The number of dairy farms in the United States has dropped by more than half over the past twenty years, with an accelerated decline in 2018 and 2019. However, American milk production continued to grow during all those years.
Especially the number of small and medium-sized farms has decreased. This is evident from a USDA study into the development of the American dairy industry.
Dairy production is shifting toward much larger farms, and this shift shows no signs of slowing. Larger dairy farms achieve on average lower production costs and these advantages persist.
The closure of dairy farms in the US has received a lot of attention in recent years. Small and medium-sized dairy farms faced major financial challenges to modernize. In 2018, milk prices fell, and the gap between milk prices and feed costs narrowed. When a wave of farm closures hit the agricultural Northeast and Midwest, the number of dairy farms fell by 15 percent between 2017 and 2019.
The USDA report describes the ongoing structural and geographical transformation of American dairy farming. It shows that forty years ago the average size of a dairy herd was eighty cows. Since then the average size has steadily increased; in 2017 it was 1,300 cows.
The 2017 agricultural census counted 54,599 farms with dairy cows. Of those, 30,373 were 'small' commercial farms, with fewer than 200 cows. Ten years earlier, there were 47,873 such farms, and in 1987 there were 146,685 of these 'small' dairy farms in the US.
The current situation is that nearly 2,000 farms have herds of at least 1,000 dairy cows, and these farms milk more than half of the American cows. Twenty-five years ago there were just over 500 such 'large' farms and they milked less than 10 percent of the cows. Over time, production has shifted toward much larger farms, often with 5,000 or more cows.