Study finds Virginia dairy industry’s economic impact is significant

Virginia’s dairy industry accounted for about $2.3 billion in economic output in the commonwealth last year and employed nearly 8,000 people.

Findings on The Economic Contribution of the Dairy Industry in Virginia were releasedSept. 4 by the Weldon Cooper Center for Public Service at the University of Virginia. The study was conducted for the Virginia State Dairymen’s Association.

The state’s dairy industry includes not only dairy farming and milk production but also the processing of fluid and condensed milk and products like butter, cheese and ice cream. The study estimated that 7,975 people were directly employed in the industry in 2014.
When the multiplier effect of payments to dairy-related Virginia businesses and labor were considered, that workforce increased to 13,819 workers.

When the multiplier effect was applied to economic output, the total rose to $3.2 billion.
Milk is Virginia’s third-ranked agricultural commodity in terms of cash receipts. The state’s dairy sector is ranked 22nd nationwide in terms of cash receipts.

“This study of dairy’s economic impact illustrates just how valuable dairy farms are to the local economies in Virginia,” said Tony Banks, a commodity marketing specialist forVirginia Farm Bureau Federation. “A lot of people may drive by individual operations and think, ‘Oh, that’s just a dairy farm,’ but in reality dairy farms are capital-intensive businesses that generate a lot of economic activity.”

Like elsewhere in the United States, the study noted, “Virginia’s dairy sector has undergone profound change and restructuring in recent decades. … Milk cow inventories are now roughly half of what they were in 1971, but increased farm economies of scale, improved cattle breeding, health and nutrition and increased utilization of capital and advanced technology have doubled milk productivity per cow. As a result, there has been relatively little overall change in Virginia milk productivity levels.”

There are dairy farms throughout the state, but they are more concentrated in the Shenandoah Valley and Southwest Virginia, where foraging conditions make dairy farming one of the more viable land uses.

Virginia’s top-producing dairy county is Rockingham, with approximately 25,000 dairy cows and it accounts for more than a quarter of the state’s 93,000-head dairy herd. Rounding out the Top 10 counties for herd size are Franklin, 9,700 cows; Augusta, 7,000 cows; Pittsylvania, 6,900 cows; Fauquier, 3,700 cows; Wythe, 2,600 cows; Washington, 2,500 cows; Culpeper, 2,200; Montgomery, 2,000; and Shenandoah, 1,800.