California poised to pass Wisconsin in cheese production

MADISON, Wis. – California, the cheesehead state? It could happen if current trends continue, warns a University of Wisconsin-Madison researcher.

Gaining ground. Over the past 20 years, Wisconsin and the upper Midwest have steadily lost ground to California and other Western states in milk production.

California passed Wisconsin to become the nation’s largest milk producer in 1993, and could become the leading cheese producer in a few years, according to agricultural economist Ed Jesse.

That doesn’t have to happen, he adds, but it will take action by industry and policymakers in the upper Midwest to keep the cheese crown in Wisconsin.

A falling out. Wisconsin is already seeing fallout from the status quo. Last year, Alto Dairy Cooperative and Land O’ Lakes abandoned plans to build a large cheese plant in Wisconsin, citing diminishing milk supplies in the upper Midwest.

Land O’ Lakes has expanded operations from the Midwest to California and the Northeast, and Alto plans to diversify out of cheese production. Also, Sorrento closed its Arpin cheese plant, blaming high milk costs and limited milk supplies.

There’s a lot more milk out West than there used to be. Between 1980 and 2000, the upper Midwest region increased milk production by 1.6 percent (about one-half billion pounds), but saw its share of the national market fall from 27 percent to 21 percent.

West production is up. During that time, Western production increases ranged from 77 percent to 171 percent, and national market share for the five Western regions increased from 21 percent to 38 percent.

Wisconsin milk production peaked at 25 billion pounds in 1988, and has followed a sideways-to-downward trend since then.

The West is beating the upper Midwest in milk yields. Four Western regions show a per-cow production increase of more than 300 pounds of milk per year, compared with about 250 pounds in the upper Midwest.

Cow herds are up. Cow numbers are rising in Western herds, but decreasing everywhere else. As a percent of the 2000 dairy herd, the annual decrease in the upper Midwest is 2.25 percent, while increases in Western regions range from 1 percent to 5 percent.

To see what the next 20 years might look like, Jesse and research assistant Jacob Schuelke extrapolated regional milk yield and cow number trends.

What could happen. If current trends continue unchanged, by 2020 milk production in the upper Midwest will fall to 25 billion pounds per year – 10 billion pounds below current levels. The region’s national market share falls to 12.3 percent.

Production gains in the West slow somewhat, but collectively the five Western regions supply 61 percent of the nation’s milk in 2020. California would produce nearly 60 billion pounds of milk – almost 30 percent of the nation’s supply.

Fortunately for the upper Midwest dairy industry, trend projections show what could be, not what will be, Jesse points out.

The 60 billion figure probably won’t happen. “Despite occasional water supply problems, high energy costs, increasing competition for land between forage and other crops, urban encroachment, and many other challenges, growth in milk production in the Golden State has been virtually unchecked,” Jesse notes, and that will change.

Tapering off. Western production gains will taper off in coming years for several reasons, such as irrigation water availability, higher feed costs, and environmental/manure management regulations.

“We admit up-front that projections based exclusively on historical trends are na