Gas Drilling Impact On Dairying Studied

Natural-gas development appears to be associated with falling dairy production in Pennsylvania. Timothy Kelsey, professor of agricultural economics at Penn State, examined changes in dairy cattle numbers and milk production between 2007 and 2010, in connection to the level of gas drilling. Counties with 150 or more shale gas wells on average experienced a nearly 19 percent decrease in dairy cows, compared to only a 1.2 percent average decrease in counties with no wells.
Kelsey said additional research is needed to understand what is occurring. He said he can’t pinpoint whether these declines resulted from farms simply downsizing their herds, whether some farms shifted to other agricultural enterprises, or if they exited farming altogether. “Declining cow numbers mean fewer dollars spent locally by farmers to maintain their herds (and) fewer dollars coming to the local economy from milk sales,” Kelsey said. Feed stores, veterinarians, machinery dealers, milk haulers, dairy processors and supporting businesses are also affected. Kelsey said future research should investigate whether farmers who receive lease and royalty payments and stay in agriculture are using gas-related income to improve their farms, which has the potential to benefit the agricultural economy. To obtain a copy of the report, call (814) 865-6713.

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