White Revolution coming to dairying
ITHACA, N.Y. George Orwell
made many predictions for 1984,
but one profound change that he
did not anticipate was the White
Revolution - an unprecedented
transformation of the dairy in
dustry.
As in any revolution, though,
there are the victors and the
vanquished. The winners in this
case are expected to be consumers
and the dairy farmers who sur
vive.
The defeated will be some
hardworking dairy farmers who
will be squeezed out of business,
says Andrew Novakovic, assistant
professor of agricultural
economics at Cornell University.
Changing U.S. demographics,
new products, expanding dairy
markets, and modern on-farm
technology, particularly the ap
plication of biotechnology, are
expected to alter the somewhat
staid dairy industry into an in
novative and consumer-oriented
business.
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“Consumers, farmers, and
processors should be prepared for
the dramatic changes that are
bound to occur in the dairy in
dustry during the next several
years,” says Novakovic, a dairy
specialist in the New York State
College of Agriculture and Life
Sciences at Cornell.
Production and use of bovine
growth hormone (bgH) is one
example of the potential of the new
biotechnology. “Of all the factors
that will change the dairy sector,
bovine growth hormone by far is
expected to have the greatest
impact,” Novakovic predicts.
Work by Dale Bauman, a
nutritional biochemist at Cornell,
has shown that growth hormone
increases milk production in cows
15 to 40 percent. This hormone now
is being produced through the
application of genetic engineering
techniques. Even without the
commercial use of bGH, though,
the dairy sector is producing about
10 percent more milk than con
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Bovine growth hormone
sumers are using. The result:
costly government purchases of
surplus milk and cheese.
“Eventually, as the price cuts
and assessments imposed by the
federal government begin to take
their toll, more farmers will go out
of business, and supply and
demand should begin to look
"f>n«nnahlv wpII balanced by 1986.”
Novakovic says.
To balance the milk supply and
demand, consumers either must
significantly increase their con
sumption of dairy products, or
production must be reduced by
about 10 percent, Novakovic
calculates. If all the adjustment
comes from a cut in production,
the number of cows would be
reduced 10 to 15 percent.
Bovine growth hormone,
however, which could be on the
market within three to five years,
would necessitate a greater
reduction in cow numbers to
balance supply and demand,
perhaps an additional 20 percent.
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Currently, dairy farmers and
producers are confronted with an
aging population and an increase
in minorities; both groups drink
little milk. Furthermore,
Americans are eating out more
often which adversely affects milk
consumption.
Farm efficiency also is resulting
in yet more inexpensive milk. The
use of computers, continually
improving management
techniques, and prospects for other
innovations, such as on-farm
blanching and concentration, for
example, are resulting in highly
productive operations and in
creased marketing efficiency.
The use of growth hormone,
however, may result in tremen
dous increases in efficiency,
Bauman points out, perhaps
equivalent to gains typically made
over a 10 to 20 year period.
In response to the demographic
changes, the current dairy surplus,
increased farm efficiency, and
m
predicted increases in production,
the dairy industry is embarking on
an aggressive advertising cam
paign to highlight the nutritional
value of dairy products, and also is
developing new products and
expanding markets.
Novelty cheeses, flavored cheese
curds, more low-fat choices,
flavored and ultrapasteurized
milk, and blended products
comprised of both dairy and
nondairy components are some of
the new products being marketed.
To increase consumption, the
diary industry also will need to
cater more to new or under
exploited markets, such as the fast
food industry, a booming business.
“In the final analysis, the
biggest beneficiary of the White
Revolution will be the consumer
who will be buying mroe dairy
products at a lower price than
otherwise would have been
possible,” Novakovic concludes.
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