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Dairy industry continues to evolve, grow in Texas despite national issues
By Darren Turley, executive director
The declared bankruptcies of Dean Foods, the largest U.S. milk producer, and Borden Dairy Co., one of the nation’s oldest and largest dairy companies, have not only shaken the dairy industry, but have also made others ask, “What is going on with milk?”
In my opinion, these bankruptcy filings are prime examples of a reluctance by the industry to change from the standard milk cartons in schools and the plain jugs in stores. By contrast, innovative products such as Fairlife have grown in market share. Since Fairlife’s ultra-filtered milk debuted in 2014, sales have grown by double digits each year and reached more than $500 million in 2019, according to Nielsen AMC figures provided by Coca-Cola, which acquired full ownership of the company from its joint venture partner Select Milk Producers in early January.
The necessity of innovation for the dairy industry to survive and prosper can also be seen on the farm. The Midwest is seeing a large number of dairy farms go out of business. Old facilities that have not grown or modernized are facing some serious decisions about their future.
In Texas, thankfully, we are fortunate to see our dairy industry advance and diversify. One example is the automated “robotic” dairies some producers are installing. While the number of dairy farms in Texas continues to slowly drop, we are not seeing the large-scale loss of farms seen in other states. And our state’s milk production actually is growing. USDA figures show that production on Texas dairies grew almost 9% between November 2018 and 2019 (the latest figures available), to more than a whopping 1.1 billion pounds of milk.
Following the headlines about Dean and Borden, the Texas Association of Dairymen has fielded several calls from media asking how these bankruptcies will impact the Texas dairy industry.
We certainly want to see all in the dairy industry be successful, and we hope these processors will figure out a way to continue to do business. But we also see these media calls as an opportunity to promote the vibrancy of the Texas dairy industry.
While dairy farmers in other states likely will be impacted by the bankruptcies of Dean Foods and Borden Dairy Co., new processing plants have come online in Texas to take our dairy farmers’ milk. We expect to see the growth of production and new facilities continue.
As we start a new decade, I believe we are seeing the changes in fluid milk processing as the start of new things to come. The future of fluid milk processing is probably at a turning point, but the industry is poised to move Texas dairy producers into the next decade.
Texas Association of Dairymen is excited about the future of our industry in Texas.