Saturday, March 30, 2013

Struggling California Dairies Moving Out of State

I was just thinking about this while driving back from Las Vegas last weekend.

Once you come east of Corona and Norco, out by the Interstate 210, you can still see the remnants of the cattle ranches and dairy farms that decades ago dominated the landscape. Suburbanization has been encroaching for some time, but it's the state's anti-business climate that putting the final nail in the industry.

At the Los Angeles Times, "Dairies in California consider incentives to move out of state":
Other states have long poached California manufacturers and jobs. Now they're coming for the cows.

Seizing on the plight of the state's dairy industry, which is beset by high feed costs and low milk prices, nearly a dozen states are courting Golden State dairy farmers. The pitch: cheaper farm land, lower taxes, fewer environmental regulations and higher prices for their milk.

At the World Ag Expo, a behemoth trade show held in Tulare County last month, nine states had recruitment booths on the ground's Dairy Center.

South Dakota sent its governor, Dennis Daugaard, to make a personal appeal for his state. Ag officials there estimate that a single dairy cow creates $15,000 worth of economic activity annually through feed, vet bills and the like. That translates into jobs and revenue for hard-pressed rural areas.

"We're trying to corral some California cows," Daugaard said recently. "We're looking for dairymen who are looking to move out of California."

The state's $8-billion dairy industry leads the country in milk production. California cows produced 41.5 billion pounds of milk, or about 4.8 billion gallons, in 2011. That's 21% of the nation's milk supply. The next top milk-producing states, Wisconsin and Idaho, produced a combined 39.4 billion pounds of milk in 2011.

Although the migration is not yet a stampede, some California dairy farmers have left for what they see as better opportunities.

Sybrand Vander Dussen, 70, and his son, Mark, sold their 2,000-cow dairy in Corona two years ago. Mark Vander Dussen, 44, moved with his wife, Ranae, four kids and 800 Holstein heifers last year to set up shop in Greeley, Colo., where a $250-million cheese plant is under construction.

"We searched for a place that had better long-term prospects," Mark Vander Dussen said.

His father, a partner in the venture, plans to remain in California but said he's happy to no longer be dairy farming in the state. Sybrand Vander Dussen said when his friends heard that he was selling they said, "You're probably the smartest dairyman in California."

The federal government regulates milk prices in most states to prevent price volatility, but not in California, which has its own milk pricing system, established in 1935.

California dairy operators complain that the state's system is too stingy, and they're pushing officials to bring prices closer in line with the federal pricing system, partly to recover from tough years recently.
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