The dairy industry outshines Hollywood and the wine business when it comes to creating jobs in California.
Dairy-related spending generated an estimated 443,574 jobs in 2008, according to a new study funded by the California Milk Advisory Board.
It's not just the people who milk the cows or make the cheese. The job total includes suppliers of feed and other dairy farm needs, truckers who haul dairy products, grocers who sell the goods and many other workers.
• The dairy industry produced $63 billion in economic activity in California, up from $61 billion in 2007 and $47 billion in 2004.
• The estimated 443,574 dairy-generated jobs work out to about one for every four cows.
• These jobs were 3 percent of the total jobs in the state.
• The average dairy farm generated $33.1 million in economic activity and 232 jobs in the state, if the ripple effect of the industry is included.
• The state had 1.8 million dairy cows supplying milk to 117 processing plants.
• Milk is the top-grossing farm product in the Northern San Joaquin Valley and statewide. The region's farmers had about $2.1 billion in gross income in 2008, about 30 percent of the state total.
• California has led the nation in milk production since 1993.
• California milk produced in 2008 went first to cheese plants, which took 43.2 percent. Plants that make butter, along with nonfat dry milk as a byproduct, got 34.3 percent. And 14.3 percent of the milk went to consumers in jugs and cartons. The rest was made into ice cream, yogurt, sour cream and other products.
These people in turn spend their paychecks on housing, clothing and other goods and services, employing yet more Californians.
"It's really important, especially now with so many people unemployed out there," said Johan Bartelink, an Escalon-area dairy farmer and member of the milk board.
The study has one big caveat: The dairy business was especially strong in 2008, with farmers getting high prices for
their milk and consumer demand not yet shrinking with the recession.
Since then, a drop in demand and prices has forced an estimated 10 percent of the state's dairy farmers out of business. Conditions have improved since fall, but many farmers still struggle to cover their costs.
2009 drop a rarity
The bad 2009 was more of an anomaly than the good 2008, said Stan Andre, chief executive officer at the board, which has offices in Modesto and South San Francisco.
He said about half of California's milk is sold in other states or nations, mostly in the form of cheese, butter, dry milk and other goods with long shelf lives.
That makes dairy a more potent generator of jobs than sectors, such as retail, that mainly circulate money already in the state.
The study estimated that 35,045 people worked at dairy farms and processing plants in California in 2008. The indirect employment, what economists call the "ripple effect," was put at 408,529.
"You've got people stocking the shelves in the supermarket, working in the back cooler, working in the cheese case," Andre said.
The Ice Cream Company, a restaurant and ice cream parlor in Century Center in east Modesto, employs 15 people. Owner Rob Coey said about 55 percent of his business is from the frozen dairy treat.
"The sunshine comes out, people come out to get ice cream," said Coey, who makes 7,000 to 8,000 gallons a year with milk from Foster Farms Dairy of Modesto.
Leslie Butler, an agricultural economist at the University of California at Davis, said he has not reviewed the methods used in the study and cannot comment in detail.
He did agree that dairy products bring plenty of money into the state.
"It is true that the dairy industry is a large and important component of the California economy," he said.
Butler added that it's hard to pin down a typical year with the boom-and-bust nature of the industry.
"I don't think any year in the dairy industry is a representative year," he said. "Either the dairy farmers are jubilant or they are complaining."
The report does not break down the jobs by county, but there is no doubt that much of the dairy money flows through Stanislaus, Merced and San Joaquin counties. They account for about 30 percent of the state's production of raw milk and have several plants making cheese and other products.
Other people supply farmers with feed and water, provide veterinary care, and build and remodel the barns and milking parlors.
The milk board noted that winemaking, one of California's iconic industries, generated about 330,000 jobs in the state in 2008, according to a study done for the Wine Institute.
California movie and television companies created 208,230 jobs in the state in 2007, according to a study done for the Motion Picture Association of America.
The milk board study, conducted by Florida-based dairy consultant Jerry Dyer, was the fourth of its type in recent years.
Bee staff writer John Holland can be reached at jholland@modbee.com or 578-2385.
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