Monday, January 12, 2009

Milk Prices Dropping

San Francisco Chronicle Front Page story on declining milk prices.

This is interesting. A few facts to consider while you read it.

California is 12% of the human population of the U.S. However, it is home to 20% of the country's dairy cattle, and 22% of the milk supply. The state's cow population and milk production in recent years has been growing significantly faster than it's human population. The CA dairy industry has been growing faster than any other state (although the number of dairy farms is declining as they grow larger). The state leads the nation in alfalfa (heavy water consumption) production to feed those cows.

California has terrible air pollution (particularly in dairy country in the south valley) and has just passed AB32 to combat global warming, despite the potential of heavy economic costs. Cows produce a tremendous amount of green house gases. The projects pumping water to those alfalfa fields are the biggest power consumers in the state, and are harming the Delta.

I like agriculture and farmers. I eat meat and I drink milk. Agriculture is important to the Valley and I want it to stay that way. However, it is fair to question whether it makes sense for California to be such a huge dairy producer.

This industry has grown fast, and the profits of individual dairy farms will improve if the industry shrinks. Part of the profitability problem is that feed costs have increased greatly, and the industry's growth is partly to blame for increasing demand/prices for inputs too. Govt. should not intervene to prevent the shrinking of the herd.

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