California Business Minute™

The California Redevelopment Association, CRA provides legislative
advocacy, professional development and public education.  In support
of its members it responds to legislative proposals and administrative
regulations.

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Hi, I am Tim Johnson and welcome to the California Business Minute.

California, the leader in dairy products in the nation has found difficult times. For example,
Foster Farms Dairy is ending contracts with more than 30 dairy producers, citing an oversupply
of milk and sluggish economy. Due to a lack of milk-processing capacity in the state, these
dairymen may be forced to close their doors or relocate out of state.

According to an article in the Modesto Bee, barriers to expansion in the state include tough
environmental rules and the state’s unpredictable, complex milk-pricing system. A report
commissioned by the California Milk Advisory Board last year said, "If the milk supply in
California keeps growing at historical rates of between 2 and 4 percent annually, it will be
hard to find enough 'mouths' to feed the milk to economically.”

California saw its production drop by almost 2 percent in August. Each of California’s “Happy Cows”
made around 1,840 pounds. But production was down by 60 pounds from the previous year even
with 24,000 more cows’ year- over- year. 

California Dairy Production Highlights:

•California's dairy industry generated $61.4 billion in economic impact in 2007 as compared to
  $47 billion in 2004, a 30 percent increase

•California's total milk production has grown from 27.6 billion pounds in 1998 to 40.7 billion
  pounds in 2007, nearly doubling in the last decade

•The average California dairy farm produces 20,756,633 pounds of milk, an increase of more than
  eight million pounds since 1998

•There were more than 1.8 million dairy cows in the state of California in 2007, up 88,000 from 2004

•Butter production increased to nearly 499 million pounds in 2007, up 29 percent since 2004

•Cheese production increased to 2.3 billion pounds in 2007, up nearly 15 percent from 2004. 
 
I am Tim Johnson and this has been the California Business Minute.

*Note: Milk production is measured in pounds. One gallon of milk equals 8.6 pounds.
Source: California Milk Advisory Board