Natural-gas development appears to be associated with falling dairy production in Pennsylvania's Marcellus Shale region, but the exact reasons for the decline are unclear, according to researchers in Penn State's College of Agricultural Sciences.

In recent years, anecdotal evidence has suggested that natural-gas development is benefitting many Pennsylvania farmers, with money from gas leases and royalties allowing producers to pay off debt, invest in new equipment and remain active in a business often characterized by razor-thin profit margins.

Still other reports have indicated that some farmers are using gas-related income to make major changes to their operations or to leave agriculture altogether. However, very little data exists to measure the true impact of natural-gas development on agriculture in the state.

To get a better picture of how the natural-gas boom is affecting Pennsylvania's top agricultural sector, dairy farming, researchers led by Timothy Kelsey, professor of agricultural economics, examined county-level changes in dairy cattle numbers and milk production between 2007 and 2010, as reported by USDA's National Agricultural Statistics Service.

Those data were analyzed in connection to the level of natural-gas drilling activity in each county, as indicated by Pennsylvania Department of Environmental Protection statistics on the number of wells drilled during the same three-year period.

"Changes in dairy cow numbers seem to be associated with the level of drilling activity," said Kelsey. "For instance, counties with 150 or more Marcellus Shale 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 Marcellus wells."

Milk production followed a similar trend, according to Kelsey. "Production in counties with at least 150 Marcellus wells fell by an average of 18.5 percent," he said. "In contrast, milk production in counties with no Marcellus wells increased by about 1 percent."

For example, in Bradford County -- which had more than 500 drilled Marcellus wells and ranked sixth in the state in dairy production -- cow numbers and milk production both fell more than 18 percent during the period. On the other hand, Chester County, the fifth-ranked county in dairy production, had no Marcellus activity and saw cow numbers and milk production rise by 7.4 and 9.3 percent, respectively.

Overall, the report states, only two of the 19 counties with 10 or more Marcellus wells had an increase in cow numbers or milk production between 2007 and 2010. Meanwhile, 15 of the 33 counties with no Marcellus activity experienced an increase in cattle numbers or milk production.