Category: Cooperative Extension
The Rise of Raw Milk: Can Delaware’s New Law Revitalize Small Dairy Farms?
October 14, 2024 Written by: Kofi Britwum, Assistant Professor of Farm Management (britwum@udel.edu)
In the summer of 2024, the Delaware General Assembly passed “The Consumer Choice Milk Act,” which, when signed by Governor Carney, will allow consumers to directly purchase unprocessed, unpasteurized, and unhomogenized milk from dairy producers who hold raw milk permits. To better understand this law in the context of modern dairy farming, it is important to consider some historical background of the industry.
Dairy industry
The dairy industry in the United States has been undergoing a steady decline for decades, and the hardest hit are small and medium-sized farms. Once a thriving sector, the number of dairy farms has dwindled dramatically—from 5.2 million in 1935 to just about 648,000 in 1970 and to approximately 24,000 dairy farms in 2022 that sold milk. Delaware is no exception; today, about 15 dairy farms remain in the state. This has been precipitated by pressures of low milk prices and high operational costs.
Prior to, and even in the early decades of the 20th century, dairy farms were not specialized, and farmers doubled as producers and distributors. A combination of growing cities coupled with a growing demand for milk and the expansion of the railroad enabled milk to be transported over longer distances. With favorable prices and rising demand, dairy farmers found it worthwhile to concentrate on production, marking the beginning of industry specialization. Yet, the Great Depression severely affected the industry, triggering a collapse in milk prices and reducing consumer purchasing power. This led to market instability and prompted calls for government intervention through price support programs, with several variations of such programs over the decades.
Challenges in the industry
Over time, a combination of these factors—specialization, price drops, and market consolidation—has driven the industry to shrink dramatically in scale. Today, most US dairy cows are found on farms with more than 1,000 animals, a stark contrast to 30 years ago when small herds of around 80 cows were more common, according to the U.S. Department of Agriculture’s Economic Research Service (USDA-ERS) estimates. Although total milk production has increased by 50% over the past three decades, the number of dairy farms has fallen by three-quarters, concentrating the industry in the hands of fewer, larger players. Simultaneously, changing consumer habits have exacerbated this decline. The average daily fluid milk consumption per person dropped from about 0.96 cups in the 1970s to just 0.49 cups in 2019. Changing dietary habits, reduced cereal consumption, an urban lifestyle, and shifting perceptions about milk’s nutritional value have all contributed to this trend. The decline in whole milk consumption has been somewhat offset by an increase in lower-fat options like 2%, 1%, and skim milk. Milk exports are also growing, which may seem beneficial for the industry overall but primarily favors large dairy farms due to their ability to achieve economies of scale, which lowers their per unit costs. In contrast, small farms are not in a position to compete under these conditions, leaving them at a significant disadvantage.
In light of these challenges, could a niche market offer a glimmer of hope to small dairy farms? Perhaps! Proponents of raw milk are optimistic it can turn around the fortunes of small dairies, especially given its increase in popularity. According to recent data, weekly sales of raw milk in 2024 increased by 21% compared to the previous year. USDA-ERS reports that between 2014 and 2016, 3.2 million adults consumed or served raw milk weekly, and this number may well be higher since this report was released. The growing interest in raw milk is largely being fueled by the “eat local” and unprocessed food movements, with consumers seeking out what they perceive as healthier and more natural options.
Senate Bill 273
In Delaware, Senate Bill 273, which allows the sale of raw milk, passed in June with bipartisan support. The state will soon join several others permitting raw milk sales for human consumption, though regulations on who can sell and where it can be sold vary. Once enacted, this legislation will enable consumers in Delaware to purchase raw milk directly from dairy farmers. Proponents of Delaware’s new legislation have argued that allowing the sale of raw milk will provide much-needed revenue for small dairy farms that have struggled to compete in a market dominated by large-scale producers. Advocates also believe that for small dairy farms, selling raw milk could be more profitable than selling to large processors in an era where prices tend to be volatile with thin margins.
However, raw milk remains a controversial product due to the potential health risks it poses. The Centers for Disease Control and Prevention (CDC) warn that pasteurization is necessary to eliminate harmful bacteria and pathogens. The CDC further contends that consumption of raw milk can pose serious health risks, especially for vulnerable groups like children, the elderly, and pregnant individuals. Despite these concerns, demand for raw milk persists, with proponents arguing it offers unique health benefits and supports local farmers.
While it is too early to predict the full impact of the proposed law, the growing consumer interest in raw milk suggests there could be an untapped market that small Delaware dairy farms might benefit from. This legislative win for small and medium-sized dairy farms could well be the lifeline they have long sought, though its potential to reshape the future of small-scale operations will only become clear over time.