IDEAS home Printed from https://ideas.repec.org/a/gam/jagris/v14y2024i12p2369-d1550729.html
   My bibliography  Save this article

Challenges and Solutions for Small Dairy Farms in the U.S.: A Review

Author

Listed:
  • Syed H. Jafri

    (Department of Accounting, Finance, and Economics, Tarleton State University, Stephenville, TX 76402, USA)

  • K. M. Mehedi Adnan

    (Division of Agribusiness and Agricultural Economics, Department of Agricultural Education and Communication, Tarleton State University, Stephenville, TX 76402, USA)

  • Stefan Baimbill Johnson

    (Division of Agribusiness and Agricultural Economics, Department of Agricultural Education and Communication, Tarleton State University, Stephenville, TX 76402, USA)

  • Anzalin Ali Talukder

    (Division of Agribusiness and Agricultural Economics, Department of Agricultural Education and Communication, Tarleton State University, Stephenville, TX 76402, USA)

  • Mark Yu

    (Division of Agribusiness and Agricultural Economics, Department of Agricultural Education and Communication, Tarleton State University, Stephenville, TX 76402, USA)

  • Edward Osei

    (Division of Agribusiness and Agricultural Economics, Department of Agricultural Education and Communication, Tarleton State University, Stephenville, TX 76402, USA)

Abstract

Small-sized dairy farms (SSDFs) are integral to the agricultural landscape, providing economic, social, and environmental benefits to rural communities. However, they face growing challenges, including market volatility, rising production costs, labor shortages, and complex regulatory demands. This review synthesizes the current literature on the economic and environmental obstacles confronting SSDFs and explores strategies to enhance their sustainability and competitiveness. Key barriers include limited access to capital, high feed and energy expenses, and difficulties in adopting new technologies due to financial constraints. SSDFs also struggle to compete with larger farms benefiting from economies of scale and increased market power. Potential solutions include strengthening cooperative models, implementing diversification strategies, and leveraging policy support for targeted financial assistance and technology adoption. Case studies of successful SSDFs show that transitioning to organic production, adopting climate-smart techniques, and focusing on niche markets can significantly improve profitability and resilience. This review emphasizes the need for tailored policy frameworks, innovative financial models, and collaboration among stakeholders to support SSDFs. Future research should prioritize understanding SSDF-specific financial dynamics, assessing the cost-effectiveness of technology adoption, and developing strategies to enhance market access and long-term sustainability in the U.S. dairy sector.

