Charles Geisler Associate Professor Rural Sociology Cornell University

Tom Lyson Associate Professor Rural Sociology Cornell University

October 17, 1989

For presentation at the Conference on "Advanced Technologies Facing the Dairy Industry: bST" in Rochester, N.Y., November 10 & II, 1989. Organized bJ Cooperative Extension and the DaiJ.1' Management Division of the Department of Animal Science, Cornell University. The authors are grateful to the Department of Agricuftural Economics at Cornell Universtiy for use of the New York State dairy data used in this paper.

Is There More Than One Way to Milk a Cow? Social and Economic Consequences of Restructuring

New York's Dairy Industry

I. INTRODUCTION

Dairy farming in the United states is currently undergoing a tremendous structural transformation. The number of dairy farms in the U.S. has declined by over 90 percent since 1950 and cow numbers have dropped by 50 percent in the same period (Fallert et al., 1987). Hard as it is to believe, average cows per farm in 1955 was eight and just under three million dairy farms produced for the nation. This compares starkly with the Office of Technology Assessments (1985) scenario of possibly 2,000 very large dairy farms producing America's dairy products with herds of 1,500 supercows each. As farm numbers declined, production per cow rose dramatically and average herd size also grew. Today, production per cow stands at over 14,000 Ibs/year, is increasing at a rate of over 200 Ibs/year, and average herd size stands at over 60 cows.

The present paper is concerned with the social and economic implications of a system of large-scale dairy units. Our paper focuses on the sustainability of the dairy system as a whole if bST or other biotechnologies result in the concentration of production that OTA (1986) and others (Yonkers, et al., 1987; Knoblauch, 1988) predict will occur. We depart from the patterns established by most other social impact assessments concerned with the repercussions of bST adoption on family farms, animal health, land grant university clientele, and other such matters. These issues have been addressed elsewhere (see Browne and Hamm, 1988; Comstock, 1989; Epstein, 1989; Buttel, 1986; DuPuis and Geisler, 1988; Molnar and Nowak, 1989). Instead, we assess the vulnerabilities of organizing New York State's dairy system primarily as "one size fits all" industrial-type production units and demonstrate that this strategy is suboptimal from several standpoints.

Underlying our inquiry into the social and economic effects of large-scale dairying in New York is a desire to assess the costs to society of moving from a technologically diversified, geographically dispersed, and relatively small­scale system of milk production to a geographically concentrated and technologically uniform system of large­scale production units. We doubt, for reasons that will become obvious, that conversion to the new growth-hormone technology by producers of the nation's milk can avoid technological monoculturalism and its consequences. We

2

identify an initial list of these consequences, contrast them with what we believe the consequences of continued or expanded smaller-sized dairying would be, and examine research bearing on this topic from both a county and state­based survey of dairy operators in New York state.

II. A CONCEPTUAL FRAMEWORK

In The Second Industrial Divide, economists Michael Piore and Charles Sabel present a framework for examining changes in industrial production in the late 20th century. These authors compare and contrast two modes of industrial organization: mass production and craft production. Underlying the mass production model is the assumption that large-scale, regionally concentrated and technologically specialized forms of economic organization are more efficient and profitable than small-scale, geographically dispersed and less specialized units. Most of American industry is organized along mass production lines, giving it a certain sense--erroneous we believe--of inevitability across all sectors.

In recent years, however, the efficiency and competitive advantage of large-scale mass production has been called into question. Because of the diversity of consumer tastes, the rapid pace of technological change, changing cost and price structures, resource shortages and market segmentation, heavy investments in limited purpose capital equipment, and management styles are becoming suspect. The mass production, economically concentrated model of economic organizations not only undermines profitability and competitiveness in many industries, it leads to a functional rigidity in the production process itself. The U.s. auto industry is a classic example. During the oil crises of the 1970s, Detroit was unable to rapidly shift production from full-size sedans to fuel­efficient compact and subcompact models. Even when U.s. producers began delivering small cars to the American consumer, sales lagged because the quality was suspect.

An alternative way to organize economic production is to nest it in relatively small-scale, flexibly-specialized, craft-based units. Piore and Sabel acknowledge the relevance of their model to both agricultural and nonagricultural sectors. Enterprises organized along these lines are able to respond quickly to changing technologies and economic environments. Almost by definition, craft­based, flexibly-specialized units are geographically dispersed and technologically and organizationally diverse.

Historically, production agriculture has typified the craft-based, small-scale form of economic organization and near perfect market competition (Kindel and Saunders, 1982).

