, President, SD Dairy Producers
Marv Post, President, SD Dairy Producers
VOLGA, S.D. – South Dakota’s dairy industry continues to grow both in the number of cows in the state and in pounds of milk production.
 According to the National Agricultural Statistics Service, total milk production in South Dakota in November 2022 was pegged at 348 million pounds, up 11% from November 2021. There were an estimated 186,000 dairy cows in the Mount Rushmore State in November 2022, an increase of 19,000 head from the previous November.
The state had about 150 permitted dairy farms, a number that has remained steady over the past year. In 2018, South Dakota was home to 250 dairy operations and 121,000 dairy cows.
“Similar to most all agriculture, scale is driven primarily due to efficiencies and ability to lower cost of production,” said Tom Peterson, executive director of South Dakota Dairy Producers. “South Dakota in recent years has also offered opportunity for dairy farmers with plant expansions over the past half dozen years and hopefully additional capacity coming in the future. South Dakota’s favorable agriculture and business climate give South Dakota Dairy Producers optimism that growth will continue at a steady and manageable pace in coming years.”
By contrast, South Dakota’s sister state of North Dakota has experienced a steady decline in the number of dairy farms and in the size of the state’s dairy herd. The Peace Garden State is home to 41 dairy farms with a total of 14,000 cows.
“South Dakota has lost a number of smaller dairy farms where the owners have basically aged out,” said Marv Post, a dairyman from Volga and president of South Dakota Dairy Producers. “The average size of dairy herds in South Dakota continues to creep upward. When I built a 70-cow dairy barn in 1982, it was the biggest dairy facility in the township. The definition of ‘big’ has shifted over the last 40 years.”
Post said the state’s thriving dairy industry has benefited all dairy farmers no matter how many cows they milk.
“Our dairy infrastructure has come back,” Post said. “We wouldn’t have the infrastructure that supports dairy farmers of all sizes without a thriving dairy industry. We wouldn’t have processors who look at the state and say, ‘If we build it, they will fill it.’”
The dairy industry has also brought vast benefits to the state’s crop farmers.
“We have seen the basis for cash grain go from negative to positive over the past few years, and dairy manure has proven to be a valuable source of locally sourced fertilizer for crop farmers who are located close to a dairy operation,” Post said.
The Valley Queen Cheese Factory in Milbank announced plans to add what equates to milk production from approximately 30,000 cows, according to Peterson.
“As many in the industry are aware, South Dakota has established itself as a dairy destination,” Peterson said. … “And while nothing is official, we continue to hear of other processors who have interest in the area. The I-29 corridor continues to draw attention from the dairy industry, be it in South Dakota or one of our close neighboring states.”
The expansion of Valley Queen Cheese Factor was driven by three factors.
“First and foremost, we have customers that have indicated an interest in buying more cheese from Valley Queen,” said Jason Mischel, vice president of sales and milk procurement at Valley Queen Cheese Factory. “Without customer demand, there really isn’t anywhere we can go from there.”
Secondly, Mischel said they had discussions with existing and prospective dairymen who indicated an interest in growing with the company.
“Collectively, dairymen view the I-29 corridor as a growth opportunity, and we like to think they liked the partnership opportunity that Valley Queen provided,” Mischel said. “Finally, we had the support and encouragement of shareholders and our board of directors to explore growth opportunities. At the end of the day, it was the right project at the right time with investment capital to back it.”    
South Dakota is home to nine large-scale milk processors. While the state’s dairy industry continues to expand its processing capacity, there has also been an increased interest recently in smaller, on-farm milk processing facilities.
“There has been some renewed interest in value-added processing at the farm level,” Peterson said. “South Dakota is home to several artisan cheesemakers with some also bottling milk in order to add value to the milk they produce on their own farms.”
Peterson said the practice is enhanced by organizations offering support and financial assistance through grants and other funding mechanisms. Many of these products are available at local grocery stores and several regularly distribute at farmers markets.
The dairy industry continues to have an effect on the state’s economy. According to the International Dairy Foods Association, South Dakota’s dairy industry had a total economic impact last year of $4.85 billion. The state’s dairy industry directly and indirectly created 14,700 jobs.
“South Dakota Dairy Producers looks to the future with much optimism on continued growth and success of both dairy farmers and our entire dairy industry,” Peterson said. … “The dairy industry in South Dakota has been a unified force working to strengthen the dairy industry, and this came about by the collaboration and vision of many stakeholders.”
Peterson said he anticipates that steady growth with occur along with an effort to balance available milk supply with production on the farm and markets with processors expanding to meet the supply levels.
“I think South Dakota has grown to the current scale because processors and producers engaged in dialogue to understand each other’s needs and goals,” Mischel said. “There is so much mutual dependence between large processing plants and large dairy farms that it drove a level of transparency and trust that maybe didn’t exist a generation ago. I think it’s been healthy for the industry.”