The nation’s organic dairies are growing in their ability to produce milk relative to the inputs in the production process, but not nearly at the same rate as other dairies in the country, according to new research from the Department of Agriculture.
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A recent measurement of total factor productivity – a ratio of the total amount of goods produced relative to all inputs – showed conventional farms are growing their output at a rate about four times greater than that of organic operations. For organic farms, the TFP grew at an annual rate of 0.66% from 2005 to 2016. Conventional farms experienced annual growth of 2.5% from 2000 to 2016, ERS said in a report.

“While weather-related feed factors reduced productivity for organic farms, they contributed to a productivity growth for conventional dairy farms,” ERS said. “Technical efficiency increased productivity slightly on organic farms, but reduced productivity on conventional farms, while scale-and-mix efficiency reduced productivity for both types of farms.”

Productivity growth also demonstrated variations according to geography. ERS noted the fastest-growing states were in the West and Southwest, with the slowest growth taking place in the South.

According to ERS, annual TFP growth in the U.S. ag sector was 0.97% from 2000 to 2016.

Globally, consumers can’t get enough of the quality and taste of American dairy products. Foreign exports of American dairy are twice the volume of the nation’s domestic dairy consumption. Last year, about 18% of U.S. dairy production was exported, and economists forecast that percentage to grow more than 25% in 2023.

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