3

However, in recent years the mass production, corporatist mode of organization and production has made in-roads in the areas of poultry, fruits and vegetables, and most recently hog production. Most of the fruits and vegetables grown in California, Florida, and Texas corne from larger-than-family farms that are often run by corporations. These production units are often vertically integrated with processors and distributors (Wallace, 1987). In the 1982 Census of Agriculture, for example, 2,898 farms accounted for 69.1 percent of all vegetable sales in this country. We suspect that the 1987 Census of Agriculture will show that an even smaller number of farms is accounting for an even larger share of sales.

Poultry production, which was once geographically and organizationally dispersed, is now controlled by just four large processors (Knutson et al., 1983). Many states that once had considerable amounts of poultry production now have none. Today, fewer than 4,000 large poultry producers account for most of the poultry sales in this country.

Even the dairy industry seems poised to shift from a craft-based, flexibly-specialized system of economic organization to a large-scale, mass production model. Already we see the growth of extremely large dry lot operations in California and Arizona. And while one could quibble that a 5,000 cow herd is still a "family farm" since one family owns and manages all of the resources, the mode of social organization, the division of labor, and the linkages to input suppliers and to the market all suggest a mass production, corporate-based model. Specialization and farm growth occur simultaneously (OTA, 1986); bST adoption and use, as presently conceived, will be no exception.

Table 1 summarizes some of the identifying characteristics of craft-based, flexibly-specialized economic units and mass produced, corporatist units. Interestingly, although the mass production mode of dairying is most prevalent in the Sunbelt area, this region of the country still contains high percentages of small-scale, craft-type production. Figure 1 shows that, on a percentage basis, many Sunbelt states had up to 90 percent of their dairy farms in craft production units whereas states like Minnesota, Wisconsin, Michigan, New York, Pennsylvania, and Vermont did not. This simply means that craft and corporate dairy farms currently coexist, a point of policy relevance to which we return at the end of the analysis.

The future structural configuration of the dairy industry with reference to the two categories outlined in Table 1 and in the wake of bST commercialization is in reality hard to predict. Perhaps, in light of recent public reaction to bST introduction into the national dairy supply by farm cooperatives, supermarket chains and consumer

Table 1: Characteristics of Craft Based and Mass Production Enterprises compared

Craft Production

Diverse Concern with quality Labor intensive Small scale Entrepreneurial Innovative and flexible Local market oriented customized production Resource conserving Extensive production systems Local control Skilled labor Competitive Technologically fluid

and robust

c:grns5/table-l/November'89

Mass Production

Homogeneous Concern with price capital intensive Large scale Managerial Traditional and rigid Mass market oriented Standardized production Resource exploiting Intensive production systems External control

u~~5killed labor Oligopolistic Technologically fragile

and brittle

Figure 1: Concentrations of Small Berd Dairy "Farms by state, from 1982 Agricultural Census "

