The Golden State continues to grow as a dairy powerhouse.

California is home to many of the country’s leading dairy processors, including our 2007 Processor of the Year. Some are California born and bred, while others are out-of-state companies with manufacturing facilities in the Golden State.

We invited two of California’s dairy industry leaders — Stan Andre, chief executive officer of the Sacramento-based California Milk Advisory Board, and Joseph O’Donnell, executive director of the California Dairy Research Foundation in Davis — to provide a snapshot of the state’s dairy scene. Their responses are offered jointly.

Q: Explain how the California dairy industry has evolved.

California has a long and rich dairy heritage. The state’s dairy industry, like its wine industry, reaches back more than 200 years to the Spanish explorers and missionaries who came to the region in the 1700s. They brought both grapevines and cattle. A simple cheese made in the early missions evolved into a farmstead cheese in the 1800s, and by the end of the century it was commercialized as Monterey jack, the most popular cheese created here in America.

Today, California’s dairy industry is the largest in the nation. Total milk production has increased every year since 1985 and reached 38.8 billion pounds in 2006. California has been the nation’s leading milk producer since 1993 when it passed Wisconsin. The state also is number one in the United States in the production of butter, ice cream, nonfat dry milk and whey protein concentrate. California cheese production has nearly doubled in the past decade, growing from 1.17 billion pounds in 1997 to 2.2 billion pounds in 2006. The state is projected to move into the leadership position in cheese production in the near future.

California is the country’s leading agriculture state and dairy farming is the largest agricultural commodity group among the 250 in California, producing $6.1 billion in annual sales. In 2004, the state’s dairy industry had an economic impact on California of $47.4 billion in wages, revenues and related expenditures and generated 434,000 jobs. Today, 40 percent of California milk is sold out of state, mainly as cheese and other manufactured products.

California enjoys the nation’s most dynamic and diverse cheese industry. On one hand, California has the single largest cheese plant in the world and several others that rank among the largest in the country. We also are the country’s leading producer of mozzarella. On the other hand, we enjoy a healthy and growing specialty-cheese industry, including a number of nationally and internationally acclaimed specialty, artisan and farmstead producers. Today, the state has more than 50 cheesemakers producing 250 different varieties and styles of cheese.

Q: What is the state’s reputation in the industry and with the public?

California’s dairy industry has developed an enviable reputation not only because of the quantity of milk and dairy products it produces, but also because of their high quality. California dairy farmers operate state-of-the-art dairies and follow industry best practices in terms of herd care and health, which is why California dairy cows are consistently among the most productive in the nation.

One advantage that California dairy products offer consumers is freshness. Dairies and processors are located near each other, and most dairy products are produced with milk that is less than 24 hours old. The short farm-to-market time gives California dairy products an appealing fresh milk quality.

Our cheese industry has quickly risen to the level of acclaim given our state’s wine industry. In recent years, California cow’s milk cheeses have been among the most-awarded American cheeses at the World Cheese Awards held in London, one of the most respected international cheese judgings. California cheesemakers have taken top honors in a number of categories, including several traditionally won by European cheeses, such as brie and cheddar. California cheesemakers also have taken top awards year after year in the prestigious American Cheese Society (ACS) competition. Last year, California cow’s milk cheesemakers won 31 awards in the ACS judging.

Growing recognition of California’s cheese industry is having a halo effect on its other dairy products. California cheese is now available in every state and this success has opened up national distribution channels for California butter, ice cream and other products.  

Q: Explain some of the trends California processors are either setting or following.

California is well-known as an incubator of innovation in many areas and this holds true for its dairy industry. California dairy farmers are rigorously committed to best practices and, in this effort, they are supported by scientists and technical experts at the University of California, Davis (UC Davis) and California Polytechnic State University (Cal Poly).

California is committed to produce the best value-added dairy products available to consumers. We have devoted considerable attention to our cheese industry over the past decade. As a result, California increased the number of varieties and styles of cheese it produces from 70 in 1995 to more than 250 today, most of them specialty cheeses, including artisan and farmstead. We encourage and assist our cheesemakers to develop and produce new cheeses and expect to see the range of cheeses we offer continue to grow in the next several years.

