Dairy and Dairy Processing

An Overview of a Humboldt County Industry Cluster

Brett Benson, Intern to Professor Steven Hackett

August 2002

Sources:

California Employment Development Department

Humboldt Creamery

Elements of the Dairy Industry Cluster:

SIC Code 0241: (DAIRY FARMS)

SIC Code 2022: (CHEESE, NATURAL AND PROCESSED)

SIC Code 2024: (ICE CREAM AND FROZEN DESSERTS)

SIC Code 2026: (FLUID MILK)

Industry Cluster Overview:

The Dairy industry is well established and is a major contributor to our local economy. Although total employment in this industry has stayed about the same at around 300 workers, average earnings have risen in a regular fashion. Between 1991 and 2000, average earnings rose by nearly 64% from $14,729 to $24,000. In constant 1991 dollars, average 2000 earnings were $18,933, indicating that on average, dairy workers' incomes more than kept pace with consumer inflation.

The Dairy industry has helped to give our community its distinctive character as well. All the ranching, roping, and farming creates common values and beliefs in both community and the great outdoors. It is in this environment that strong sub-industries have developed as well. Feed stores, veterinary clinics, and other agriculturally based businesses have become common components of our community.

The Dairy industry extends beyond just the production of milk. However, most of the sub-industries depend heavily on the vitality of the dairies themselves. This becomes an important factor to consider when major swings in the price of milk are a common occurrence that have caused many smaller dairies to go out of business in recent years.

When milk prices are down all other sub-industries have to suffer as well. Sometimes when money gets too tight local businesses may have to deny service to some of their best customers.

The boom-and-bust characteristics of this industry may be alleviated in part if other industries were able to use some of the infrastructure primarily devoted to livestock and other ranching activities. For example, the tourism industry might be able to develop livestock ranches as tourist attractions, such as a dude ranch. This type of sharing and expansion of local goods and services could provide relief when milk prices take a dive.

Finally, our local agricultural base acts as a shield against potential over-development. The preservation of open-space is one of the industries’ extra benefits.

Even though other industries may grow up around the Dairy industry, hopefully it will remain vibrant enough to protect our precious open-space. Sustainable practices can be developed in order to help safeguard the local environment, local industry, and local economy.

Examples of Products and Services

·Milk

·Cheese

·Butter

Key Issues

·Organic milk regulation

·Fuel Prices

·Affordable feed and transportation

·Development of sustainable practices

·Development of energy technologies such as solar and wind

Potential Future Opportunities

·Keep small farms going

·Conserve open-space

·Development of sustainable practices

·Articulation with other industries

·Technology sharing

·Development of energy technologies such as solar and wind

Industry Needs

·Sub-industry support

·Articulation with other industries

·Efficient and effective regulations and processes