Percent of Farms With 30 or Fewer Cows

Legen~

71 . 4 t c 9u . 3

63 . 4 t (; 7 1 . 4

~~~~ 46 . 1 to f:3 . 4 2~ •. 9 to -16 . 1

4

groups, dairy producers who might have adopted the technology will see advantages in producing "bST free milk," regardless of size of operation. This might initiate further diversification in the industry rather than less. For purposes of the present analysis, however, we assume that the dynamics of the classical technological treadmill (Cochrane, 1979) will immediately or eventually take hold and that bST will contribute substantially to the contraction in operator numbers predicted by Yonkers et al. (1987) .

III. SYSTEM CHANGE AND VULNERABILITY

Thus far, we have distinguished between two different but coexisting modes of economic and social organization in the dairy industry and suggested that this coexistence is put at risk by the introduction of bST. If anything, the technological treadmill will accelerate as bST and subsequent biotechnologies offer the opportunity to increase milk output abruptly rather than gradually (Kalter, 1985). We have further suggested that the accelerated shift away from the heterogeneous craft mode imparts system-level vulnerabilities which heretofore have escaped attention in the relevant social impact assessment literature. These assume several forms and are discussed below.

a. Normal Accidents

In 1984 Charles Perrow wrote what was to become a landmark book on the safety of large-scale, highly technical production systems. In Normal Accidents Perrow argues that as technological systems grow large and complex, error inducing properties emerge. One such property is interactive complexity wherein failures interact. The other is tight coupling--i.e., the lack of temporal or spatial margins of error in which systems can recover from failure. Ironically, the sophisticated technologies of such systems can make matters worse by creating the illusion that the system cannot fail, except for operator error. Perrow's main point is operator skill or management ability makes no difference in preventing normal accidents.

Both the catastrophes at Three Mile Island and Chernobyl illustrate Perrow's point, as does the Exxon Valdez oil spill. Nuclear power plants are suppose to be among the "safest" ~nd most monitored systems, yet we have witnessed major system failures. Had the oil aboard the Exxon Valdez been transported in, say, ten smaller carriers, the grounding of anyone of them would have been more easily rectified. The financial system is not immune to such normal accidents. One recalls uncomfortably that that Black Monday in 1987 was system-induced; the "program trading" computer software used by brokers compounded large block

5

selling and the subsequent market crash (Sloan and Stern, 1988). In the natural world, the draining of prairie potholes and wetlands used by migrating waterfowl in the Northern Plains of the United States has concentrated bird populations and hastened avian malaria among them.

The food system in general and production agriculture in particular are subject to the same types of normal accidents. Several examples serve to illustrate this point. Especially instructive is the PBB contamination of the milk supply in Michigan in 1973. Fire retardant was inadvertently mixed with cattle feed supplies delivered to an unknown number of dairy farms throughout the state. It took nine months before this catastrophe surfaced. By then, nearly nine million people in the state had eaten contaminated meat and dairy products. Michigan farmers were then forced to destroy 30,000 head of cattle (Eggington, 1980). Only with reluctance does one contemplate the animal losses that would have occurred had this normal accident happened in California, Arizona, or Florida where many herds range between 500 or 1,000 cows each. There would clearly be no further need for the Federal Dairy Termination Program.

There are other examples in the literature of what can happen when disease spreads through large dairy herds. In the Journal of the American Veterinary Medicine Association, Godger and Skirrow (1986) describe how a epizooic of trichomoniasis in a large California herd resulted in an economic loss of over $66,000. "In high density mass-bred herds," they observe, "conditions and/or management practices may be conducive for trichomoniasis transmission .... " They note that there is no effective treatment approved for this disease and conclude that trichomoniasis may become a serious problem on large California dairies. They calculate that the average dairy in Tulare County could lose over $24,000 if an outbreak occurs. Other studies by Turmond et ale (1987) and Gonzales et ale (1988) illustrate the fragility and susceptibility of abnormal/normal health accidents.

b. Loss of Diversity and Innovative Capacity

The craft-mode of industrial organization benefits from spontaneous, simultaneous innovation from multiple centers and from diverse, in-situ field trials in the hands of ultimate adopters. Gradual homogenization reduces these benefits, and tends to replace low-input systems with more costly, high-input ones with comparatively little input from ultimate users. Low-input systems shift the point of value added in food production from laboratories and factories of input suppliers to farms in rural communities (Hassebrook and Hegyes, 1989:18). In these latter locations, innovations which fail are localized. Innovator rents (the

6

profits realized by early adapters) are small, widely shared and seldom lead to dramatic restructuring of the industry.

