From the desk of Karlin Linhardt
Since our early days as a republic, family-owned dairy farms played a crucial role in fueling the growth of Manifest Destiny: the essential source of fresh milk, cheese, and other dairy products to burgeoning local communities across our expanding nation.
The rustic image of these farms and their connection to communities has endured in the minds of Americans right up through the Baby Boom generation. My parents grew up on Missouri farms with large families during the depression. I spent summers bucking 60-pound hay bales in the August heat and humidity, stockpiling winter feed for the family’s dairy herd…then scratching and sneezing for days after from my virulent hay fever reaction.
Today, family-owned dairy farms face enormous economic challenges. In 1975, Connecticut had 817 dairy farms; currently that number is less than 90. “Well, consumers have so many more choices, and their changing tastes, lactose-intolerance, etc., must be the culprit, right?” Not really. Economic impact studies project a global dairy market growth rate of 6.4% CAGR through 2028.
In fact, current consumer sentiment should be a boon to family dairy farms. A 2022 FMI/NielsenIQ survey found that 72% of shoppers said that transparency of food sourcing, ingredients, and prep was extremely important when choosing food brands and food retailers. Despite these sentiments, the largest threat to the family dairy farm is large-scale industrial dairy production.
Dairy farming still defines America, but now as an example of surviving and thriving in capitalism’s brutal cycle of disruptive economic change within industries. Let’s take a look.
In 2019, the Top 10 U.S. Dairy Producers controlled almost 60% of industry market share:
This list is comprised of two “types” of companies:
- S. or internationally based conglomerate corporations
- Dairy Farm co-ops or employee-owned companies
In 2019, the Top 4 “co-op” based companies represented ~1/3rd of all U.S. dairy farms; the other 24,000 farms are on their own. These companies primarily source their supply from 6 of the Top 10 milk-producing states in the U.S.: California; Wisconsin; Idaho; Texas; New York; Minnesota.
- In 2022, those states added 70,000 dairy cows to their herds since 2019
- The other four “Top 10” states reduced their herds by 103,000 cows over the same time, reflecting the accelerating consolidation of dairy production throughout the U.S.
Source: Statista, 2023
The growth/consolidation of these top producers, and their increasing control of sourcing and pricing, is fueled by two factors:
- Loss of total dairy farms: from 2016 to 2020, total operating U.S. dairy farms declined by almost 20% (~9,500 farms)
- Increased size of operating farms: since 1990, the average herd for U.S. dairy farms has increased from 80 to 300 cows
Source: National Milk Producers Federation (NMFP), 2023
Today, the 39,000+ U.S. dairy farms (97% family-owned) face a daunting challenge: invest significant capital (often with loans/higher debt) to expand herds and production capacity, while the Top 10 companies who dominate the market grow more powerful in their ability to negotiate prices and dairy farms’ profitability.
Connecticut dairy farmers apparently are up to the challenge. In 2003, six Connecticut family-owned dairy farms formed a co-op to secure their families’ farm legacies for the future: The Farmer’s Cow. The farms include small, family-run operations and larger, multi-generational family-owned farms dating back many generations.
They share a common commitment to producing dairy products of exceptional quality while maintaining the health and well-being of their animals and the environment. Their mission: support local agriculture through
- farmland preservation
- sustainable farming practices
- education & community outreach
- and most critically, sustainable economic viability from new revenue/sales channels
Besides selling their raw milk production to the large agri-businesses (as all dairy farms must do), The Farmer’s Cow is investing to create additional revenue streams that connect them directly to their communities and environmentally sustainable practices, including:
- Farmer’s Cow-branded packaged goods sold in grocery/retail stores throughout New England
- The Digester: mechanical technology that converts cow manure into natural gas for commercial use
- The Farmer’s Cow Calfe’ & Creamery: fast casual restaurants featuring locally sourced ingredients in their branded ice cream, sandwiches, and more. And creating a community gathering place for families to connect with the stories of their local dairy farmers and the food they grow for them.
After weathering the two-year impact of the pandemic, The Farmer’s Cow Calfe’ & Creamery is ready to expand on their current Connecticut eateries, building on the brand’s awareness throughout New England, and eventually beyond the region as the co-op expands their model into other states.
It’s the ultimate example of a true “farm to table” concept: a dairy farm co-op supporting local agriculture, promoting sustainable farming practices, and providing high-quality, locally sourced products directly to consumers. By working together, these six farms have created a brand that’s rooted in their local community, celebrates the heritage of farming, and showcases the best of what the region has to offer.
Karlin Linhardt is recognized as a premier food service, national chain, and restaurant industry Marketing & Market Analytics expert, Linhardt has worked with the biggest brands on the globe. Early experience included a decade at Anheuser-Busch as a marketing manager, followed by another decade as the Senior Director of Marketing at McDonald’s. From there, a four-year stint as the corporate Executive Vice President of Marketing with Ovation Brands, a privately-held restaurant industry management company, whereby he strategically directed marketing and branding for 533 commercial/retail units, earning $1.5 Billion in sales.
Additional notable positions and achievements include Linhardt’s serving as the Senior Vice President of Marketing for Subway-North America, to lead a complete brand transformation for its next 20 years of global growth. His most recent major corporate position was as the Global Chief Marketing Officer for Papa John’s-International, whereby Linhardt strategically directed a performance turnaround for the world’s third (3rd)-largest pizza restaurant brand, with over $4 Billion in annual revenue – developing and managing all aspects of global marketing, brand management, media and corporate communications, and analytics.