Georgia’s dairy industry has been a key area of development in the last few decades and embodies the issues facing Georgia’s broader agricultural sector. Large supply chains, technological advancements and market volatility all loom over the sector, forcing change upon traditional methods of farming.
Large Supply Chains
Over the past few decades, the dairy industry has become dominated by a small number of large supply chains. In 1990, Dean Foods, America’s largest milk producer, developed facilities in Georgia and since then has expanded, taking out smaller farms and consolidating the dairy industry in the state. This signaled the change coming in the agricultural sector which also began to favor large supply chain farms over smaller local farms; since 2007 more than 5,000 farms have closed in Georgia while the average size of farms has grown by 3% since 2012. The dairy industry currently is comprised of 124 farms with over 82,000 cows.
Companies like Dean Foods, possessing a majority of the market share, have produced lower quality goods at cheaper prices through poor agricultural practices which harm the environment more than local farms.1
When given worse feed and placed in lower-quality conditions, cattle were shown to produce more CH4 (methane) which is one of the most abundant and harmful greenhouse gases in the atmosphere.
Besides the environmental consequences of consolidating the dairy industry, it also has economic repercussions. During the COVID-19 pandemic, large dairy suppliers saw a decrease in demand from commercial consumers with many restaurants closing. As a result, though there was an upsurge in demand from individual consumers, farms had to dump out massive amounts of milk and other dairy products. Without smaller, sustainable farms, Georgia’s dairy industry has lost its quality and diversity of products and has increased its capacity for environmental and economic damage.
Labor and Price Fluctuation
In their 2020 Agricultural Forecast, the University of Georgia’s College of Agricultural and Environmental Sciences frequently mentioned the problem of price fluctuation as a prominent issue for most crops and produce. Trade negotiations and market downturns were stated to cause crops like peanuts, one of Georgia’s largest products, to stagnate in price. While some of these price issues are due to cyclical changes in market behavior, as seen with cattle prices dropping due to the end of its expansionary period, it is still vital to set up stable trade deals and loan programs to protect farms.
Additionally, labor deficits can lower production rates and cause a dip in the value of the agricultural market. Immigrants make up 25% of the farming industry workforce and with increasing deportation efforts, this population could be depleted from the industry. The 287(g) program is an example of such efforts, as it allows local municipalities to partner with Immigration and Customs Enforcement (ICE) and enforce laws regarding deportation. Short term labor shortages currently plague the dairy industry, due in part to 287(g), and the dairy industry is attempting to offset this loss with technological advancements.
While the increase in technological advancements has increased labor productivity, the job loss experienced by farmworkers has larger economic consequences, as seen with the consolidation of dairy production. Beyond economic repercussions, job losses put additional pressure on immigrant farmworkers, 75% of whom do not have health insurance. Without proper healthcare or job support, entire rural communities could perish due to changes in immigration policy and labor regulations. The dairy industry’s labor and price developments serve as warnings to the agricultural sector as a whole that job losses and price falls can come about quickly.
Policies and Areas for Growth
Going forward, it is important to recognize the need for regulation, both in terms of market shares for companies and labor and price fluctuations. Innovations within agriculture, such as Perfect Day’s completely artificial milk could easily disrupt the traditional market setting by offering more sustainable products. To counteract these market imbalances antitrust laws need to be put in place to prevent the monopolization of agricultural industries. The Food and Agribusiness Merger Moratorium and Antitrust Review Act, proposed by Mark Pocan a House of Representatives Member from Wisconsin is an excellent example of policies Georgia should replicate; by preventing food and agricultural companies from acquiring land or farms, the bill prevents the consolidation of agricultural production.
Additionally, labor rights need to be protected for immigrant farmworkers. Community to Community, an immigrant rights advocacy group, is currently running a Dignity Campaign to repeal policies like 287(g) which unjustly and disproportionately affect poor, immigrant workers. Promoting such groups and removing such policies is vital to the protection of workers’ rights and the stability of agricultural jobs.
Loan Programs also need to be put in place for all agricultural industries to prevent price dips from wiping out smaller farms and businesses. The Agricultural Act of 2018 is an important bill to reference as it allows for cotton producers to tap into marketing loans when cotton prices fall.
Expanding a policy like this to other industries would help sustain their growth through technological advancements and trade complications. By protecting local farms and creating sustainable programs for development, Georgia can continue to boost its agricultural sector and remain a powerhouse in the field.