What is the Dairy Industry?

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  • Written By: Nicole Long
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  • Last Modified Date: 08 October 2019
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Dairy products are produced by the dairy industry for sale to consumers. The dairy industry produces and markets milk, milk by-products and dairy substitutes. Part of the larger economic landscape, this industry includes small and large dairy farms, dairy processors and those corporations involved with marketing, selling and transporting dairy products.

Small and large family-owned farms provide raw milk to processors. These farms care for herds of cows that produce the raw milk the farm then sells for profit. Very small farms may milk cows by hand, while larger farms use machinery to help milk cows on a regular basis.

Within the dairy industry, dairy processors pasteurize and homogenize raw milk. This process is used to remove harmful bacteria from raw milk, making it safe for the general public to consume. Dairy processors also package the finished product and sell it to grocery retailers and restaurants.

Beyond making milk safe to drink for the general public, dairy processors also provide another important service. Milk by-products — including butter, cheese, sour cream, yogurt and cream — are also produced at dairy processing facilities. Other by-products manufactured by dairy processing facilities include dry, evaporated and condensed milk products.


Producers of dairy substitute products also represent an important segment of the dairy industry. These producers use soybeans and other non-dairy substitutes to make products demanded by a wide range of consumers. These products are popular with people who either cannot or do not want to drink regular cow's milk. Along with milk substitutes, they include non-dairy cheeses, yogurts and ice creams, among other products.

Some farms may choose to offer organic products, whether on a local, regional or global scale. Organic milk, cheeses and cream can be found at retail groceries. Farms specializing in organic dairy production refrain from using synthetic antibiotics, hormones and chemicals.

Transportation companies, retailers and consumers play an important role in the dairy industry. Without proper transportation and storage equipment, the dairy industry would be limited to local markets. Retailers provide the mechanism for selling the final product and can react to consumer demand by ensuring adequate supply.

Operating in all 50 states in the United States, the dairy industry supports the economy in several ways. It provides funding for community development plans through the payment of taxes, and it allows for hundreds of thousands of employment opportunities. In addition, the dairy industry impacts the economic vitality of several other types of business, including veterinary medicine, machinery and banking, to name a few.


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