Erik Gerlach

Document Type

Thesis - Open Access

Award Date


Degree Name

Master of Science (MS)

Department / School



South Dakota dairy production is declining in terms of number of dairy farms, number of dairy cows and volume of milk production. To reverse the decline, state policy makers and local action groups have worked to encourage dairy development, which has emerged primarily in South Dakota’s Interstate-29 (I-29) corridor. The milk production industry is trending towards larger units leading to a struggle between producers, local policy makers, and residents regarding locating larger dairy operations in eastern South Dakota. Therefore, it is important to know the economic impact of the dairy industry within South Dakota so informed decisions regarding the future of dairy within the state are made. Separate production functions were developed for a “representative” 150 head dairy farm and 1000 head dairy farm in eastern South Dakota from farm data collected from both primary and secondary sources. The IMPLAN, Input-Output Model for Planning, was used to evaluate dairy expansion and contraction scenarios for a local, six county study area as well as the state of South Dakota. The economic impact of both the 150 head and 1000 head dairy model was positive. The 1000 head dairy generally had higher multipliers resulting from increased fee and wholesale purchases. The 150 head dairy model, which internalized the production of feedstuffs, demonstrated high value-added multipliers than the 1000 head dairy model. Output, employment, and value-added multipliers were developed for the cheese manufacturing industry, a forward linked industry of dairy production, to determine the impact of a hypothetical increase in cheese production associated with an increase in dairy production. The cheese manufacturing multipliers were higher than that of either dairy model, suggesting the need to maintain a certain level of dairy production within the state. Which will in turn maintain processing capacity.

Library of Congress Subject Headings

Dairy farms -- Economic aspects -- South Dakota




Number of Pages



South Dakota State University