The large-scale, mass production model contrasts sharply with the heterogeneous dairy production strategy one still observes throughout the lake states. From Minnesota to New York, there are almost as many ways to milk cows as there are dairy farms. It is indeed hard to determine what a "typical" dairy operator is in terms of technologies and management styles even when the total population is regrouped according to size (Table 2). In almost no technology observed by the authorf was there a linear relationship across size categories. Technologies which are reputed to be size neutral (e.g., artificial insemination) are widely employed by a majority of operators. Techniques known to positively influence yields (e.g., DHIA) are not relied upon as heavily by smaller producers as by large producers--a phenomenon observed in Wisconsin as well (Marion et al., 1988). Finally, some technologies adopted by only the largest operators (e.g., Harvestore Silos) are not necessarily indicative of good financial management. 2

An important inference from Table 2 is that, contrary to what information promoting most technologies states, the technologies and management methodologies which accompany them for larger farming operation are not necessarily superior, just different. As every dairy extension agent knows, some of the best managers in any given county have relatively small herd sizes, and certain of the large herd owners are poor managers. Figure 2 gives aggregate data supporting this claim and shows maximum average herd production for 60-79 animal herds rather than for the largest. Mastitis occurrence, shown at the bottom of Table 2 and by some accounts an indicator of poor management, is size-neutral across categories.

other data from the Dairy competitiveness Project in western New York show that while larger herds generate higher gross sales, net income from large and small herds is comparable. For the state as a whole, net income does rise with herd size (Figure 3). Note, however, that for smaller herd sizes the ratio of gross-to- net income is far lower than that for herds which climb above 120 cows. Farmers

lData for the Dairy competitiveness Project consist of 103 interviews of dairy farmers in two communities in Western New York (Kennedy and Delevan) between 1988 and 1989.

2Early adoption is not always wise adoption as attested to by the sugar beet fiasco in New York (Colman and Stockdale, 1976) and late adoption is not always "laggard" (unwise) behavior as the history of artificial insemination shows.

Table 2: Dairy Management by Herd sice, 1989*

Herd Size Management Technique <40 40-59 60-79 80-99 >100

% using

Bunker storage 17 17 33 50 42

Stanchions 96 93 93 36 33

Transfer stations 22 29 23 8 9

Pipeline 14 61 69 33 27

Ration balancing 39 66 67 86 75

Artificial insem. 70 72 87 86 92

DHIA 13 41 60 50 67

Tiling 39 52 60 71 67

Harvestore silo 7 13 7 42

Computer feeding 14 8

Mastitis frequency 31 28 26 21 25

*Data are from 93 farmers interviewed in 1988-89 as part of the Dairy Competitivness Project in western New York.

{;:.

c:gms5/table-2/November'89

Fiqure 2: Herd size and Herd Average for 1989 (1bs), cattaraugus County

AVE. LBS (OOOYYR

22.1

16.5-

9.5- .. I11III._ ...... __ ...... __ ...... ___ ... __ ... <40 40-59 60-79 80-99 >100

SIZE CATEGORIES

Fiqure 3: Gross and Net Farm Income By Herd.Size for New York Dairy Parms, 1986

$ (000)

400

350

300-

250

200

150

100

50-

<40 40-59

$395,683

UJ ~

W 0 ~ Co) 0 Z Co) en z en tu 0 a:: z (!)

60-79 80-119 >120

HERD SIZE

7

managing herds of latter size or larger must produce four hundred thousand dollars of gross receipts to increase net receipts from the twenty one thousand dollar net receipts averaged by farmers in the middle category. Thus, debt and risk climb dramatically for herds of 120 or more cows. Statewide, 22 percent had debt of a quarter of a million dollars ~nd another 22 percent had a debt of a half million dollars.

The advent of advanced dairy technologies will probably, for reasons noted earlier, greatly narrow the diversity among New York dairy farmers. While there are diverse ways to milk cows in New York today, many of these ways are applicable on large or small herd-size farms, but not both. For example, it is virtually impossible to milk into buckets once herd size reaches 60-70 cows. Likewise, a milking parlor is only economically efficient on larger farms. Every dairy farmer runs his or her operation according to a logic that is constrained in numerous ways by herd size. If only the operators of large herds remain profitable after bST is introduced, then the flexibly­specialized dairying strategies used on small farms will give way to inflexible technological monocultures. Reflecting on such monocultures, Brooks (1986:339) comments:

... there may be an inherent value in the maintenance of technological diversity that is analogous to the value of the maintenance of genetic diversity in natural and man-made ecosystems. The existence of and the considerable depth of knowledge about many alternative technological options is a potential source of systemic self-renewal and adjustment to new circumstances. Such technological diversity has a social value which is not captured by the usual consideration of efficiency, market share, or organizational growth, which tend to drive the evolution of technological systems in industrial societies. An overall system that is less efficient or more costly because it requires the infrastructure for a diversity of technologies may nevertheless have greater viability or survival potential in an environment subject to shocks, surprises, or discontinuities in long-term trends.

3state data was jointly produced by the Department of Agricultural Economics of Cornell University and the New York Agricultural Statistics Service in 1987 (111987 Farm Management and Energy Survey"). It sampled farmers throughout the state, of which approximately 10,050 were dairy farmers.

8

c. Disappearance of Family Dairying

