Where Did All the Dairy Farms Go?

There's a moment in Episode 338 of the Prairie Farm Podcast that kind of stops you in your tracks. Derek Orth — fourth-generation dairy farmer in southwest Wisconsin — is sitting in his barn, cows shuffling around in the background, and he says plainly that if his two Hispanic workers decided to go home to Nicaragua tomorrow, "either the cows would be gone or the robots would be ordered."

That's not a dramatic statement for Derek. That's just Tuesday.

It's also, in a lot of ways, the whole story of American dairy farming told in one sentence.

The Numbers Don't Lie

Here's a stat worth sitting with for a second. In 1970, the United States had more than 648,000 dairy farms. By 2022, according to the USDA Census of Agriculture, that number had fallen to just 24,094. And the bleeding hasn't stopped — the U.S. lost another 6% of its remaining dairies in 2024 alone, with projections suggesting roughly 2,800 more will close in 2025.

That's a 96% collapse in commercial dairy operations over about 55 years. And here's the gut-punch part — total milk production actually increased during that same period. The cows didn't go anywhere. The farms did.

Get Big or Get Out

You've probably heard that phrase thrown around in agriculture circles. It's not just a saying — for dairy farmers, it's basically been federal policy for decades. The economics of dairy are brutal and structural. A farmer doesn't set the price of their milk. That price is tied to commodity markets, ultimately anchored to butter, cheese, and dry whey traded at the Chicago Mercantile Exchange. The farmer just has to figure out how to survive inside that number.

As Derek explained in Episode 338, he gets paid per hundred pounds of milk — about 12 gallons — and right now that base price sits around $16 per hundredweight. Do the math and that's roughly a dollar and a quarter per gallon at the farm gate. He gets a premium above base for his Jersey cows, which produce higher-component milk better suited for cheesemaking, but the underlying reality doesn't change: the price has nothing to do with what it costs to run the farm.

So what do you do? You either get bigger to spread costs across more cows, or you're out. USDA research confirms it — smaller farms have nearly double the production costs per unit of milk compared to the largest operations. That's not a small gap. That's the difference between profitability and bankruptcy.

Derek's own story illustrates this perfectly. In 2008, he and his dad wanted to expand from 60 cows to 120. The banker showed up and told them they could have a brand new milking parlor if they went to 200. So they did. And then 200 became 240, which became 250, which came with hired labor, and more land rented at prices that aren't cheap, and insurance that's tripled in 15 years. That's the treadmill.

The Labor Problem Nobody Wants to Talk About

One of the most honest conversations in Episode 338 is about immigrant labor. It's a topic a lot of people dance around. Derek doesn't.

His dairy runs on two workers from Nicaragua. He said plainly that when they told him they planned to eventually go home once their house was paid off, he didn't have a plan B. He used to get workers knocking on the door weekly looking for jobs. College students from nearby UW-Platteville used to show up looking for summer work. That was a decade or two ago.

Now? Nothing. And it's not just his farm. It's an industry-wide reality. Dairy cows need to be milked 365 days a year, twice a day — there's no week off, no holiday, no flexibility. That kind of work requires reliable, dedicated labor, and that labor is increasingly hard to find and expensive to keep. Wages that were $8–10 an hour in 2008 are now $14–17. Which sounds like a good thing for workers, and it is. But for a farm already squeezed on the price side, every cost increase is another step toward the exit.

What's Left Behind

When a dairy farm closes, it's not just one business shutting down. It's a family that's been doing this for generations deciding there's no path forward. Derek's grandfather farmed in Iowa until he died in a tractor rollover in 1988. His parents then picked up and moved to Wisconsin, looked at 27 different farms before settling on the one Derek now runs. That's not a casual commitment to agriculture. That's a life.

The National Family Farm Coalition has documented what happens to rural communities when farms disappear — the ripple effects hit local businesses, schools, tax bases, and the social fabric of small towns in ways that take generations to recover from. In Wisconsin — America's Dairyland — nearly half of all dairy farms closed between 2003 and 2020. New York saw a 47% drop in the same period.

And yet the milk keeps flowing. Fewer farms, more milk, lower prices. It's a cycle that rewards scale and punishes the people who built the industry in the first place.

So What Happens Next?

Derek's honest answer when asked about the future was direct marketing, more efficiency, and staying open-minded. He's already experimenting — pastured beef, eggs, sheep, virtual fencing for rotational grazing. He's not waiting for someone to fix the system. He's building around it.

That's the Midwest way. You don't complain about the weather. You put your nose down and figure it out.

But there's a harder truth underneath all of it, one Derek was willing to say out loud: he gives himself five years before the milking parlor goes fully robotic. The robot salesman literally pulled into the driveway during the podcast recording. That's not coincidence — that's the industry knocking on the door.

Food should cost more. That's not a radical idea. It's just math. When the person producing your milk is debating whether to buy a cup of coffee, something is broken. And no amount of efficiency or automation fixes what's actually broken, which is that as a society, somewhere along the way, we decided that the people growing our food were the ones who could afford to take the hit.

Derek Orth's full conversation with Nick is available on Episode 338 of the Prairie Farm Podcast. It's worth your time.

If you're interested in what we do at Hoksey Native Seeds — helping landowners build healthier, more productive ground through native prairie — head to hokseynativeseeds.com. Conservation starts with the land under your feet.