The following statistics demonstrate the increase in the adoption of various dairy technologies among Wisconsin dairy farmers in recent years:

• Artificial insemination increased from 50% in the 1960’s to 80% in 1999.
• Use of total mixed ration (TMR) and milking parlors doubled from 1993-1999.
• Use of rBST increased from 2% in 1994 to 15% in 1999, despite some controversy surrounding its effectiveness.
• Use of management intensive rotational grazing (MIGR) increased from 7% in 1993 to 22% in 1999.

Not only do economic conditions drive the adoption of technologies, the farmer’s experience with and knowledge of technology is changing their behaviors and attitudes.
U.S. Dairy Technology Industry

• Farmers. The dairy farmer is the end user in this industry. Farmers are currently experiencing evolutionary changes as current dairymen are nearing retirement and are preparing to pass on the business. The question of succession has been a point of discussion among this generation’s farmers. Many farmers would prefer to keep the business in the family and pass it on to their children. However, the children of today are not as willing to take over the farms as in the past. When the children are unwilling to take over the business, the farms usually fold or get taken over by larger herds. This phenomenon is leading to a macroeconomic trend of decreasing number of dairy farms in the United States.

Farmers can generally be described as value conscious consumers. One key point to note is that farmer characteristics vary vastly by region. For example, farmers in California are considered progressive, while dairymen in Wisconsin are seen as more traditional.

• Equipment Manufacturers. Consolidation, strong sales, and a dedicated marketing and service network characterize the dairy farm equipment manufacturing industry today. Brand image, service and support, and cost competitiveness are the keys to market competitiveness. Due to consolidation, there are just a few main companies that are producing dairy farm equipment including DeLaval, Westfalia, Bou-Matic, Lely and SCR.

Customer Analysis

Vocal Tag’s technology potential customers are a segment of the more than 100,000 dairy operators across the United States. There are two main categories of farmers: those who operate family farms and those who operate “industrial farms.” Both categories are prospective customers, and specific segmentation recommendations are provided in the next section of this report.

Family farm operators are the traditional and still the most prevalent type of farmer in the United States. A profile of Wisconsin farmers can provide a reliable glimpse of the customer base.

Although family farms are still the most common, “industrial” farms are increasing in numbers. In these operations, it is common for a company to own the farm assets.

The owners hold shares in that company instead of owning land and cows. This new form of ownership is often referred to as an equity partnership (although the company is legally a separate person). The equity partnership's members might be a group of investors who are farmers - but equally, they might not have any farming expertise or background at all and instead rely on a dairy consultant to advise and manage employees. It might also be a family operation, in which the shareholders in the equity partnership are family members.

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