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California’s dairy industry contributed $23.2 billion to the state’s gross domestic product in 2024 and supported more than 150,000 jobs, according to a new University of California, Davis study.

The report from UC Davis’ Department of Agricultural and Resource Economics reveals dairy farming and processing generated direct, indirect and induced economic output of around $87.5 billion in sales last year. The California Milk Advisory Board funded the study.

“California dairy remains an essential economic engine for the state and a source of livelihood for tens of thousands of families,” said Bob Carroll, CEO of the California Milk Advisory Board. “From family farms to world-class processing facilities, every link in the supply chain helps fuel economic vitality, providing nutritious, sustainable dairy products enjoyed here and around the world.”

Dairy dominates agriculture

The dairy industry stands as California’s largest agricultural sector. In Fresno County — the nation’s No. 1 farm county — dairy accounts for nearly half of farm sales recorded in 2024.

In Fresno, Kings, Madera and Tulare counties, milk was the top farm commodity in 2024, with nearly $4 billion in value, according to The Business Journal’s Agricultural Commodities list published Nov. 7.

Fresno County agriculture’s total economic impact reached $21.66 billion in 2023, supporting about 108,000 jobs, or one in nine jobs countywide, according to a recent economic impact report presented to the Fresno County Board of Supervisors.

The UC Davis study shows California has led the nation in milk production since 1993, accounting for about 18% of all U.S. milk. Nearly all milk produced in the state is processed locally into products including fluid milk, cheese, butter, whey, milk powders and ice cream.

Key economic findings

The dairy industry’s contribution to California’s GDP increased from $22.6 billion in 2023 to $23.2 billion in 2024. The sector supported 151,859 total jobs statewide through dairy farming and processing.

Farm milk value reached $9 billion in 2024, while processed dairy products totaled $29.1 billion, according to the study titled “Contributions of the California Dairy Industry to the California Economy, 2023 and 2024.”

The report highlights how dairy supports related sectors including feed production, packaging, logistics, energy and retail.

“Each dollar generated by California dairy ripples through communities—from local feed suppliers and truckers to teachers, retailers, and service providers,” said Carroll. “Dairy is a cornerstone of California’s economy, sustainability leadership, and culture.”

Challenges and innovation

Despite market fluctuations, inflation and H5N1-related challenges in 2024, California’s dairy sector continues to lead in innovation, efficiency and environmental stewardship, with growing focus on renewable energy adoption.

The study notes farmers are producing more milk using fewer resources, while processors expand global trade opportunities.