New Study Shows a 30 Percent Increase in Economic Growth

SOUTH SAN FRANCISCO, Calif. & MODESTO, Calif. (Business Wire EON/PRWEB ) September 9, 2008 -- California’s dairy business generated $61.4 billion in economic activity within California in 2007 and a record 41 billion pounds of milk. The data represents a 30 percent increase in economic growth and a nearly 12 percent increase in milk production since 2004, according to a study released today by the California Milk Advisory Board (CMAB).

The dairy industry continues to have a significant impact on the state's economy, with a $14 billion increase in economic activity since 2004

In the face of rising costs and stricter regulations, we remain one of the largest agriculture forces in the state as dairy demand and consumption continues to increase.

From the increase in fluid milk production to the growing number of dairy product exports including butter, cheese and frozen desserts, California remains a leader in overall dairy shipments. The study was conducted for the CMAB by J/D/G Consulting Inc., an independent dairy industry research firm based in Florida that conducted the last study in 2004. Previous data from 2004 placed the dairy industry’s economic impact on California at $47.4 billion.

“The dairy industry continues to have a significant impact on the state’s economy, with a $14 billion increase in economic activity since 2004,” said Stan G. Andre, Chief Executive Officer of the CMAB. “In the face of rising costs and stricter regulations, we remain one of the largest agriculture forces in the state as dairy demand and consumption continues to increase.”

The study estimates that the California dairy industry created nearly 435,000 full-time jobs in 2007, examining economic activity associated with on-the-farm and beyond-the-farm jobs, including those who grow feed, as well as workers in processing plants, distribution centers and grocery stores in the U.S.

California Remains Nation’s Dairy Leader

According to the study, in 2007 California had 1,960 dairies with 1.8 million dairy cows that supplied milk to 120 dairy processing plants, which produced cheese, fluid milk, ice cream, butter and other dairy products.

Demand from Californians for milk produced locally is expected to increase. The Real California Milk seal was introduced by the CMAB in late 2007, and helps consumers identify milk from California dairy farms and other dairy products, including butter, ice cream and yogurt, produced exclusively with California milk. According to research conducted for the CMAB by OTX Research, just three months after the launch of the new milk seal, 89 percent of California consumers reported an intent to purchase milk and other dairy products bearing the seal.

It was California’s growth in milk production that led the CMAB in the late 1990s to actively begin promoting California cheese out-of-state under the Real California Cheese seal. Today, cheese bearing the seal can be found in supermarkets across the country, with California cheese also available through foodservice and pizza distributors in almost every state.

California Dairy Production Highlights

Following are highlights from the study underscoring the growth that has made California a national dairy industry leader:

• 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.

¹Note: Milk production is measured in pounds. One gallon of milk equals 8.6 pounds. Data includes gains over the last decade (1998-2007) and gains since the last report (2004).

Study Methodology

This analysis of the California dairy business by J/D/G Consulting Inc. relies on numerous sources of published data that measure various aspects of milk production, dairy product production, dairy food distribution, grocery retailing and foodservice businesses. It also uses economic output, earnings and employment multipliers developed by the U.S. Department of Commerce, Bureau of Economic Analysis (BEA). BEA-developed multipliers are provided for a host of industries, including milk production/dairy farming and dairy processing/manufacturing for each state.

About the California Milk Advisory Board

The California Milk Advisory Board (CMAB), an instrumentality of the California Department of Food and Agriculture, is funded by the state’s nearly 2,000 dairy families. With headquarters in South San Francisco and Modesto, the CMAB is one of the largest commodity boards in the United States. The CMAB executes advertising, public relations, research and retail and foodservice promotional programs on behalf of California dairy products, including Real California Milk and Real California Cheese. For more information on California dairy products, visit www.RealCaliforniaMilk.com.

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