We are at an interesting moment in the dairy sector. For years, smaller farmers with around 200 cows, who were also great graziers, could undercut the costs of large concentrated dairy operations, keeping costs low, taking healthy margins in good years, and surviving the bad ones.

But something has changed: CAFO dairies have grown bigger and bigger (10,000 cows is now normal, and 100,000 is no longer an exception) and their economies of scale mean they are undercutting the grazers. Of course, this leads to massive manure lagoons, animal welfare disasters, and all kinds of other externalities, but nobody is paying for that yet. Not to mention that you can only push biology so far before it literally breaks.

So what’s next for regenerative grazing? Joe Tomandl, 4th generation dairy farmer, founder and director of the Dairy Grazing Alliance, argues instead for focusing on the transition of mid-size farms with 300– 700 cows that have surrounding land which could be grazed but currently isn’t. You need grazing experience and a long-term offtake agreement, but it can be done.

And what about nutrient density and quality? What’s good enough in terms of grass-fed,  50% on grass or 70%? We talk decentralised processing, consumers who are waking up to where their food comes from, and the huge fragility and risks of a super-centralised, heavily indebted system. Enjoy this deep dive into dairy, regenerative, grazing-based dairy in the US!

This episode is part of the Role of Animals in food and agriculture systems of the future series, supported and co-produced by the Datamars Sustainability Foundation.

We unpack how CAFOs seized the cost advantage, why many small graziers lost ground, and the practical route to bring cows back to pasture without pricing out the shopper. The plan centers on a realistic baseline, at least 50% of seasonal dry matter from grazed pasture, and focuses on mid-sized farms that already sit within walking distance of hundreds of acres. With lanes, water, fencing, and virtual collars, these herds can harvest their own feed, improve animal welfare, and reset the economics through premiums and smarter logistics.

We dig into the bottlenecks that matter: processing consolidation, the challenge of segregating “grass milk,” and why trucking math can erase small-farm relevance. Joe outlines how multi-year offtake agreements, blended finance, and regional processors can unlock scale and identity protection. We compare organic and 100% grass-fed models, explore where costs spike, and highlight a middle path that preserves integrity while meeting the market.

Beyond farm gates, this conversation is about resilience. A highly centralized dairy chain delivers cheap milk until a shock hits. Grass-based systems diversify production, keep value in rural towns, and train new graziers through apprenticeship-to-ownership pathways. Joe sketches a concrete target: a million acres and roughly 5% of U.S. dairy cows dedicated to pasture could power a multi-billion dollar grass-fed market and rebuild regional processing.

EXPERIENCE-BASED LEARNING (LEARNING WHILE DOING)

The Dairy Grazing Apprenticeship is an initiative designed to teach managed grazing through hands-on, practical experience. Joe emphasises that the complex principles of regenerative grazing cannot be effectively taught in a traditional classroom setting.

“We created a two-year, 4,000-hour apprenticeship where it’s ‘earn while you learn’ working on a dairy farm, with 3,700 hours of ‘on-the-job training’ and 300 hours of related instruction.” — Joe Tomandl

WHY REGEN DAIRY IS STRUGGLING

There is an intense economic pressure on regenerative, grazing-based dairies from highly efficient, large-scale conventional operations. The economies of scale achieved by industrialised dairies have eroded the former cost advantage that smaller, grass-based systems once held.

“It is very difficult to be a least cost producer anymore on a grass-based system… you can see costs of a hundredweight could potentially be eight to $10 less just because of the efficiencies of the scale that they have.” — Joe Tomandl

WHY DID CONVENTIONAL GO SO BIG??

Let’s face the historical shift in dairy towards an industrial, production-driven mindset. The move towards large-scale confinement dairies to a focus on maximising milk output per cow was supported by industry inputs, universities, and a perceived pathway to being a “better” farmer.

“It was a production-driven thing. It was like, ‘Okay, if you’re a better farmer, we’re doing better’. If we could get 20,000 pounds of milk out of an animal, or 25, and you just keep driving toward that direction.” — Joe Tomandl

OPPORTUNITY OF MEAT COMING FROM DAIRY COWS

On quality, we look at emerging nutrient density data—omega-3 to omega-6 ratios and CLA—plus the seasonal flavor shifts cheesemakers love and commodity buyers resist.
There is potential for adding value by marketing beef from dairy cows, especially those raised in grass-fed systems. Joe sees an opportunity to create a premium in a market for this meat, which could provide additional revenue and improve the overall viability of regenerative dairy operations.

“I think it very well can. And there again, if you’re pulling out of these types of markets, let’s say you’re pulling out of a grass-fed dairy type of market where there is a floor.” — Joe Tomandl

OTHER POINTS DISCUSSED:

Koen and Joe also talked about:

• Why low cost was a great driver for grazing dairy
• The future of regen dairy
• Creating brands is crucial
• Off take agreements
• High cost of organic transition
• Tech enabling grazing transition

LINKS:

• Dairy Grazing Alliance
• History of Precision Fermentation
• Rhizome Food
• Nofence
• Collie
• Eric Smith Edacious Herb young

LINKED INTERVIEWS:

• Knut Bentzen on how to scale virtual fencing, the true enabler of regeneration
• Chris Bloomfield and Daniel Reisman – We need animals outside to feed the planet sustainably
• Eric Smith – Commoditization is the root cause of all ecological destruction and human health impacts
• Herb Young – After 36 years at Bayer, growing regen citrus with 8x the nutrients
• Ichsani Wheeler – We need more large animals in our landscapes
• Walking the land with Benedikt Boesel – Fully integrating 300 cows into a 1000-hectare arable very sandy farm
• Dianne, Ian and Matthew Haggerty – Food, not commodities: how regenerative agriculture works at scale on 63,000 acres
• Jonathan Lundgren – You need more cows, not fewer, to save the planet
• Alfonso Chico de Guzmán – The ag-tech that brings cows back

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Feedback, comments, suggestions? Reach me via Twitter @KoenvanSeijen, in the comments below or through Get in Touch on this website.

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The above references an opinion and is for information and educational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.