Unlike many other types of farms, the size of a family dairy farm is constrained by the number of animals one person can handle. Iowa corn farmers, Montana wheat producers and Georgia soybean farmers can expand their operations by buying new labor extending equipment (OTA, 1986). Larger tractors, more powerful combines, and the like, allow one person to work ever larger amounts of land. However, dairies are different. They are constrained, more than virtually all other enterprises, by labor. Without hired labor or an extended family (i.e., sons or daughters who work on the farm), the maximum number of cows one person can handle is probably less than 80--even with the most sophisticated equipment. The time constraints involved with handling more than 80 cows would overwhelm even the best manager.

If we assume that the smallest post-bST diffusion economically viable dairy in New York will be larger than 80 cows (Yonkers et al., 1987), and most likely closer to 200 cows, then we are saying that family dairy farming is finished as we now know it. Even the daily costs of administering bST, considered by some (e.g., Fallert et al., 1987) to require little additional capital, is considerable for the owner of a 200-cow herd (Table 3). At 75 cents/day it wil! cost a 200-cow dairy $40,000 just for the bST alone. Research by Kronfeld (1989) further suggests that profitability for bST treated cows may vary considerably from industry estimates due to extra costs associated with disease control and reproductive management.

Even more basic is additional labor costs when a 60 or 80-cow herd is exceeded. Under the mass production, corporatist mode of industrial operation, labor will become the key determinant in the future sustainability and profitability of New York dairies. Adequate supplies of skilled labor to supplement the family labor will be necessary as revealed in both the cattaraugus and New York state data (Table 4). Family-size operations today (i.e., those with 60 or fewer cows) will be forced to expand their herd size if they wish to remain economically viable and to hire labor to milk and manage the cows. It of course remains to be seen, with skilled labor in short supply and what labor is available seeking full-time employment and fringe benefits, whether farm operators considered "good managers" of animals will be good managers of labor. The

4 In the event that animals are genetically altered to produced higher growth hormone levels themselves, these treatment costs would vanish but the animals would probably be patented and thus more expensive (Hassebrook and Hegyes, 1989).

Table 3: Operator Cost of Using bST for Different Herd Sizes at Different Unit Cost Estimates for a 266-Day Lactation Cycle

Unit CostjDa}:

Herd Size $.25 $.50 $.75

100 Cows 6,650 13,300 19,950

200 Cows 13,300 26,600 39,900

500 Cows 33,250 66,500 99,750

1000 Cows 66,500 137,000 199,500

c :cgms5 \ table-3\N ovember'89 \

Table 4: Employment Patterns of Dairy Farms Size for New York State New York (1989)

Labor Characteristic

Number of Part-Time Employees

a. New York State

b: Western New York

Number of Temporary Employees

a. New York State

b. Western New York

Number of Year Round Employees

a. New York State

b. Western New York

c :gms5 /table- 4/November'89

<40

26

17

24

30

23

4

40-59

27

21

32

48

33

24

(1986) and

He-rd Size

60-79

(Means)

49

20

28

27

55

20

by Herd western

80-99 >100

43 62

64 67

26 20

7 25

69 87

71 83

9

future of family dairy farming, large or small, in the wake of bST probably pivots on this issue.

Beyond labor impacts and new capital requirements related to the consolidation of production into fewer units is a land barrier to future entrants to dairying (OTA, 1986). The "opportunity" to be a dairy farmer will be reduced due to fewer dairy farms of considerable size. On average, dairy farms occupy more land than any other farm type in New York State. There is every indication that dairy farms associated with bST adoption will be on high quality land (Knoblauch, 1988), further adding to cost. Entry into dairy farming is likely to be restricted to those individuals who corne from dairy farm backgrounds and have the opportunity to inherit the farm or to wealthy interests. As dairy farms become larger and rely increasingly on expensive technologies, the cost of entering dairy farming is sure to rise in the years ahead. 5

Attrition among family dairies--the cornerstone of craft-based d'ary production--is very apt to mean a loss in social and ec'on omic vitality in agricultural communities as well (Goldschmidt, 1978; MacCannell, 1983; Swanson, 1980). Based on recent research by Carlin and Green (1989), in which 750 small farm counties were compared to an equal number of large farm counties, the former generally have more diverse and vigorous economies. There is thus much to support the claim that the coattails of a craft-based dairy system are long indeed, both socially and economically.

d. Loss of Local Control

Closely related to the loss of family dairying and the related social infrastructure at the community and county levels, is the loss of local control. Under current dairying conditions, most New York dairy farmers are tightly

. tied to their local communities. They purchase their inputs from local feed and equipment dealers, they sell their milk to local processors, they obtain credit locally, and they participate in the local farm organizations. A significant increase in scale will lead to the dissolution of many of these ties. Local credit, information, and markets will give way to more vertically integrated systems. commenting on one aspect of such integration, the Office of Technology Assessment (1986:25) states that contract integration with corporations, and sometimes cooperatives, radically changes the role of the traditional independent farmer. More often than not, "the farmer loses control of, if not legal title

