INSIDE . . .
3 Californias Dairy Industry in 2016
5 California Milk Production Summary, by Herd Type
6 Statewide Cost Comparison Summaries
8 Statewide Quarterly, and 5-Year Cost Comparison Summaries
10 Herds Summary/Cost Comparison for Holstein, Jersey, Crossbred, California 3X vs. 2X Milking, and Organic Herds
15 Feed Data
19 Labor Data
22 Top Ten Counties Profile, 2016
23 U.S. Mailbox Prices, Average Prices Paid to Producers
24 Quota Summary and Transfers
25 California Dairy Producer Assessment Rates
26 Glossary of Terms
This publication was prepared in the Division of Marketing Services, Dairy Marketing Branch by:
Cost of Production Unit StaffSupervisor, Mike FrancesconiField Auditor, Cindy (Davis) Prentice Field Auditor, David DaSilvaField Auditor, Mirek WilczekField Auditor, Peter Betschart
In Cooperation With:Dairy Marketing Branch Economics and Statistics
Units, and the Milk Pooling Branch
U.S. Department of Agriculture, Washington, D.C.
National Agricultural Statistics ServicePacific Region Office
Chris Messer, Director
This publication would not be possible without the cooperation of the many dairy producers throughout the State who participate in the Cost of Production Program. Their willingness to voluntarily share their milk production cost data is of great benefit to the entire dairy industry. Corrections of errors and revisions based on receipt of more complete information and changes in methodology, are the basis of all changes from previously published data. Data in columns displaying percent change are subject to rounding.
Department of Food and AgricultureKaren Ross, Secretary
Dairy Marketing Branch1220 N Street, Sacramento, CA 95814
(916) 900-5014 / www.cdfa.ca.gov/dairy
California Cost of Milk Production Annual
Cost of Production Collection Methods
The California Department of Food and Agriculture (Department) Cost of Production Unit (COP) collects and summarizes cost data from a sample of California dairy farms and is the only state in the U.S. that has an impartial government agency reporting comprehensive milk production cost information. Milk Production Cost Auditors specializing in cost accounting and other accounting procedures review dairy farm financial records on-site and work with dairy management to perform a compilation of dairy expenditures. This information is provided primarily as a service to those participating in the cost studies, in order for them to compare the results of their operations with the information presented on the accompanying schedules. All published data is subject to revision.
COP Secure Website
The COP has developed a secure website called the Cost of Production Unit Document Library which allows cost study participants to access their financial information compiled by the auditors into specialized reports. This site has been developed to make sure that confidential and personal information will not be compromised. The link for the website is located at http://www.cdfa.ca.gov/dairy click on Cost of Production and a link for the secure website will be at this location.
2 California Cost of Milk Production Annual 2016
he California Dairy Statistics Annual for 2016 reported total milk production was down 1.1 percent, compared to the previous year, the
number of dairy cows declined 0.6 percent, milk per cow was down 0.5 percent, and the number of dairies decreased by 3.2 percent. The twelve month average price paid to California producers for farm milk in 2016 was $15.03 per hundredweight (cwt.), which represents a drop of 2.4 percent from the previous year.
Milk ProductionCalifornia milk production decreased each month through the first three quarters of 2016, compared to the same month in the previous year, and adjusting for leap day in February. However, milk production during the fourth quarter increased each month compared the same month in 2015. Total milk production for 2016 was 40.4 billion pounds, which is 429.6 million pounds less than the previous year. The five leading milk producing counties (Tulare, Merced, Kings, Stanislaus, and Kern) accounted for 72.4 percent of the states total milk production in 2016. Grade B milk production in 2016 recorded an increase of 73.1 percent (334.4 million more pounds), when compared to 2015. Milk production per cow in 2016 was estimated at 23,265 pounds and the total number of cows in the state was estimated to be 1.738 million.
UtilizationIn 2016, pooled milk utilized in the production of butter and dried milk products (Class 4a) increased slightly to 32.3 percent (from 32.1 percent in 2015). The percentage of pooled milk going into the production of cheese and whey products (Class 4b) also increased slightly to 46.4 percent (from 46.3 percent in 2015). In comparison to 2015, California butter production decreased by 3.0 percent, nonfat dry milk (for human consumption) production decreased by 19.2 percent, while the production of other dry milk products increased by 36.5 percent. California total cheese production hit a record high in 2016, logging an overall increase of 3.3 percent compared to 2015. For the top three cheeses produced in the state, compared to 2015, Mozzarella production increased by 4.5 percent, Cheddar production decreased by 4.2 percent, and Monterey Jack production increased by 4.1 percent. In 2016, utilization of pooled milk for Class 1 (fluid milk) products remained relatively unchanged at 13.0 percent compared to 2015. Whole milk sales increased in 2016, while reduced fat, lowfat, and skim milk sales decreased compared to 2015. Half-and-half sales remained constant in 2016 compared to the previous year. As a whole, Class 1 sales continued to decline in 2016, recording an overall decrease of 3.1 percent compared to 2015.
Californias Dairy Industry in 2016Milk PricesDuring the first part of 2016, the milk price was depressed, as the overall supply of milk on a national and global level outpaced the demand for dairy products. During the latter part of the year, milk prices strengthened as the supply of milk in most key dairy export regions began to contract, with the exception of the U.S. In California, the annual average price paid to producers for farm milk in 2016 was $15.03/cwt., with the lowest average monthly price occurring in May at $12.89/cwt. and the highest average monthly price occurring in December at $17.55/cwt.
HearingsThe Department held a public hearing on April 11, 2016, called on the motion of the Secretary, to consider amendments to the valuation of whey in the Class 4b pricing formula. As a result of this hearing, the Department implemented modifications to the steps and values of the dry whey scale. The dry whey scale adopted following this hearing was the same that was implemented on a temporary basis following a hearing held the previous year. Further information regarding this hearing may be accessed from the Dairy Marketing Branch website: https://www.cdfa.ca.gov/dairy/dairy_hearings_matrix.html.
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North Coast
North Valley
South Valley
Southern California
(Grey areas not included in the survey areas)
T
Cost of Production Survey Areas in 2016
INSIDE . . .
3 Californias Dairy Industry in 2016
5 California Milk Production Summary, by Herd Type
6 Statewide Cost Comparison Summaries
8 Statewide Quarterly, and 5-Year Cost Comparison Summaries
10 Herds Summary/Cost Comparison for Holstein, Jersey, Crossbred, California 3X vs. 2X Milking, and Organic Herds
15 Feed Data
19 Labor Data
22 Top Ten Counties Profile, 2016
23 U.S. Mailbox Prices, Average Prices Paid to Producers
24 Quota Summary and Transfers
25 California Dairy Producer Assessment Rates
26 Glossary of Terms
California Cost of Milk Production Annual 2016 3
