Water-starved, regulation-burdened California dairy farmers are taking their cows to other states in hopes of getting cheaper land, more water, and better tax incentives for their businesses.
The World Ag Expo in Tulare, California features booths set up by no fewer than seven states–Nebraska, Iowa, Kansas, North Dakota, South Dakota, Texas, and Nevada–in an attempt to lure wary California dairy farmers to a more advantageous business climate, according to NBC News.
“Increasingly every year, there are more states showing up at the World Ag Expo to entice California dairies to move to their states, and they’re finding a receptive audience,” Western Milling market analyst and commodity manager Joel Karlin told NBC. “California has been losing cows to other states such as Idaho, Texas, and New Mexico–and now a lot of operators are looking at the Midwest more favorably since feed is cheaper, labor is cheaper, and water is more plentiful.”
According to NBC, California is home to 1.77 million milk cows residing in around 1,500 dairy farms. The state accounts for 20 percent of all milk production in the country.
However, milk-pricing regulations are hurting dairy farmers in the Golden State. While other states operate under the Federal Milk Marketing Order (FMMO), which sets milk prices based on a uniform market value, California milk prices are set by the state.
This week, the three largest dairies in the state filed a petition with the U.S. Department of Agriculture to join the FMMO. In their petition, the dairies called the state milk-pricing system “unsustainable.”
“In the absence of some of the personal issues, I would move in a heartbeat, because this is just not a fun place to do business anymore,” Tulare dairy farmer Mark Watte told NBC. “All of the California dairymen that want to expand are moving into other states. There has not been a new dairy built in California in probably 10 years, and I don’t think there ever will be another one built.”
Exacerbating the problem is California’s three-year-long drought, which weather agencies recently predicted would run for a fourth straight year. The lack of water impacts the availability of alfalfa hay, forcing many dairies to truck feed in from other states.
“California’s drought the last three to four years has made it tough for dairy producers there,” USDA agricultural economist Roger Hoskin said in the report. “But in the country as a whole, it’s been OK for producers, although milk prices are coming down from record highs or near-record highs.”
David Skaggs, dairy development specialist at the South Dakota Department of Agriculture, excitedly told NBC that farmers are moving into his state.
“We’re growing and we’re going to continue to grow,” Skaggs said. “We’ve got a young family up in Merced (California) that just purchased a farm in South Dakota, and they will be moving.”