Thoughts
on the Future of the Dairy Industry
Speaking at information sessions sponsored by the Holstein Foundation,
Jerome Kozak, CEO of National Milk Producers Federation, discussed
the increased pressure for efficiency in the dairy business,
and the influence of the world market.
In 1998, we had fewer than 100,000 commercial dairy farms in
the U.S. Within ten years the current number of 92,000 will
be cut in half. Compare this figure with nearly 3.5 million
farms in existence in 1950, and it is evident that the dairy
business is not an area of rapidly-appreciating prices. Huge
profits from the sale of a high-margin product are not a reality.
Instead, earnings are only realized by high volume and cost-control.
Another critical focal area will be the development of the world
market, and its impact on America. Mr. Kozak talked about the
significance of the numbers 95 and 96. The first, 95%, is the
portion of U.S. dairy production that we market inside the U.S.
We only sell about 5% of what we produce to foreign customers.
The second number, 96%, represents the portion of the world
outside the U.S. That means that 96% of our potential customers
are beyond our borders.

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