5See Tauer (1987) for discussion of the lack of real difference between cost-reducing and yield-increasing technologies.

10

to, the commodities grown under a production-integrated arrangement."

vertical integration aside, as dairy farms get larger, processors and distributors will also become larger. Local fluid and manufacturing plants will go out of business, consolidate, or become part of larger national or regional agribusiness firms. Only niche markets will be left for the small-scale producer and the small-scale processor, a diminished vestige of a once-strong craft industry. Like poultry and other commodities, milk and other dairy products will become "commercialized" and relinquish quality control to the "packaging" of large concerns like Carnation or Kraft. A production system adapted to myriad forces and benefitting a wide array of local owner-producers will be supplanted by a system designed almost exclusively for "economic efficiency" (Sagoff, 1989).

Two other sources of eroding local control associated with major concentration in the dairy industry are land concentration and farm debt. The former leaves one or a few landowners where multiple operators owned or partially owned farmland. Fewer residents of rural New York will thus have a legal basis to make key land use decisions about road and facility sitings, industrial parks or waste disposal locations, urban sprawl and agland conversion, soil conservation, or wildlands protection. Those remaining on the land invested with such powers will increasingly speak and act for nonlocal interests.

The debt situation summarized earlier promises to attenuate local control over a majority of farm assets. According to New York's Agricultural statistical Service, one-quarter of New York dairy farms have been in financial stress in recent years, using the debt-to-assets criterion of 40 percent (Figure 3). In fact, dairying tends to lead all other forms of farming in the state in high leveraging, meaning that lende~s have an enormous say in the production of this commodity. As noted in the earlier section on the loss of diversity, this debt is concentrated among the largest dairy operators, suggesting that more rather than less local control will be sacrificed as dairy concentration ensues.

e. Regional Concentrations of Dairy Farms

Regional impacts of bST-induced concentration of dairy farming are of several kinds. Research performed by the Office of Technology Assessment (1986) and by Boehlje and Cole (1985) suggests that regional shifts are likely away

6state data for 1984 through 1987 show little variation in this proportion of dairy farm in financial stress.

Figure 4:

o (No debt) Any Debt

Below 19.9 20.0-39.9 40.0-69 . 9 70.0 plus

Percent

30

25

20

15

10

5

o Doiry Forms

New York Farmers Debt/Asset Ratio as of January 1, 1985 By Farm Type

30.7. 69.S

25.7 17.9 18.6 7.6

59.1 40.9

21.2 9.9 6.4 3.4

48.7 51.3

18.0 17. I 9.4 6.8

51.7 48.3

16.1 15.0 11.5 5.7

41.2 58.8

2B." 10.9 I1.B 7.5

49.6 50.11

20.9 15.6 10.4 3.5

PERCENT OF FARMS IN)ER FlNANCIAL STRESS BY TYPE OF FARM

Extreme Problems -Debt/Asset Rotio= 70,%

---Serious Problems -

Debt/Asset Rotio=40-70%

---

Other livestock

Cosh Groin

Tree Fruits

Grope Farms

Vegetoble Forms

52.0 48.0

27.0 14.3 5.5 1.2

All Forms

41.6 58.4

24.2 15.5 13.0 5.7

11

from traditional centers of dairy production~ This will occur between as well as within states and will be accompanied by shifts in dairy-related industries and in the location of manure concentrations associated with dairying. Here, we focus on such shifts within New York state.

While some areas of the state have more dairy farms than others, one can still safely say that dairying is a dispersed agricultural enterprise in New York. This dispersed pattern of dairying will change if farms are forced to become larger to capture the economies of bST and other advanced dairy technologies. Larger than family-sized dairy farms are only viable in certain regions of the state where soils and climate combine to produce high quality forage required by high production cows. The prime dairy belt for large-scale dairy operations seems to be the Northern Tier of counties running under Lake ontario. other areas where dairy farming still manifests a strong presence, notably the western Southern Tier and the North Country, lack the requisite natural conditions for large-scale production. One could argue that the concentration of dairy farming in the Northern Tier will displace more valuable commodities and that New York's agricultural interests might be better served by matching land quality to commodity.

To date, there has been little formal research on the influence of monocultural dairy production on waste streams generated by the relatively concentrated, high performance animals. Indeed, no adjustment has yet been made by the Soil Conservation Service in its standard formula for manure production (7-8 percent of body weight) for either genetic improvement or bST introduction. yet it seems intuitive that where there is more feed intake there must be more fecal output and that two cows weighing the same amount but producing 13,000 cwt and 26,000 cwt, respectively, require rather different manure management strategies.

