Los Angeles dairy industrialization

Review of Dairy Industrialization in the First Place: Urbanization, Immigration and Political Economy in Los Angeles, by Jess Gilbert and Kevin Wehr, Rural Sociology, 2003
Thanks to the century-long special relationship between the University of California and California agribusiness, Californians are basically as innocent of knowledge of American rural sociology as they are of Uighar oral poetry. Although Wehr was born in Oakland, he had to travel to the University of Wisconsin, where Gilbert teaches, to study rural sociology and only got his PhD the year this article was published. So, from the beginning, there is a political aspect to this study: it could be and was done out of University of Wisconsin, in the second largest dairy state in the nation; Californiaovertook Wisconsin for the crown in 1994.
"Diary Industrialization in the First Place" is an historical account of the first time and place this form of agribusiness occurred, among Dutch dairymen in Los Angeles County. The authors assert their independence from previous academic works on the subject dairy industrialization by their emphasis on time and place, no doubt unconsciously emulating the "espacio-temporal" theory employed successfully by El colegio de la frontera norte in its research into the history and development of Tijuana and other Mexican border towns beginning in the late 1970s.
Gilbert and Wehr begin with the questions where and when did industrial dairies first occur and how were they enabled? It has been a vital question for the last 40 years for any resident of the San Joaquin Valley who wants to understand his or her political economy; it has become a critical question since the beginning of 2009 as dairy prices have sunk and feed and fuel have skyrocketed putting the most productive dairy region inthe nation in an historical economic jam.
Gilbert and Wehr found that dairies first industrialized in Los Angeles County between 1930 adn 1960. Dutch dairymen arrived in the 1920s with "essential cultural and technological resources" and rapid urbanization and constantly rising real estate values capitalized dairy industrialization.
From 1925 until 1965 Los Angeles County was the leading dairy county in the nation, and for most of that time was one of the nation's most populous and fastest-growing counties. Every 20 years or so, LA County doubled in population and in dairy cows. The largest county in agricultural sales until the 1950s, after WWII LA County had the largest hay and one of the largest cow markets in the world. In this situation, more peculiar the more you think about it, LA County dairymen developed a new style of dairying, "drylotdairying," concentrating a lot of cows on small acreage, purchasing all feed, which was brought to the cows rather than having them graze on pasture. Drylot dairies quickly developed extremely large herds, "cutting-edge technology," were dependent on large amounts of hired labor, a combined style that produced what the LA Chamber of Commerce called "milk factories."
In 1910, the City of Los Angeles was 85 square miles; but 1920 it was 362 square miles. Part of the reason for the low-density sprawl was that LA engulfed many little village city halls in its path and spread out to inhabit these local administrative units. The bulk of the early migration to LA was from the United States. Spurred by Depression and the Dust Bowl, many migrated to the largest agricultural county in the nation for farmwork, but, as the war developed, ended up in war industries, the third leg of the economic stool of LA, along with agriculture and entertainment. The rapid rise in population encouraged milk production. Meanwhile, as population expanded, NIMBYism (Not In My BackYard played out, causing a concentration of dairies in certain areas. There is just something about a dairy, particularly a drylot dairy, that makes it difficult for the realtor to sell the new tract house. But dairymen could always sell out to the developers, at considerable profit, and reinvest in his next dairy somewhat farther outof town.
An interesting perspective is provided by a dramatic increase in average herd size between 1927 and 1930 -- from 29 to 51 cows. Fifty-one cows was considered very large by prevailing standards. Productivity per cow also raised due to better breeding stock, cow testing and better feed. A campaign against tuberculosis closed many of the smaller LA dairies in the laste 1920s, adding to the impetus for larger, more specialized dairies.
Drylot dairying was mainly a contribution of Dutch immigrants in the early 1920s to LA, largely from Freisland, where Dutch dairymen, for lack of pasture land, were already using this technique. An economic decline in Freisland pushed young Dutch dairymen to LA, where milker wages were excellent and within a few years they were able to start small milk herds of their own on drylots. The Dutch were also attracted by the familiar terrain, "low, flat, and near the ocean," and enjoyed the non-North Sea weather.
It was soon noted that cows on drylot out-produced pasture-fed herds and with bi-products from other major commodities grown in the area, it turned out to be cheaper to feed cows than to graze them. The innovation of Southern California dairies was not, per se, drylot feeding, already used in Europe, but in the size of the herds.
The Dutch tended to settle in southeast LA County, in towns like Paramount, Bellflower, and Artesia, where, along with their dairies, they built their churches, private schools for their children and even an ice rink. The sociologists remark that the Dutch wanted to establish dairying as "a way of life." In fact, it is a way of life, and a very strenuous one that requires all the cultural support it can get.
Noting that the LA cows were producing higher than the national average, the milk press began to tout their techniques. By 1930, it became something of a realtor pitch that LA County produced its milk (30 percent of it) in its own "backyard," on the borders of Orange, Riverside and San Bernardino counties.

The Depression was ugly. Fluid milk sales dropped Various processor schemes to lower prices for both producers and consumers eventually led to the "Milk Wars" of the 1930s, which resulted in more concentration as broke dairies sold their cows at auction to larger competitors. In the Milk Wars, some dairymen went to direct sales, retailers slashed prices to lure more customers and processors squeezed the dairies. Finally, everybody was hurt and producers and distributors appealed to the governor, who assigned the task to the state Department of Agriculture. A commission of producers and distributors agreed on a standard wholesale price but doubts arose about its enforcement and price-cutting continued through 1933.
