NMSU Dairy Extension


Mission

Providing information, technology and sound science to and regarding the dairy industry in New Mexico.

Goals

Ensure long term sustainability of the dairy industry in New Mexico. The Extension Dairy program provides New Mexico dairy farmers with sound scientific information related to production, management, environmental and regulatory matters, while being a resource for public stakeholders providing clear and concise information regarding dairy farming in New Mexico.

Environmental impact statement regarding the New Mexico dairy industry (Sep. 2023):
New Mexico dairy industry is an environmental solution
. Dairy producers in New Mexico have increased production efficiency primarily through improved nutrition by about one third over the last 25 years. Fewer cows doing more with less means that more of the carbon from feed going into the cow will go to nutritious protein such as milk and meat, and less leaves the cow as GHG’s (Green House Gas). A great story of sustainability. Current data indicate that the collective footprint of the dairy herd in New Mexico has declined by about 10%, which says that dairy farming in New Mexico is an environmental solution. Furthermore, on-farm research allows New Mexico dairy producers to identify additional management practices (tools) which fit their operations and will further reduce their environmental footprint and reach industry goals of Carbon Neutrality by 2050.

New Mexico Dairy Facts & Stats

NMSU Dairy Extension and Affiliated Training Programs for Dairy Owners, Managers and Employees

Importance of the New Mexico Dairy Industry

The State of the Dairy Industry in New Mexico: pandemic turbulence was the prelude for the storm to follow.

Robert Hagevoort, Professor and Extension Dairy Specialist, NMSU Dairy Extension Program (September 2023)

NM Dairy, a considerable economic force. Despite some of the changes in recent years, New Mexico dairy remains in the top ten states for dairy production, contributing according to NMDA1 and IDFA2 data $2.2B direct and $4.2B indirect to the bottom-line of the State (numbers include processing), providing about 7,000 direct jobs and 18,000 indirect jobs. New Mexico cheese production is 4th in the nation and 7.4% of all the US cheese is produced in New Mexico. As a matter of fact, the largest US cheese plant calls Clovis, New Mexico home. Dairy cows do well in New Mexico because of the dry climate which at the higher elevation cools of nicely during the nighttime allowing cows to dissipate summer heat and do well in the typically open lot dairies. There are a few hot days in the summer, and a few cold days in the winter, but not enough to warrant cows to be housed inside as the weather would require in most other parts of the country.

NM Dairy, a changing neighborhood. Change is inevitable, especially after the turbulence of the last three years. New Mexico was home to about 180 dairies in 2004, but consolidation has reduced that number to right around 100 dairy operations at the beginning of 2023. That is a loss of about 40% of the operations in almost 20 years. As alarming as this sounds, to put this in perspective, the NM rate of consolidation is actually less than the US average dairy consolidation rate (55%) over the same time span as well as California’s consolidation rate (46%), Arizona’s Consolidation rate (55%), and even Texas consolidation rate (60%) despite its phenomenal growth in milk production. Consolidation refers to the number of operations declining (closing its doors), while the cows from these operations finding alternate homes. This means that the total number of cows does not change, and because of expansion of remaining dairies that number can even grow. The number of dairy cows in New Mexico peaked in 2006 and remained fairly stable till 2020 but has since seen a significant drop (-42,000 cows) down today about 18% from the peak of 348,000 in 2006. With a rapidly expanding dairy industry in South Dakota, there was industry talk that many of the cows leaving New Mexico may have looked for cooler weather. As cow numbers decrease, even though individual cow efficiency continues to increase, at some point milk production will also follow that trend: the volume of milk shipped from New Mexico dairies peaked in 2018 and is down 14% today. In neighboring Texas, albeit consolidating 67% of its dairy farms, the Texas dairy industry was able to double the herd size while improving output a whopping 3.5 times! Many industry analysts point to diminishing water availability and resulting increase in production costs in New Mexico at the southwestern edge of the Ogallala, as one of the primary reasons for these changing dynamics. The individual herd size however continues to rise and remains the largest in the country at about 2,700 cows: a tenfold difference with the average US dairy herd.

