Impacts of the Expanding Dairy Industry on the Texas High Plains

The dairy industry in the Texas High Plains has undergone rapid expansion in the past two decades, growing from 12,066 head in 2000 to 262,622 head in 2015. This growth is due to establishment of new dairies as well as migration of dairies from other states. Many factors contributed to this growth, including availability of land, lower input prices, and a less stringent regulatory environment. Dairies use water both directly through drinking and facility maintenance and indirectly through irrigation of crops used for feed. It was hypothesized that overall water use and crop composition in the study region changed in response to the increased demand for silage from the dairies. Silage must be produced locally since the high moisture content makes it difficult and expensive to transport. The source of water for irrigation is the Ogallala Aquifer. This has caused concern as the aquifer is being depleted faster than it can recharge.
It was also hypothesized that dairies are generating economic value through supporting businesses for production inputs as well as processing facilities that have been established in the region. No existing literature examines the localized economic impact of dairies across specific types of businesses. The specific objectives of this study were to assess the impacts of the expansion of the dairy industry on water usage, crop mix, and business composition (including type, employment, number of establishments, and income). In addition, projections for dairy growth were used to estimate water use changes 10, 20, and 30 years in the future. Data from the beginning of the expansion period in 2000 were compared to the most current data (2015) in order to detect any changes that occurred. Irrigated crop data were collected from the Farm Service Agency (Farm Service Agency, 2018) and data on businesses were collected from the US Census Bureau’s County Business Patterns (County Business Patterns, 2017). In addition, a spatial analysis was conducted to examine how the location of dairies has impacted the study region. Results indicated that the regional crop composition increased in silage acres as did associated water usage across the study period. However, total irrigated acres decreased during this time; therefore, silage production displaced other crops such as feed grains. Several industry sectors showed increases in employment and number of establishments, such as construction, transportation, and animal slaughter. More houses are needed for additional workers employed by dairy processing facilities, milk and dairy products need to be transported to and from processing facilities, and slaughter facilities have expanded from the increase in dairy cull cows. In summary, the overall change in the region due to dairy expansion was an increase in silage acres, which generates higher value for the water pumped when compared to crops grown for grain. However, total irrigated acres in the study region declined, indicating the increase in irrigated acres for feed for dairies was offset by a decrease in irrigated grain acres. In addition, dairies have increased the number, size, and employment of related business establishments locally, which has increased the economic activity in these rural areas. Projections indicate that growth will continue at a slower rate in future years. Thus it can be expected that the dairy industry and other supporting sectors will continue to be a major contributor to rural economies.