ABERDEEN (AP) – Much of the state's fluid dairy product goes toward cheese production. That, and several other factors, have contributed to helping dairy producers in northeast South Dakota stay the course in today's turbulent dairy economy.

Warner Dairy, located near Warner, is a 2,000 dairy cow operation.

Manager Jacob Achen said dairy products that have a longer shelf life helps to keep the dairy market more stable.

"There's a pretty good demand for cheese," Achen told the Aberdeen American News. "Powdered whey and whey concentrate products are very popular right now especially for export products – we haven't gotten into that yet. But that's what's helping out the dairy market too, especially products with a longer shelf life. That's what's really helped a lot in the last couple of years."

Achen said Warner Dairy, which employs around 20 people, sells its product to DairiConcepts in Pollock to be processed into cheese.

"All of our milk goes to cheese. It's just the market that we're in. There's just more of a population for it," Achen explained.

According to Tracey Erickson, SDSU Extension Dairy Field Specialist, the number of dairy farms in the state has shrunk yet the number of cows on each operation has increased.

Achen echoed Erickson on the number of farms in the area.

"The ones that are left are doing something right," Achen said. "We have a good market for milk, good communities that support us and a good government that helps make sure that we continue to provide for the people."

Erickson said the decreasing number of dairy farms is attributed to producers needing to meet the bottom line which has become more difficult throughout the years.

But the challenges of South Dakota's dairy producers are akin to those throughout the country, she said.

"Some of the challenges are not necessarily the excessive milk glut. Dairy is a global market," Erickson said. "When Canada decided that they no longer wanted to accept concentrated milk in Wisconsin, we had producers in Wisconsin scrambling to find a processor. The Interstate 29 corridor dairy plants are cheese producer plants. A lot of our product goes toward cheese production when you compare it to milk."

There are some pros that the dairy plants along Interstate 29 are able to enjoy that other areas do not.

"Our producers here are fortunate in the feed costs are fairly low in comparison to other parts of the country so that improves the bottom line a lot," Erickson said. "They're closer to the plants and also the higher quality feed are typically raised in these areas. Having those good roadways and systems is critical along with the ability to raise high feed stuffs. Access to plants, of which most of them are located in that corridor because you still have to truck the milk from the farm. Being close to a population base, roadway systems, all these things come into play and that's why the I-29 corridor is becoming more appealing to people in the dairy industry."

The more fluid the dairy product, the more volatile the market, Erickson added.

"Fluid milk in comparison to cheese, that's an even more volatile market because of its shelf life. We aren't going to ship milk as far as we would cheese or yogurt," she said.

Jason Mischel, vice president of Valley Queen Cheese in Milbank, said for the last 10 years the dairy industry has walked a fine line to balance the supply and demand of milk.

He added that even cheese processing plants are not immune to changes in the dairy market.

"Because milk is highly perishable, it must be processed immediately after it is produced. When a supply imbalance of as little as 1 percent occurs, it can wreak havoc on markets," Mischel said.

"Added to that complexity is the industry's growing dependence on export markets," he said. "We are currently in a cycle nationally where milk supply has been growing faster than consumption and faster than exports can take up the excess supply. Dairy markets can be extremely cyclical and, at the moment, these factors are putting downward pressure on milk prices."

Valley Queen Cheese employs 250 people and makes a variety of natural, American-style cheese, including cheddar, Colby Monterey Jack, pepper jack and others.

Mischel said it's not the oversupply of milk that is the elephant in the room, but the increasing need for more dairy processing plants.

"With current manufacturing capacity and milk production, supply and demand are in relative balance. The cautionary note, though, is that milk production is growing at more than 5 percent annually with additional production capacity ready to build," Mischel said. "Processing capacity is not growing at the same rate. New processing capacity on a grand scale is very expensive to build relative to financial returns.

"The dairy industry nationally – not just locally – is wrestling with how to solve this complex supply and demand issue."

Procuring a legal workforce is a struggle dairy plants and operations are facing within the corridor, Erickson said.

"Finding people to work on the dairies is becoming quite challenging because not a lot of people are interested in that form of a job," Erickson said. "Even though they're offering fair and competitive wages, milking cows and feeding animals isn't at the top of people's list."

Sister Theresa Ann Wolf with the Benedictine Multicultural Center at Harmony Hill said the group supports the immigrant workers.

"We do what we can to help immigrants to become integrated in the community, so a lot of the immigrants come here to study English and a lot of them that come here work on dairies," Wolf said. "That is a reality that most dairies are struggling and looking for workers and part of that is South Dakota needs immigrant workers, and the environment especially since (President) Trump took office, is not favorable. It has not been good for our economy. Immigrants are frightened."

Wolf said immigrants have difficulties regularizing their documentation, and because they are unable to attain the right documentation, they become very vulnerable to deportation.

"South Dakota needs immigrant workers, the economy simply cannot function without them," Wolf said. "Generally it can be a very hostile environment for immigrants. Sometimes they leave out of fear because they're so afraid of being arrested and the dairies are left without any workers. Historically, white people will not do that kind of work.”