2016 California Cost of Milk Production Annual Available

Dan Dairy & Livestock, Industry News Release

California’s Dairy Industry in 2016

cost milk production californiaThe California Dairy Statistics Annual for 2016 reported total milk production was down 1.1 percent, compared to the previous year, the number of dairy cows declined 0.6 percent, milk per cow was down 0.5 percent, and the number of dairies decreased by 3.2 percent. The twelve month average price paid to California producers for farm milk in 2016 was $15.03 per hundredweight (cwt.), which represents a drop of 2.4 percent from the previous year.

Milk Production

California milk production decreased each month through the first three quarters of 2016, compared to the same month in the previous year, and adjusting for leap day in February. However, milk production during the fourth quarter increased each month compared the same month in 2015. Total milk production for 2016 was 40.4 billion pounds, which is 429.6 million pounds less than the previous year. The five leading milk producing counties (Tulare, Merced, Kings, Stanislaus, and Kern) accounted for 72.4 percent of the state’s total milk production in 2016. Grade B milk production in 2016 recorded an increase of 73.1 percent (334.4 million more pounds), when compared to 2015. Milk production per cow in 2016 was estimated at 23,265 pounds and the total number of cows in the state was estimated to be 1.738 million.


In 2016, pooled milk utilized in the production of butter and dried milk products (Class 4a) increased slightly to 32.3 percent (from 32.1 percent in 2015). The percentage of pooled milk going into the production of cheese and whey products (Class 4b) also increased slightly to 46.4 percent (from 46.3 percent in 2015). In comparison to 2015, California butter production decreased by 3.0 percent, nonfat dry milk (for human consumption) production decreased by 19.2 percent, while the production of other dry milk products increased by 36.5 percent. California total cheese production hit a record high in 2016, logging an overall increase of 3.3 percent compared to 2015. For the top three cheeses produced in the state, compared to 2015, Mozzarella production increased by 4.5 percent, Cheddar production decreased by 4.2 percent, and Monterey Jack production increased by 4.1 percent. In 2016, utilization of pooled milk for Class 1 (fluid milk) products remained relatively unchanged at 13.0 percent compared to 2015. Whole milk sales increased in 2016, while reduced fat, lowfat, and skim milk sales decreased compared to 2015. Half-and-half sales remained constant in 2016 compared to the previous year. As a whole, Class 1 sales continued to decline in 2016, recording an overall decrease of 3.1 percent compared to 2015.

Milk Prices

During the first part of 2016, the milk price was depressed, as the overall supply of milk on a national and global level outpaced the demand for dairy products. During the latter part of the year, milk prices strengthened as the supply of milk in most key dairy export regions began to contract, with the exception of the U.S. In California, the annual average price paid to producers for farm milk in 2016 was $15.03/cwt., with the lowest average monthly price occurring in May at $12.89/cwt. and the highest average monthly price occurring in December at $17.55/ cwt.

Read the full 2016 California Cost of Milk Production Annual.