Consumers also can feel good about purchasing California dairy products because the state has the greenest dairy industry in the nation. This has come about because the California dairy industry, in meeting the highest air and water standards in the nation, has applied state-of-the art environmental practices.

Q: What innovations have come out of the California dairy industry?

California’s dairy industry has a long tradition of innovation. One of the first commercial dairies in the U.S. was created here in 1857, and in 1880 the state created what is thought to be the first branded dairy product when a dairy located outside San Francisco trademarked its butter.

Today, California is a leading dairy innovator. We have a tremendous resource in the scientific research and technical expertise at UC Davis and Cal Poly, and the work they have done, and continue to do, greatly benefit our industry.

As a result of this research, California has introduced new product lines such as customized nonfat dry milk powders for the overseas markets and the large-scale production of aged Cheddar cheese, where we have become a major supplier. Research has helped develop the Hispanic cheese category in California and the state is the largest Hispanic-style cheese producer in the U.S. The state was behind the development of the now booming specialty and artisan cheese industry in the United States.

Additionally, California researchers initiated the discovery of whey protein as a food protectant and the use of microencapsulation technology to deliver non-stable food additives. California dairy research also resulted in the development of a process for separating and purifying proteins from whey to be used as pure, natural food stabilizers in frozen dairy desserts and other products requiring stabilization; determined that milk protein concentrate (MPC) could be used to standardize milk for pizza cheesemaking, opening new markets for MPC; and ongoing work to create a set of precise, quantitative sensory languages for the flavors in milk powders, butter and whey is providing important information to manufacturers to remain competitive.

Export markets are growing rapidly and California dairy manufacturers, working with our research centers, have moved to expand dry milk product lines to meet the specifications of these overseas buyers. Consumer interest in heath, especially through functional foods, is a hot topic now. An example of a current trend is the area of foods fortified with probiotics, which is experiencing a surge of new product introductions.

Knowing that every component in milk holds some mission in delivering nutrition and health has spurred our researchers to fully understand the nutritional value of milk and milk components. As a founding member of the International Milk Genomics Consortium (www.imgconsortium.org), California is at the forefront of research tapping the tools of genomics to discover how these milk components deliver health benefits. This, in turn, will help in the development of new products.

Q: What is the outlook for future growth in the California dairy industry?

California’s dairy industry has enjoyed a historical milk production growth rate of 2 to 4 percent annually and this is expected to continue. From 1980 to 2004, California doubled its share of U.S. dairy supply from 11 to 21 percent. California cheese production has also shown consistent growth, reaching 2.2 billion pounds in 2006. Nearly half of all California milk goes to the state’s cheesemakers.

We envision continued strong growth as the California dairy and cheese industries increase distribution nationally. We also see major export opportunities and currently are planning export initiatives for California dairy products, especially in Mexico and the Pacific Rim.

Q: How will California be positioned in the future as a major dairy player?

California has the country’s most forward-looking dairy industry. The CMAB was the first commodity group in the United States to develop a long-range strategic plan and we are now beginning our third five-year plan. We recently reported to our industry that we met or exceeded every objective in the first two plans.

In the early ’80s, the CMAB hired Stanford Research Institute to help our industry plan a course for the future and their analysis helped to create the world class dairy and cheese industries we have today. We recently retained McKinsey & Co. to provide a fresh look at our industry and its future, and they have come back with a thorough analysis and recommendations that give us a clear understanding of both the challenges and opportunities facing our industry.

California is a national dairy leader and will continue to expand this role in the future. Today, California produces about a fifth of the nation’s milk supply and a quarter of its cheese supply. U.S. consumers are increasingly looking to California for high quality dairy products, and we will continue to expand this national effort. As noted, we also are expanding export initiatives for California cheese, butter and ice cream.

We also have enjoyed great success in the pizza industry, which is very important to us because California is the country’s leading supplier of mozzarella cheese. We now distribute and promote our California cheese products to major pizza distributors and restaurants nationwide.