Once again, california dairy is on the move. Both cow numbers and milk per cow are on the rise. Counties are approving dairy permits; construction is booming, and “mega dairies” are appearing again. In fact, we currently have more new dairies under construction than at any other time during the previous five years. In addition, producers are remodeling, adding corrals and retrofitting parlors — all to increase numbers and enlarge operations.
Given the list of on-going concerns — the Environmental Protection Agency, nutrient management, air quality, urban encroachment, and high land prices, just to name a few — one must ask what it is that keeps California producers here in the Golden State when greater opportunities might be found elsewhere.
The California dairy industry continues to survive for a number of reasons. California dairy producers are:
1. Businessmen seeking growth opportunities.
High land and replacement heifer costs may limit one’s ability to expand in a given geographic area. But, that has not stopped some producers from taking the technology and business strategies they have honed here and opening up dairies outside of the state. They have sought out partners or groomed a family member to run the new dairy. Some of these dairies become satellites, with many decisions still made from the main dairy back in California.
With all of the challenges the industry faces, California dairy producers have banded together.
Take, for example, the birth of the Dairy Alliance. This group of dairy producers and allied dairy industry personnel has raised money, provided support for dairies facing court challenges and difficulties in the permitting process, and become an information resource. Another example we’re currently seeing involves producers joining together to purchase feed products and negotiate a better price.
This new dawn of cooperation within the industry certainly bodes well for our future.
I see the strongest focus ever of producers who want to do the right thing. They are constantly adapting technology and making the necessary changes to their dairy operations to secure their role in the future of this industry. They are showing sensitivity to pressing issues, including consumer concerns, and actively seeking solutions. Making the industry better also makes it more secure. The goal of California producers is to keep this industry profitable and vital to California.
4. Savvy at finance.
The financial community, as a whole, sees a bright future for the California dairy industry. Again, much of it has to do with the producers’ savvy business skills. Dairy producers here do strategic financial planning that includes high-quality financial reporting, budget maintenance, projections, business plans, possible hedging, cost cutting and charting for well-planned growth.
The strength of the dairy industry lies in the strength of its members. While I think California producers are heavyweight champions in their own right, I am encouraged every time I see some of these same traits demonstrated by producers elsewhere.
Anthony DeRose is an executive vice president of Wells Fargo Bank in Visalia, Calif.