Calif. dairies boost economy, study finds

Posted at 08:44 PM on Tuesday, Feb. 02, 2010

California's dairy industry generated $63 billion in economic activity and created 443,574 jobs in 2008, according to a study released Tuesday.

The study -- released by the California Milk Advisory Board -- comes at a sobering time for many dairy operators, especially those in the San Joaquin Valley, the heart of the state's dairy industry.

Last year was marked by low prices, a shrinking export market and overproduction. An estimated 150 of the state's 1,700 dairies closed.

But dairy industry officials say that while 2009 was a rough year, the report serves to remind consumers why the industry is important.

"People often see us as just cows in barns," said Michael Marsh, CEO of the Modesto-based Western United Dairymen, whose 1,000 dairy members produce 60% of the state's milk. "But we generate a lot of jobs and economic activity."

The report, by J/D/G Consulting, a Florida-based dairy industry research firm, estimates that the typical California dairy generates $33 million in economic activity. And it also supports other industries, including milk-tanker drivers, grocery store clerks, feed farmers and employees at milk processing and cheese plants.

The report defines economic activity as the buying and selling of goods and services related to the making, processing and selling of milk.

Marsh said that while dairy industry is far from a full recovery, prices to farmers have gone up over the past several months.

And California has not lost its standing as the nation's leading milk producer. The state's total milk production was 41.2 billion pounds in 2008, up from 27.6 billion in 1998. It is expected to exceed 46 billion pounds by 2020.