A Closer Look at California’s Dairy Industry in 2010

April 12, 2011 08:33 AM

The Golden State retained its No. 1 ranking despite ongoing struggles.

California dairy sceneAgainst a backdrop of limited recovery and ongoing struggles, California dairies saw milk prices average $14.71 per cwt., production increase 2.2%, and 37 dairy farms close down during 2010.

The Dairy Marketing Branch of the California Department of Food and Agriculture (CDFA) released its annual dairy statistics report last week showing California retained its ranking as the No. 1 dairy state with 21% of the nation’s milk supply.

For the first four months of 2010, California milk production recorded net decreases compared to the same months of 2009. Beginning in May, however, each month through the end of the year witnessed an increase in total production from the previous year. The state’s 2.2% increase amounted to 867 million pounds above 2009 production totals. (CDFA said total U.S. milk production during 2010 increased 1.8% over 2009.) Overall, California’s 2010 milk production reached 40.4 billion pounds.

California’s dairy industry contributed $5.9 billion to the Golden State’s economy last year. Just five counties, all in the Central Valley, recorded 71% of the state’s 2010 milk production. The report noted that the number of California’s dairy cows remained relatively the same, increasing by only 1% for the year to 1.858 million. CDFA estimated per-cow milk production at 21,719 lb., while USDA calculates that number at 23,025 lb.

The increase in California’s 2010 milk production “occurred despite high production costs in categories including feed and environmental compliance,” the report said. California dairies “continued to invest in recently implemented air and water quality programs that set environmental standards beyond what was required at the national level.”

The 12-month average of $14.71 per cwt. paid to the state’s producers marked a significant increase from 2009’s average of $11.48 per cwt.

“In 2010, most dairy producers experienced a lower cost of production and higher milk income compared to the prior year,” noted the report. “The decrease in the cost of production for 2010 was a result of lower feed costs for rolled corn and alfalfa hay.”

Feed costs averaged $7.84 per cwt. of milk, a 10.6% drop from 2009. In 2010’s fourth quarter, California dairy producers began experiencing higher prices for rolled corn, alfalfa hay and other feed ingredients.

The state’s 2010 milk utilization showed:
• Cheese increased to 41.0%, up from 40.2% in 2009;
• Butter and nonfat dry milk accounted for 34.8%, down from 35.2% in 2009;
• Mozzarella production accounted for more than half of California’s cheese production;
• Class 1 (fluid milk) fell to 15%, down from 15.3% in 2009.

California’s net loss of 37 dairies was much smaller than 2009’s 100 dairies, CDFA said. The agency counted 1,715 dairies in operation in the state at the end of 2010.

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