Suggested Citation

  • Syed H. Jafri & K. M. Mehedi Adnan & Stefan Baimbill Johnson & Anzalin Ali Talukder & Mark Yu & Edward Osei, 2024. "Challenges and Solutions for Small Dairy Farms in the U.S.: A Review," Agriculture, MDPI, vol. 14(12), pages 1-25, December.
    • Handle: RePEc:gam:jagris:v:14:y:2024:i:12:p:2369-:d:1550729
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2077-0472/14/12/2369/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2077-0472/14/12/2369/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Leuer, Elizabeth R. & Hyde, Jeffrey & Richard, Tom L., 2008. "Investing in Methane Digesters on Pennsylvania Dairy Farms: Implication of Scale Economies and Environmental Programs," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 37(2), pages 1-16.
    2. Ashok Mishra & Christine Wilson & Robert Williams, 2009. "Factors affecting financial performance of new and beginning farmers," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 69(2), pages 160-179, July.
    3. Obed Quaicoe & Fafanyo Asiseh & Anthony Baffoe‐Bonnie & John N. Ng'ombe, 2024. "Small farms in North Carolina, United States: Analyzing farm and operator characteristics in the pursuit of economic resilience and sustainability," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 46(1), pages 13-31, March.
    4. Kumbhakar, Subal C & Ghosh, Soumendra & McGuckin, J Thomas, 1991. "A Generalized Production Frontier Approach for Estimating Determinants of Inefficiency in U.S. Dairy Farms," Journal of Business & Economic Statistics, American Statistical Association, vol. 9(3), pages 279-286, July.
    5. Tauer, Loren W. & Mishra, Ashok K., 2005. "U.S. Dairy Farm Cost Efficiency," Working Papers 127079, Cornell University, Department of Applied Economics and Management.
    6. Jonathan Walsh & Robert Parsons & Qingbin Wang & David Conner, 2020. "What Makes an Organic Dairy Farm Profitable in the United States? Evidence from 10 Years of Farm Level Data in Vermont," Agriculture, MDPI, vol. 10(1), pages 1-13, January.
    7. Catherine Paul & Richard Nehring & David Banker & Agapi Somwaru, 2004. "Scale Economies and Efficiency in U.S. Agriculture: Are Traditional Farms History?," Journal of Productivity Analysis, Springer, vol. 22(3), pages 185-205, November.
    8. Winsten, Jonathan R. & Parsons, Robert L. & Hanson, Gregory D., 2000. "A Profitability Analysis Of Dairy Feeding Systems In The Northeast," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 29(2), pages 1-9, October.
    9. Helen Caraveli & W. Bruce Traill, 1998. "Technological developments and economies of scale in dairy industry," Agribusiness, John Wiley & Sons, Ltd., vol. 14(4), pages 311-319.
    10. Foltz, Jeremy D. & Jackson-Smith, Douglas & Chen, Lucy, 2002. "Do Purchasing Patterns Differ Between Large and Small Dairy Farms? Econometric Evidence from Three Wisconsin Communities," Agricultural and Resource Economics Review, Cambridge University Press, vol. 31(1), pages 28-38, April.
    11. Hadrich, Joleen & Roberts, Megan & Tuck, Brigid, 2020. "The Role of Dairy Farmers in Minnesota’s Rural Economy," Extension Publications 303821, University of Minnesota, Department of Applied Economics, University of Minnesota Extension.
    12. Leuer, Elizabeth R. & Hyde, Jeffrey & Richard, Tom L., 2008. "Investing in Methane Digesters on Pennsylvania Dairy Farms: Implications of Scale Economies and Environmental Programs," Agricultural and Resource Economics Review, Cambridge University Press, vol. 37(2), pages 188-203, October.
    13. Richard Nehring & Jeffrey Gillespie & Carmen Sandretto & Charlie Hallahan, 2009. "Small U.S. dairy farms: can they compete?," Agricultural Economics, International Association of Agricultural Economists, vol. 40(s1), pages 817-825, November.
    14. Mahnken, Curtis L. & Hadrich, Joleen C., 2018. "Does Revenue Diversification Improve Small and Medium-Sized Dairy Farm Profitability?," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 33(4), November.
    15. Kristen Nelson & Rachel Brummel & Nicholas Jordan & Steven Manson, 2014. "Social networks in complex human and natural systems: the case of rotational grazing, weak ties, and eastern US dairy landscapes," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 31(2), pages 245-259, June.
    16. Ronald W. Cotterill, 2005. "Introduction to the forum on the Northeast Dairy Compact and articles on price transmission and market power in local U.S. milk markets," Agribusiness, John Wiley & Sons, Ltd., vol. 21(4), pages 451-454.
    17. Megan Swindal & Gilbert Gillespie & Rick Welsh, 2010. "Community digester operations and dairy farmer perspectives," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 27(4), pages 461-474, December.
    18. Winsten, Jonathan R. & Parsons, Robert L. & Hanson, Gregory D., 2000. "A Profitability Analysis of Dairy Feeding Systems in the Northeast," Agricultural and Resource Economics Review, Cambridge University Press, vol. 29(2), pages 220-228, October.
    19. Katarina Arvidsson Segerkvist & Helena Hansson & Ulf Sonesson & Stefan Gunnarsson, 2020. "Research on Environmental, Economic, and Social Sustainability in Dairy Farming: A Systematic Mapping of Current Literature," Sustainability, MDPI, vol. 12(14), pages 1-14, July.
    20. Kumbhakar, Subal C & Biswas, Basudeb & Bailey, DeeVon, 1989. "A Study of Economic Efficiency of Utah Dairy Farmers: A System Approach," The Review of Economics and Statistics, MIT Press, vol. 71(4), pages 595-604, November.
    21. Lauer, Markus & Hansen, Jason K. & Lamers, Patrick & Thrän, Daniela, 2018. "Making money from waste: The economic viability of producing biogas and biomethane in the Idaho dairy industry," Applied Energy, Elsevier, vol. 222(C), pages 621-636.