The spatial concentration of dairy herds as is increasingly likely under the mass production mode is of both social and environmental concern. One approach to approximating the waste generating potential of such herds is to compare dry and wet cow manure generation on high forage versus low forage (i.e., high concentrate) diets. Using work by and Colucci et al. (1982), we were able to compare both categories of cows under the forage treatments stated (Table 5). During lactation, manure output increases nearly 300 percent and the ratio of feces to dry matter intake exceeds that of dry cows. The lesson seems clear; if natural hormone increase rather than body weight is the referent, waste production assumes important economic, social, and environmental overtones.

Thus, despite superior energy partitioning in bST cattle and related (at least at first) feed efficiency

Table 5: Dry Matter Intake, Feces and Feces/Intake for Dry and Lactating Dairy Cows

cow Type

High forage

Low forage

High forage

Low forage

c:gms5/table- 5/Novem ber'89

Dry Matter Intake (kg/day)

9.28

7.39

19.45

23.72

Feces (kg/day)

2.91

1. 86

6.73

7.50

Feces/Intake

.31

.25

.35

.32

12

(Bauman et al., 1985; Meltzer, 1987), there is increased net intake of feed by the animal to produce more milk. The resulting increase in wastestream output must be put in the context of land available for manure spreading, or the animal/land ratio. High densities of animals-to-land characterize many smaller family dairy operations and make them seem like the foremost offender in increasing surface or groundwater nitrate contamination compared to larger farms (e.g., Diebel et al., 1989). There is a likelihood that~~ _ b~T d~iry farms of the future (recall our growth / assumption stated at the outset), however, cow densities could ~ncrease and even surpass those of smaller dairy farms.

f. Politicizing of Milk

As dairy production becomes increasingly concentrated, both organizationally and regionally, there is greater potential for political disruption of the milk supply and demand. We have already alluded to the most obvious political change in local control following from the loss of broadly distributed landownership (OTA, 1986:28). Perhaps less obvious are the new labor politics potentially ahead. As with other commodities in which independent producers have been replaced by wage labor forces, dairy farm workers may organize themselves into unions and at times exploit the perishability of milk products through strikes and disruptions. Further, the commercialization of dairy products and the incursion of large multinational firms into dairying subjects the dairy industry to the risks of foreign boycotts. Both of these scenarios have analogs in the fruit and vegetable production of California and other states. The boycotts and strikes organized by the united Farmworkers illustrate what can happen to agricultural production that is both large-scale and vertically integrated.

At a more macro level, foreign trade may be jeopardized as worldwide concern focuses (for sUbstantive or political reasons) on the health and safety of agricultural products. The EEC has banned American beef that is treated with hormones and other countries may do the same with other commodities. While bST produced milk may prove safe from a human · health standpoint, the "image" of the product is of course a political matter of considerable importance. Given the balance of payments deficit facing the united states at this time, anything that limits America's ability to export its products--whether politically motivated or not--should be accorded serious attention as a system impact.

7Another public health side-effect of excess manure generation and related wastewater storage is insect (especially mosquito) spread (Pfuntner, 1986).

J

Table 6: Political Profiles of New York state counties Ranked by Dairy Dependency within Farm Sector*

1989 1988 Majority Vulnerable

President (1000 of county to Leader-county Election votes) Leg. (tD/fR) ship **

A. LOW Albany Erie Greene

DEPENDENCY D D R

Monroe D Niagara D Onondaga R Ontario R Orleans R Rensselaer R Saratoga R Schenectady D Schuyler R Seneca R Sullivan R Ulster R Wayne R Yates R

(N = 17): (84/56)

(233/125) (10/7)

(151/145) (42/39 ) (97/92) (20/17)

(8/5) (32/32) ( 40/30) (35/30)

(4/2) (6/6)

( 14/11) (37/29) (19/12)

(5/3 )

B. MEDIUM DEPENDENCY (N = 16): Allegany Broome Cayuga Chautauqua chemung Columbia Dutchess Essex Fulton Genesee Livingston Orange Oswego Schoharie Tioga Tompkins

R D R R R R R R R R R R R R R D

C. HIGH DEPENDENCY cattaraugus R Chenango R Clinton R Cortland R Delaware R Franklin R Herkimer R Jefferson R Lewis R Madison R Montgomery D Oneida R Otsego R Steuben R Washington R Wyoming R

(11/5) (47/45) (15/14) (29/25)

(11/7) (13/11) (56/38)

( 9/6) (11/8 ) (13/9) (13/9 )

(59/37) (23/18)

(6/5) (12/7)

(20.14)

(N = 16): (17/12)

(11/7 ) (14/12)

(10/7) (10/7)

(8/7) (14/12) (18/13)

(5/4) (14/10) (11/10) (52/46) (12/10) (23/12 )

(13/8 ) (8/5)

D D R D D R R R D R R R R R R R R

.R D R R R R R R R R R R R D R R

R R/D R D R D R R R R R R R R R R

26/12 10/7 1/12

17/12 10/9 9/15 8/12 2/5

12/7 4/19 4/9 3/5 6/8 7/8

5/28 5/10 3/11

2/12 10/8 7/14

11/13 4/11

11/12 17/18 7/11 7/13

3/6 6/11 5/15 8/27 8/8 2/9 6/9

10/13 8/15

5/5 11/8 4/15

5/2 4/13 8/26 2/10 7/12 7/8

12/25 5/9

3/14 4/13 4/12

***

***

***

*** *** ***

***

***

*** ***

***

***

***

***

*** ***

***

***

* Percentage of commercial farms with milk cows according to 1982 Census of Agriculture; least dependent = 5-25%; medium dependency = 26-45%; most dependent = 46%.

**Shift in party status of 3 county legislative seats would shift (or tie) leadership from majority to minority party.

13

