An udderly changing ag industry

South Dakota State Roundup

Published May 1, 2008  | May 2008 issue

South Dakota has carved another exception into the state's Family Farm Act for the dairy industry.

The law is intended to limit outside ownership of farms. But in February, the state House and Senate both approved a measure to allow corporate ownership of farmland for dairy purposes. Several other exemptions already exist, including for poultry, eggs and livestock feeding and breeding.

The measure is being pursued in part because of the state's interest in growing its dairy industry. But starting new dairy operations, or expanding existing ones, requires a lot of capital, and this law allows outside parties—in essence, nonfamily members—to invest in dairies.

Critics of the measure said it would accelerate the trend away from small dairy farms. With or without the law, that cow is already out of the barn. According to the U.S. Department of Agriculture, the number of dairy herds in the state dropped from about 1,000 in 2004 to 670 last year. At the same time, total head has risen about 6 percent, and total production is up 22 percent.

Ronald A. Wirtz