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Rondorf, Riva Suzanne

Community Development and Applied Economics

2007

MS

The dairy industry in the United States has experienced significant changes in the past two decades. In Vermont, this is shown by a marked decrease in the number of individual farms and the increase in average herd sizes. This situation poses a threat both to the environment around larger-scale farms and to the small, family farm economy of Vermont. The emergence of the organic dairy industry has provided what some are calling a "lifeline" to many Vermont dairy farmers. Organic dairy has expanded quickly in Vermont but there is little available data on this new industry. Thus, the three articles of this thesis investigate the origins of the organic dairy industry, the role of farmer-to-farmer relationships in organic dairy profitability, and the causal assumptions within a theoretical framework for investigating the impacts of farmer-to-farmer relationships. The first article reviews the history of the organic dairy industry in the United States. The earliest farmers, their early markets and consumers, and the challenges the organic dairy pioneers faced are, for the most part, unknown. The article identifies key producers in the Northeast and Midwest and the role those producers played in the growth of the industry. The article ends with a discussion of the conflicting idealistic and corporate elements in the industry today.
The second article of this thesis focuses on organic dairy farming today. The research question addresses farmer-to-farmer relationships and their effect on farm profitability. The data set consists of detailed financial and farm characteristic data on 26 organic dairy farms in Vermont. The Geographic Information System (GIS) program ArcInfo was used to create an organic dairy farm data set that operationalized farmer relationships by farm location, creating location-based relationship variables for the regression model. The research hypotheses are rejected, however the model is not without merit. Recommendations for further research include a discussion of the ideal data set for testing questions of farmer-to-farmer relationships and farm profitability. The third article of the thesis addresses the causal assumptions behind the regression model of Article II. By considering the weakest points within the model, and by introducing models that account for interaction, mediation, and moderation effects, a framework for future research on farmer-to-farmer relationships and farm profitability is developed. This strengthens the recommendations for further research from Article II and adds to the general conclusion. The general conclusions of the thesis reflects on the findings from each article, drawing them together to make recommendations for the research topic of organic dairy farm profitability in Vermont. The need for a data set that considers adoption characteristics along with demographic and relationship characteristics is highlighted.