Pennsylvania Dairy Study 2017

Pennsylvania’s dairyland is in a state of transition, with new dynamics emerging every day. To provide insight on a path forward for this important segment of Pennsylvania agriculture, the Pennsylvania Department of Agriculture and the Center for Dairy Excellence have commissioned Dr. Andrew Novakovic, Dr. Mark Stephenson and Dr. Chuck Nicholson to lead a year-long study to evaluate opportunities and inhibitors to grow Pennsylvania’s dairy industry.

Incentives for Additional Processing Identified: An investment in additional dairy processing capacity in Pennsylvania could generate $34.7 million annually in combined revenue generation and cost savings, according to an “Analysis of Economic Incentives for Additional Dairy Processing Capacity in Pennsylvania” study released by Drs. Chuck Nicholson, Mark Stephenson and Andrew Novakovic. The study was commissioned by the Pennsylvania Department of Agriculture and the Center for Dairy Excellence as part of a comprehensive look at competitiveness and growth opportunities within Pennsylvania’s dairy industry.

Additional Components of the 2017 Pennsylvania Dairy Study: Below are additional components of the 2017 Pennsylvania Dairy Study. To read the full reports and key findings, click on the links below.

  • Phase I Findings: This study was begun early in 2017 after discussions with leadership of the Pennsylvania Department of Agriculture and the Center for Dairy Excellence. The objectives for Phase I are primarily diagnostic, focusing on a review of aggregated secondary data regarding farm and processing sector performance.
  • Farm Financial Analysis: This component compares the financial performance of Pennsylvania farms to those in three other states with similar agronomic resources (Michigan, New York and Wisconsin) and across farm size categories regardless of the state.
  • Dairy Export Potential to PhilaPort System: This component describes the current capabilities of the Port of Philadelphia to support growth in dairy product exports, assesses the port’s historical role in dairy product exports from the US and the mid-Atlantic, and estimates selected economic impacts of reallocation of dairy product exports from other ports to PhilaPort.
  • Analysis of the Impacts of the Pennsylvania Milk Marketing
    Board on Fluid Milk Retail Prices and Processing Volumes: This component reviews evidence regarding two hypothesized effects of the PMMB: price enhancement that could reduce fluid milk sales and incentives to process fluid milk products outside of Pennsylvania.
  • Economic Multiplier Impacts: The purpose of this analysis assesses the contribution of dairy to the Pennsylvania state economy, using input-output
    analysis to construct a set of economic multipliers custom to the Pennsylvania economy and six sub-regions. To undertake this analysis, researchers use the economic modeling system IMPLAN and the base year data for 2015.

Input wanted on Institutions and Programs: Feedback from industry stakeholders is requested on the programs and organizations supporting Pennsylvania’s dairy industry. Click on this link to complete a survey and provide your feedback on the organizations and programs that are supporting the industry and those that should be modified.

Presentations related to Study:

  • Dr. Nicholson presented a preliminary look at the findings of Phase I of the study at the 2017 Ag Progress Days Dairy Industry Breakfast. Click here to access that presentation. 
  • Dr. Novakovic presented a look at why the study is being completed and what needs to be considered during the 2017 Dairy Financial Conference and the listening sessions held in September. Click here to access that presentation.

For more information about the study or when findings will be available, please contact the Center for Dairy Excellence at 717-346-0849 or by emailing Dairy Risk Management Program Manager Alan Zepp directly at azepp@centerfordairyexcellence.org.