NM Dairy, weathering the storm. Dairy in New Mexico, much like dairy across the US is facing what may prove to be the most serious financial challenge to date, and an accelerated pace of consolidation may result. In 2020 and 2021 the dairy chain was forced to adjust to severe supply chain interruptions ranging from school and restaurant closures and a shift towards in-store purchasing and at home meal preparation. This however was only a prelude to the storm which was to follow during the 2nd half of 2022 and 2023. A resilient industry lead by strong exports forged its way into 2022 with soring and historical dairy prices. However, under the surface of a seemingly smooth exit from turbulent times, similar economic forces driving milk prices additionally fueled by drought, pushed feed prices and other production costs to unprecedented heights, cutting increasingly into dairy profitability. Financial data show that the first 6 months of 2022 were very good for New Mexico producers, and likely the best since 2014. As US average all-milk prices topped an unprecedented $27 per hundredweight (cwt) in April and May 2022, total feed costs quickly hit a record $16.22 per cwt in August of that year. By February 2023, record exports had come back down to earth and by July exports were down 12% over 2022, much of that due to economic weakness and stagnation in China. Mailbox milk prices in May of 2023 in New Mexico had slipped 30% compared to May of 2022. Earlier in the year, based on average 1st quarter feed prices, NMSU Dairy Extension estimated that these milk prices New Mexico would result in losses exceeding $4 per cwt. At the time of this writing in September of 2023, with corn prices hovering around $4.65 per bushel, down 40% from their highs in May of 2022, and forage prices slowly declining as a result of great precipitation in much of the mountains of the west during the winter (see U.S. Drought Monitor3) the prospects of profitability returning to New Mexico producers has improved, but with sluggish dairy demand and an uncertain economic outlook worldwide, this feat is still far from a reality.

NM Dairy, an environmental solution. In 2020 the dairy industry announced its commitment to be Net Zero or carbon neutral by 2050. A closer observation of what that means for New Mexico dairies resulted in some amazing findings.

As previously mentioned, the New Mexico total herd size has remained fairly constant over the last 15 years. At the same time producers have managed to improve production with 33% (from 62 to 82 lbs/hd/d). This means that the industry can make a valid argument that methane emissions per unit of milk have significantly declined. Capper and Cady (2020)4 reported that between 2007-2017 the US dairy industry improved production with 25% and GHG emissions only increased 1%. Initial modelling efforts for New Mexico based on increased efficiency demonstrate a decrease in GHG emission intensity of 8% since 2000 and 12% since 1990 per unit of milk produced.

NM Dairy and green or resilient technologies. The above reduction in GHG is the result of applying the great many tools and technologies dairy producers are continuing to utilize to lessen the footprint of a dairy cow. It bears reminding though, that dairy cows naturally produce GHG as a result of what cows biologically are meant to do: convert humanly indigestible, unusable and only for ruminants re-usable fibrous feed- and by-products into valuable energy and protein. Examples of these technologies are: continued improvement towards a more efficient cow and more efficient ruminal bacteria; more precise nutrition advice to tailor the ration exactly to the needs of the cow (much like human athletes); modification of the bacterial fauna in the rumen to cater to bacteria which either produce less GHG, or those that are more efficient capturing the energy and converting it to usable products; handling dairy manure in ways that lessens GHG emissions to the environment; using technologies to capture manure energy for renewable energy; using the remaining cow manure as an organic additive to the soil profile to capture and sequester carbon in the soil profile; and many other available green farming practices. In addition, there is a host of manure management practices being investigated, evaluated, and implemented, which focus on managing manure with the specific aim to avoid the production and release of GHG’s, as well as the capture and of nutrients such and nitrogen and phosphorus.

Dairy farmers: the original environmental stewards. It is important to remember that dairy farmers are the original recyclers and environmental stewards no matter the size of the farm: all that changes is the scale, not the principles. New Mexico dairy farmers are committed to continuing to demonstrate they are a part of an environmental solution, despite the misleading headlines. How’s that for a conversation changer?

Dairy Impacts in NM and US
The Economic Impact of Dairy Products NM U.S.
Total economic impact of dairy produced/sold 2 $2.2B direct, $4.2B indirect $231B direct, $522B indirect
Contribution to GDP = 6.7% of NM GDP ($95.3B) = 3.5% of U.S. GDP
Dairy Receipts – sales of dairy products 1 $1.3 billion
Total direct jobs generated in dairy industry 2 6,909 direct jobs 1.0 million direct jobs
Wages earned as result of dairy (direct) 2 $1.3B paid in direct wages $183B paid in direct wages
Indirect jobs supported by dairy industry 2 17,728 indirect jobs 2.3 million indirect jobs
Cheese production 5 7.4% of US cheese 4th in U.S.
Number of dairy farms 6 107 farms (2022) Down 43% from 2004 (181 farms)
Total number of milking cows 7 288,250 (2022) Down 18% from 2006 (348,000)
Number of cows per dairy 8 2,694 (2022) 1st in the U.S.
Milk produced 6 7,077 M lbs (2022) 218,382 M lbs (2019)
Contribution to national milk production 7 3.2% 9th in the U.S.
Milk productivity 8 24,541 lbs/cow/lact. (305d) 9th in the U.S.

  1. NMDA, 2021: Ag Statistics, Jan 2023
  2. IDFA, 2021
  3. U.S Drought Monitor
  4. Capper and Cady (2020)
  5. Leading States in Cheese production in 2021
  6. Southwest Marketing Area (FO 126), Jan 2023
  7. USDA NASS, Jan 2023
  8. Progressive Dairyman

Updated September 2023