Looking to the future, many dairy producers across the Northeast – especially in New York and Pennsylvania – are capitalizing on positive margins.
“A lot of producers in our area of New York are positioning for growth, whether that be herd size, expansion or diversification,” says Tyler Reynolds of Reyncrest Farm, Corfu, New York. “It seems like many successful farms are in a good position to make investments into their businesses this year.”
While improved margins in 2024 helped dairy producers become better situated financially, rising input costs, including labor, interest and energy, continue to challenge many dairy operations.
“Financially, things are still tight for many producers, causing people to be cautious,” says Rebecca Ferry of Dreamroad Jerseys LLC, Johnstown, New York. “There are some opportunities for producers to expand with new processing coming online this year, but people are cautious with the current state of politics in the U.S.”
Jayne Sebright, executive director at the Center for Dairy Excellence in Pennsylvania, says they have seen more farm families focusing on the controllables like improving their milk production and components per cow, finding ways to diversify their operations and making those low-cost improvements to their operation.
“Increasing milk production per cow and components is still the greatest opportunity for our producers to maximize their profitability,” Sebright says. “However, we have seen more and more farms starting to focus on those little things that make a big difference in making up that gap. We also see value-added as an opportunity for those dairies who are well positioned to take advantage of that proximity to market and who have the expertise and skillset to lean into that area of the business. However, value-added isn’t an opportunity for everyone. That’s why it’s important to focus on the fundamentals, like increasing components and milk production per cow.”
Two areas of optimism noted by Ferry and Sebright are consumers’ desire to know where their food comes from and growing interest in succession planning, respectively.
“Consumers want to know where their food comes from, and that’s exciting,” Ferry says. “There are a lot of opportunities for the dairy community to connect with consumers and teach them about what we do. People are listening and we need to share our story and rebuke the false narratives.”
With many multigenerational farms in Pennsylvania, more producers are asking for help with succession planning as they look to the future.
“The idea of bringing in a next generation and building stronger, more sustainable farms for the long term is exciting, and it creates a lot of optimism about the future of our dairy industry here,” Sebright says.
Bird flu
In New York, bird flu or highly pathogenic avian influenza (HPAI) H5N1 is on the radar for dairy producers, and they are working to be proactive.
“We are keeping an eye on it, and we try to employ strict biosecurity measures when we have visitors, but we haven’t had any positive cases near us so far,” Tyler Reynolds says.
Similarly, Ferry has not had any cases nearby but says producers are “cautious and trying to prepare and learn from other states that have gone through it.”
Pennsylvania has also taken a proactive approach to mitigating the virus, especially as a recent outbreak of the virus in wild geese has brought heightened awareness to the issue.
“Dairy farms in Pennsylvania have to be prepared to be in quarantine areas and to have their biosecurity plans in order,” Sebright says. “A mandatory tanker truck sampling program was also implemented in November. As of early January, the department estimates that almost all dairies have been tested for HPAI through the tanker truck sampling program. Knowing that all herds now are being tested has prompted more dairies to get their biosecurity plans in place and to tighten up biosecurity measures on their farms.”
Dairy processing
New dairy processing facilities in New York and West Virginia are bringing excitement to producers in the region, especially those looking to expand.
“In our area, milk processing capacity is increasing, and that’s very exciting to see as an operation that would like to grow,” says Kelly Reynolds, also from Reyncrest Farm. “There are new plants opening, and older plants in our area are taking steps to modernize their facilities. We are very excited for these opportunities.”
Although there are not any new commercial dairy processing facilities in Pennsylvania, Sebright says there are some new artisan or small-scale processing facilities opening.
“The most significant investment here in the last year was Maryland & Virginia Milk Cooperative’s purchase of the Philadelphia ESL milk plant,” Sebright says. “That has brought new investment and branding to that facility and expanded a market for Pennsylvania milk. The investment in facilities in New York and West Virginia is also creating opportunities for Pennsylvania milk. However, many dairy farmers in this state would like to see more processing investment within our commonwealth as they look to grow their operations and look for expanded market opportunities."
Policy
Like many dairy producers across the country, those in the Northeast are closely watching which position the new administration will take on key issues affecting the dairy industry.
“The current volatility that comes with any new administration and the general uncertainty of a few key areas, such as labor and trade, are a few primary concerns right now,” Kelly Reynolds says.
Ferry adds, “The new farm bill is a great concern, as is immigration reform and the fluctuations in the government employment situations and tariffs."
Sebright noted that they are watching how the new Federal Milk Marketing Order (FMMO) changes will affect local dairies as the new rule takes effect later this year.
On the state level, Pennsylvania continues to evaluate the Pennsylvania Milk Board and how policies could change how milk premiums in the state benefit farms.
“Permitting laws also continue to affect our farms, with Pennsylvania’s permitting laws sometimes hindering the ability of our farms to expand as quickly as in other neighboring states,” Sebright says.