In New York state, a possible political ramification of dedairying linked to bST could assume the form of party realignment at the county or state legislature levels. In Table 6, we consider the former. Following recent research performed by Carlin and Green (1985), which projected potential party change related to farm crisis conditions in 700 "farm dependent" counties in the united states, we classified New York counties according to three levels of dairy dependency. We identified county legislators allied with either major party and generated ratios of Democrats to Republicans by county. We then identified counties with close ratios. On the assumption that a small realignment (three votes) through electoral processes would tie or reverse party leadership, we identified politically vulnerable counties. Eighteen counties out of 49 studied were politically vulnerable by this criterion and were rather evenly distributed across the three dependency groups.

In summary, it should ,be noted that bST impact assessments to date have directed their analyses to smaller operators. Our research suggests that larger adopters of bST will not necessarily be winners in the predicted "orderly transfer of resources" out of dairying. We noted the inevitable increase in labor costs and production uncertainties which accompany herds in excess of 60 to 80 cows. Added to this is expanded risk in debt and increasing likelihood of normal accidents as larger operators, for example, sacrifice first-hand familiarity with the idiosyncrasies of their animals. There will be unintended consequences such as massive waste disposal in an already inflexible operating context (wells of 32 states ~ric ltural nitrates have been located in /excess of current u.s. health standards [O'Hare, 1984]). And there are unresolved veterinary effects in dairy cows hyperstimulated by bST treatments (Epstein, 1989). Finally, there are important unknowns in adopting a yield-enhancing technology subject to foreign boycott and, in the process, jeopardizing price supports which most foreign competition enjoys.

IV. CONCLUDING THOUGHTS

In this paper we compared and contrasted two modes of dairy production. One mode of organization is based on relatively small-scale, flexibly-specialized, family organized producers. The contrasting mode is organized around large-scale, mass production units putting greater output above other considerations. Currently, we see the existence of both modes of production in New York, with the small-scale, family producer still predominant. However, in many Sunbelt states, the mass production model is prevalent and is expected to spread rapidly to other regions of the country with the commercialization of bST.

14

The advent of advanced dairy technologies such as bST will hasten the decline of the flexibly-specialized, craft segment of the dairy industry. Unless offsetting measures are taken, advanced dairy technologies such as bST will lead to a regionally, economically, and organizationally homogeneous system of milk production. For New York, this will mean a decrease in the number of dairy farms in the North Country and the western Southern Tier and an intensification of production in the Northern Tier of counties below Lake ontario. Already we see the emergence of very large herds in the Northern Tier. Ten years ago there were no New York herds over 500 cows. Today, there are 39 herds this large and 33 of them are found in the Northern Tier.

What we wish to emphasize as the conclusion to this analysis is that, in advance of the commercialization of bST, the option remains to arrest the drift toward technological monoculture in the dairy industry. It is possible--even desirably based on the foregoing analysis of system level effects--to encourage both craft and corporativist modes of organization rather than one at the expense of the other. Earlier, we noted that there is considerable overlap nationally in the spatial distribution of large and small dairy farms. The same remains true for New York and suggests, as do Piore and Sabel, that both forms of economic organization can coexist.

Consider two other fluid commodities, beer and wine. while the beer industry is dominated by a handful of very large producers such as Coors, Anheuser-Busch and Millers, hundreds of local breweries have appeared in recent years tapping specialty markets (Erickson, 1987)

similarly, the wine industry is both craft and corporatist in organization. Prior to 1950, the latter economic strategy dominated and wine quality in the United states was hardly distinguished. This has changed dramatically, however, with the rapid evolution of small, flexibly-specialized producers making premium products and relying heavily on direct marketing or close equivalents (Vreeland et al., 1982; Delacroix and Sultan, 1988). Like family-based dairying, wine production has a ceiling beyond which a producer is almost obliged to go commercial (Folwell, 1987). Where wine production has become large scale, susceptibility to root stock disease, human-induced contamination and even poisoning has risen.

The message of this paper should be obvious. BST is one of many recent technologies contributing significantly to the restructuring of the dairy industry to increasing concentration of production units, homogenization of dairy products, and technological monoculturalism. Clearly, there

15

is more than one way to milk a cow. However, much research and policy effort assumes there to be but one patent for producing milk in the future and narrowly focuses on enhancing productivity and efficiency for only certain segments of the dairy community. Smaller producers, those defined as poor managers and those located in areas not deemed suitable for large-scale dairying in the future receive inadequate attention. We have identified risks to the system and to large producers if this trend continues. BST will drive a deep wedge into an already segmented dairy industry, but total dependence on one production strategy to the exclusion of the other--especially when the root problem in the industry is overcapacity--is not in the public interest.

Bauman, D. 1985

16

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