Growth and consolidation in Alabama's dairy industry

Alabama's dairy industry has been consolidating. The pattern of increasing output among remaining dairies is slowing. The industry may be approaching a critical juncture which will determine its continuing viability. This study investigates evidence of economies of size, management stress among mid-sized dairies, and the simultaneous existence of multiple production technologies in an effort to explain influences contributing to the trends of the recent past and anticipate the future course of the industry.;Two sources of data on Alabama dairies are used. Alabama Dairy Herd Improvement Association data provides a broad based data set, used to analyze overall industry trends. Data from the Alabama Farm Analysis Association provides a smaller data set with extensive detail on farm level operation and performance.;The study concludes that economies of size have been influential in stimulating growth in the past, but are unlikely to be a factor in future management and investment decisions for dairies with average or greater levels of production. There is little evidence of management stress in Alabama dairies in the 100-200 cow size. There is strong evidence that multiple technologies are being used in milk production. The evidence also suggests that the operators of dairies of all sizes are successfully refining disparate production technologies, making them more efficient and competitive.