Dairy Industry Moves Southwest Seeking Warmer, Drier Climate

TAKE a look at the thermometer and ask yourself: ``If I were a cow, would I rather be living in South Dakota or New Mexico?''

New Mexico, of course. And you could have gotten the same answer last spring after checking the rain gauge. Cows thrive in a warm, dry climate. That is just one reason why the United States dairy industry is shifting to the Southwest and West.

The shift has been under way for four decades, says Richard Fallert, an economist with the US Department of Agriculture. But it has accelerated over the last 20 years, and it got a big push last fall from Midwestern floodwaters that ruined forage crops for cows.

Nationwide, milk production rose between 1980 and 1992 by almost 20 percent, to more than 150 billion pounds annually. At the same time, production per cow increased 30 percent. That efficiency gain allowed the US dairy herd to shrink to just under 10 million cows -

a million fewer than in 1980, USDA statistics show.

These changes were not felt evenly across the country. South Dakota lost almost one-fifth of its dairy cows during the 1980-92 period, while its output of milk nearly held level. New Mexico saw its herd grow two and a half times, and its milk output more than three and a half times.

The industry's shift to the West and Southwest reached a milestone last August when California captured Wisconsin's ``America's Dairyland'' crown by surpassing the state in monthly milk production. Although Wisconsin likely remained on top for the year as a whole, next year should establish California as the champ, says David Pelzer, spokesman for the United Dairy Industry Association.

Dairy workers in warmer states are spared the expense of buildings to protect cows from severe cold like the northern US has experienced this year, Mr. Fallert says. The growing season is longer in the West and Southwest. And irrigation allows production of better-quality forage, which in turn gives farmers higher milk yields per cow. The five leading states in production per cow in 1992 were New Mexico, Washington, California, Arizona, and Colorado.

Dairies in the Southwest and West also take advantage of economies of scale. ``We're milking about 3,700 cows,'' says Kenneth Harvick, manager of the Gore Dairy in the central Texas county of Comanche. That size herd is more than 10 times greater than at the typical dairy in the Midwest or North. Those areas used to ship milk to Texas when the local market was short, but ``that's starting to level out,'' Mr. Harvick says.

Big dairies tend to be specialized operations that run around the clock, milking their cows three times daily instead of the usual two, Fallert says. Land and labor are relatively less expensive in the West and Southwest. And some states or communities actively recruit companies to expand in their areas.

Federal milk marketing orders regulate the price processors pay to producers, Mr. Pelzer says. The lowest price is paid in Eau Claire, Wis., and rises the farther away a dairy is from that city. ``Thirty years ago it might have made a lot of sense,'' Pelzer adds. Though archaic in today's marketplace, the system is politically well protected.

``Our job is to drive up milk consumption,'' Pelzer says about the United Dairy Industry Association. The long-term trend in per capita consumption of milk is down, he adds, but total dairy sales, led by cheese, are rising.