November 5, 2003

California's Dairy Industry The Largest in US; Generated $47.3 Billion in 2002

California's dairy industry is the largest in the United States, generating $47.3 billion in economic activity in 2002 in wages, revenues and related expenditures, according to a comprehensive study commissioned by the California Milk Advisory Board (CMAB).

The study reported that California's dairy industry generated 257,800 full-time equivalent jobs and had an economic impact of $35.1 billion.

The study identifies California's 2,100 dairies as the nucleus of a vast and growing industry comprising dairy farms and their suppliers, dairy processors and manufacturers, dairy products wholesalers and retailers, and foodservice suppliers. Last year, California produced 20% of the nation's milk and cheese. This share is projected to increase to as much as 30% within a decade, according to the CMAB.

The study also documents California's emergence as a national force in the production of dairy products. According to the study, 40% of the state's milk is now sold outside of California, mainly in the form of cheese, butter and skim milk powder. J/D/G Consulting, an independent dairy industry research firm based in Chicago, conducted the study.

"In terms of economic impact, California's dairy industry is one of the largest agriculture forces in the state, on a par with the state's wine industry," said Stan G. Andre, CEO of the California Milk Advisory Board. "The study results are particularly gratifying for California's dairy farmers as it shows we are creating jobs and revenues here in California communities," he said. "Based on milk sales within the state, each dollar in farm milk sales generates eight dollars in local economic activity, benefiting a range of Californians -- from those growing feed for the cows to those working in cheese plants and supermarkets."

California has been outstanding in US' dairy industry for two decades, Andre notes. He points out that the state's milk production grew 10 times faster than the national average growth during the past two decades (1983 to 2002) and cheese production grew seven times faster.

The study forecasts continued strong growth for the California dairy industry, projecting California milk production will grow by 31% to 45.8 billion pounds and cheese production by 48% to 2.5 billion pounds by 2012. This growth will soon propel California from second largest into the top spot in cheese production, Andre said, noting that there are several big cheese plants coming on line and the added production should make California the leader by 2005.