The federal Agricultural Adjustment Act was passed in 1933. The state thought it now had a basis for an enforceable federal milk marketing order. Certain distributors disagreed and sued to prevent the state joining the federal order. Federal lawyers agreed with the distributors that California milk prices were a local matter. In 1935, the state Farm Bureau successfully supported the state Young Act, which, basically following the federal order, stabilized milk prices at a profitably level for dairymen. This situation was intolerable for distributors who got the Legislature to pass the Desmond Act in 1937, guaranteeing a profitable price for distributors from retailers. Together, the two state acts ended the milk-price wars.
With a premium now paid for the highest quality fluid milk, dairymen improved their technology: milking machines, stainless steel tanks, tiled milking rooms, which eventually came to look more like hospital rooms than the old milking barns. As war industries took off, LA County's population increased and dairies increased production and state-supported prices increased dairy profits.
Some numbers from after WWII: average US cow production, 200 pounds butterfat per day; California average, 280 pounds; LA County, 400; Artesia, 480.
Dairymen throughout LA County after the war faced expanding urbanization and the ability to expand their herds. Many sold at "incredibly high prices" and relocated to the southeast corner of the county (Artesia), bought larger herds, new facilities, and large houses. The area offered cultural, political-economic and environmental advantages.
Culturally, the established Dutch Reformed churches, private schools and the ice rink (now called the East West Ice Palace) were attractive to Dutch dairymen.
Economies of scale were attractive: bulk delivery of hay and gray, faster milk collection, numerous veterinarians, feed companies, cattle brokers, supply stores, and "specialized financial institutions." The invention of the tanker truck was very important but was only economical in areas of great dairy concentration. Politically, the concentration of producers offered the best defense against urban complaints.
Environmentally, southeast LA County had more groundwater and cooler summer temperatures.
Drylot dairying requires huge quantities of water for cleaning and waste disposal. Also the land was cheaper because it is subject to flooding.
Soon, southeast LA County contained the largest number of cows and the richest dairymen in the world. Between 1930 and 1950, the number of dairies declined by 42 percent and the number of cows increased by 77 percent, average herd size going from 51 to 154 cows. It is important to note that this increase was driven by huge profits in real estate sales as dairies relocated in the southeast part of the county, after selled to the developers.
This can be considered the first period of urbanization, relocation and expansion of the LA County dairy industry. Two more would follow.
Attempting to stave off urbanization in the southeast, the dairymen created three "Dairy Cities," the largest of which was Dairy Valley (home of Joe Gonsalves, who, as a state legislator, sponsored the 1965 revision of the state milk order).
However, due to later waves of urbanization, in the 1960s LA County cows decreased from 90,000 to 40,000 and the number of dairies decreased between 1966 and 1972 from 290 to 75. Meanwhile, Chino, in neighboring San Bernardino County boomed, as the number of dairies increased from 99 to 225 in the Fifties and increasing much more since. One factor was that processors favored dairies closer to the city, which Chino is comparted with Artesia.
The authors offer an exemplary case: a dairyman bought a 12-acre dairy in Artesia in 1950 for $12,000; he sold it to developers for $300,000; he bought 30 acres in Dairy Valley (now Cerritos), which he sold to developers in 1970 for $1.5 million and moved to Chino.
We are left in suspense about how much he sold his Chino dairy for in the 1990s and how many acres and how many cows he may have bought in the San Joaquin Valley.
The authors of "Review of Dairy Industrialization in the First Place: Urbanization, Immigration and Political Economy in Los Angeles" wish to emphasis one point, often confused by state and university extension programs and industry publications: the dairy industrialization was not just a ring on the finger of the Invisible Hand of the Free Market; it arose in a certain place at a certain time for local reasons. And it's still going on. It has been noted, for example, that the increase in milk production in California, which surpassed Wisconsin as the top dairy state in the mid-1990s, can be accounted for largely in terms of the rising prices of Southern California real estate -- something anecdotally obvious when one observes the new mega-dairies in the San Joaquin Valley -- we see that real estate sales, along with IRS tax code section 1031, have driven certain counties in California to great leadership in milk production and, today, to great economic peril because of it, as prices stay well below costs of production and there is no recapitalization to be found in a speculative real estate bubble that has popped. This is particularly critical for Merced County, second largest producer in the nation, because it is also one of the top foreclosure-rate counties in the nation.
It also raises a question about the Valley's "indigenous" dairies, that have not recently had a great infusion of cash from a real estate sale in Chino. Given the catastrophic prices in the last six months, it can be speculated that any dairy without deep pockets is in deep economic peril at the moment.
Watching California and federal milk pricing at the moment, one can speculate that the "regulatory" functions of government, established to allow all segments of the industry to prosper, have fallen into the hands of the largest players to the misery of the milk producers. While some degree of this is not new, the present situation has a drastic edge.
However, the California dairy industry does not enjoy much public support. It is perceived, in general, as rich, arrogant, politically slick and aggressive, its public generosity (when it occurs) is not well known, and some of its leaders (Hilmar Cheese Co. for example) have been serial violators of environmental law.