    22. Jerry L. Holechek & Hatim M. E. Geli & Andres F. Cibils & Mohammed N. Sawalhah, 2020. "Climate Change, Rangelands, and Sustainability of Ranching in the Western United States," Sustainability, MDPI, vol. 12(12), pages 1-24, June.
    23. Short, Sara D., 2004. "Characteristics and Production Costs of U.S. Dairy Operations," Statistical Bulletin 262279, United States Department of Agriculture, Economic Research Service.
    24. Bretford Griffin & Valentina Hartarska & Denis Nadolnyak, 2020. "Credit Constraints and Beginning Farmers’ Production in the U.S.: Evidence from Propensity Score Matching with Principal Component Clustering," Sustainability, MDPI, vol. 12(14), pages 1-12, July.
    25. James M. MacDonald, 2020. "Tracking the Consolidation of U.S. Agriculture," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(3), pages 361-379, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Benavidez, Justin R. & Thayer, Anastasia W. & Anderson, David P., 2019. "Poo Power: Revisiting Biogas Generation Potential on Dairy Farms in Texas," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 51(4), pages 682-700, November.
    2. Wang, Qiuyan, 2001. "A Technical Efficiency Analysis Of Pennsylvania Dairy Farms," 2001 Annual meeting, August 5-8, Chicago, IL 20662, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Boris Bravo-Ureta & Daniel Solís & Víctor Moreira López & José Maripani & Abdourahmane Thiam & Teodoro Rivas, 2007. "Technical efficiency in farming: a meta-regression analysis," Journal of Productivity Analysis, Springer, vol. 27(1), pages 57-72, February.
    4. Li, Xue & Mupondwa, Edmund, 2018. "Commercial feasibility of an integrated closed-loop ethanol-feedlot-biodigester system based on triticale feedstock in Canadian Prairies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 97(C), pages 401-413.
    5. Musemwa, L. & Mushunje, Abbyssinia & Muchenje, V. & Aghdasi, F. & Zhou, L., 2013. "Factors affecting efficiency of field crop production among resettled farmers in Zimbabwe," 2013 Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 161443, African Association of Agricultural Economists (AAAE).
    6. Ahmad, Munir & Boris E., Bravo-Ureta, 1996. "Technical efficiency measures for dairy farms using panel data: a comparison of alternative model specifications," MPRA Paper 37703, University Library of Munich, Germany.
    7. Ligia Alba Melo-Becerra & Antonio José Orozco-Gallo, 2017. "Technical efficiency for Colombian small crop and livestock farmers: A stochastic metafrontier approach for different production systems," Journal of Productivity Analysis, Springer, vol. 47(1), pages 1-16, February.
    8. Kompas, Tom & Che, Tuong Nhu, 2006. "Technology choice and efficiency on Australian dairy farms," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(01), pages 1-19, March.
    9. Paul Sharp & Ingrid Henriksen & Markus Lampe, 2011. "The role of technology and institutions for growth: Danish creameries in the late-19th century," Working Papers 11028, Economic History Society.
    10. Ligia Alba Melo-Becerra & Antonio José Orozco-Gallo, 2015. "Eficiencia técnica de los hogares con producción agropecuaria en Colombia," Documentos de trabajo sobre Economía Regional y Urbana 227, Banco de la Republica de Colombia.
    11. Nicola GALLUZZO, 2016. "An analysis of the efficiency in a sample of small Italian farms part of the FADN dataset," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 62(2), pages 62-70.
    12. Yakubu Abdul-Salam & Melf-Hinrich Ehlers & Jelte Harnmeijer, 2017. "Anaerobic Digestion of Feedstock Grown on Marginal Land: Break-Even Electricity Prices," Energies, MDPI, vol. 10(9), pages 1-21, September.
    13. Rahman, Sanzidur, 2003. "Profit efficiency among Bangladeshi rice farmers," Food Policy, Elsevier, vol. 28(5-6), pages 487-503.
    14. Tozer, Peter, 2017. "Pr - Impact Of Feeding Systems On The Profit And Efficiency Of New Zealand Dairy Farms," 21st Congress, Edinburgh, Scotland, July 2-7, 2017 345807, International Farm Management Association.
    15. Yanyan Liu & Robert Myers, 2009. "Model selection in stochastic frontier analysis with an application to maize production in Kenya," Journal of Productivity Analysis, Springer, vol. 31(1), pages 33-46, February.
    16. Jonathan Walsh & Robert Parsons & Qingbin Wang & David Conner, 2020. "What Makes an Organic Dairy Farm Profitable in the United States? Evidence from 10 Years of Farm Level Data in Vermont," Agriculture, MDPI, vol. 10(1), pages 1-13, January.
    17. Andréa Castelo Branco Brasileiro-Assing & Jini Kades & Paulo Antônio de Almeida Sinisgalli & Joshua Farley & Abdon Schmitt-Filho, 2022. "Performance Analysis of Dairy Farms Transitioning to Environmentally Friendly Grazing Practices: The Case Study of Santa Catarina, Brazil," Land, MDPI, vol. 11(2), pages 1-18, February.
    18. Kashiwagi, Kenichi & Mtimet, Nadhem & Zaibet, Lokman & Nagaki, Masakazu, 2010. "Technical efficiency of olive oil manufacturing and efficacy of modernization programme in Tunisia," 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa 96195, African Association of Agricultural Economists (AAAE).
    19. Coelli, Tim J., 1995. "Recent Developments In Frontier Modelling And Efficiency Measurement," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 39(3), pages 1-27, December.
    20. Fernandez-Cornejo, Jorge & Nehring, Richard F. & Erickson, Kenneth W., 2007. "Off-Farm Work and Economic Performance: Comparing Crop and Livestock Farms," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon 9904, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jagris:v:14:y:2024:i:12:p:2369-:d:1550729. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.