(Nat sot of chef giving instruction to group)
 
NARR: DAVIS WEI WORKS AS A CHEESE BUYER FOR THE LARGEST PIZZA CHAIN IN CHINA.
 
WEI (m6)
I definitely like dairy. I’m very passionate about it.  Just look at my figure and you can tell that I really love this type of food.
 
NARR: WEI IS HERE ON A TOUR OF THE STATE’S DAIRY INDUSTRY, ORGANIZED BY THE CALIFORNIA MILK ADVISORY BOARD TO DRUM UP BUSINESS….
 
NARR:  ROSS CHRISTIESON HEADS UP THE ORGANIZATION’S INTERNATIONAL EFFORTS, AND HE’S BULLISH ON MILK’S FUTURE.
 
Ross Christieson  (m9)
If you take a global view of the dairy market, there’s actually a shortage of milk around the world.  // (m8)  we know a lot of these markets in China will grow 10 or 20 fold over the next few decades.  By being there now, we can be at the start of that growth.
 
MILK PRODUCTION IS A NEARLY 8 BILLION DOLLAR BUSINESS IN CALIFORNIA[1], AND THE STATE IS THE COUNTRY’S LARGEST PRODUCER.  BUT THE BUSINESS IS CHANGING AND THAT’S RAISED A HOST OF ECONOMIC AND ENVIRONMENTAL ISSUES.

TO SOME, CHINA LOOKS LIKE A GREAT NEW MARKET FOR MILK, TO OTHERS
IT’S A SYMBOL OF WHAT’S WRONG WITH THE OLD WAY OF DOING BUSINESS.

FOR ONE THING, CALIFORNIA DAIRIES HAVE BEEN GOING BANKRUPT.
 RAY SOUZA HAS BEEN PRODUCING MILK IN TURLOCK, CA FOR OVER 30 YEARS, AND MANAGES HERD OF ABOUT 900 HOLSTEIN COWS.
 
NARR: BUT HE’S WORRIED,  NEARLY 300 DAIRIES IN CALIFORNIA HAVE GONE OUT OF BUSINESS IN THE LAST 5 YRS.[2]  INCLUDING 3 OF HIS NEIGHBORS.
 
Ray Souza (m14)
The farm to the south of me, // was seized by the bank and I happened to witness that.
 
Ray Souza (m30)
This was a functioning biz.  The dairy family had been here for years and years and years.  //.  Father, mother, children were here in the daily operation of the dairy.  But it’s one of those things where feed costs got high, // and thru no fault of their own, they were not able to sustain the business.
 
NARR: THE PROBLEM IS THE COST OF GRAINS LIKE CORN AND SOY WHICH ARE USED IN DAIRY FEED, HAS REACHED RECORD HIGHS.   
 
My corn costs, which is a primary source of energy for dairy cows, is darn near tripled in the last five years.
 
NARR: WHY? .... SUPPLIES ARE TIGHT DUE TO AN INCREASED DEMAND FOR EXPORTED GRAIN, THE USE OF CORN TO MAKE BIOFUEL, AND A DROUGHT IN THE MIDWEST.
 
NARR: FEED PRICES HAVE AFFECTED DAIRIES ACROSS THE COUNTRY, BUT CALIFORNIA WAS PARTICULARLY HARD HIT.
 
NARR: BILL SCHIECK IS AN ECONOMIST AT THE DAIRY INSTITUTE OF CALIFORNIA.
 
Bill Schieck, (m2)
In CA, the traditional model of production has been one where you bring in, you purchase feed from the rest of the country and transport that to CA and feed that to dairy cows, and its a very specialized operation
 
NARR: BY IMPORTING CHEAP FEED GRAINS FROM THE MIDWEST INSTEAD OF GROWING THEM ON THE FARM AS DAIRIES IN OTHER STATES DO, CALIFORNIA PRODUCERS ARE ABLE TO RAISE MORE COWS AND PRODUCE MORE MILK ON SMALLER PARCELS OF LAND.  IT’S A MODEL THAT WORKED WHEN GRAIN WAS CHEAP.[3]
 
Bill Schieck (m9)
I don’t know that we’re going to see those kind of prices return again. // There’s simply too much demand for feed in the world today.
 
NARR:  WHILE FEED COSTS HAVE GONE UP, THE PRICE OF MILK, WHICH IS CONTROLLED BY THE STATE, HAS LAGGED.
 
NARR: HISTORICALLY, CALIFORNIA DAIRY PRODUCERS HAVE COPED WITH LOW PRICES BY INCREASING PRODUCTION AND SELLING MORE MILK….SO DESPITE THE LOSS OF HUNDREDS OF DAIRY FARMS, MILK PRODUCTION IN THE STATE HAS NEVER BEEN HIGHER, SAYS DAN PUTNAM, A FORAGE EXPERT AT THE UNIVERSITY OF CALIFORNIA DAVIS.

 
Dan Putnam, (m22)
We’ve increased production per cow at about 2 to 2.2 percent per year relentlessly for about 30 years in CA, and that even continues today. And so what that does is it creates a real problem for the dairy producer in the sense that a couple of years goes by and they have another 5% more milk they have to figure out how to market.
 
NARR:  SO WHO’S GOING TO BUY ALL THIS MILK?
 
NARR:  REMEMBER MR. WEI, THE CHEESE BUYER FOR A CHINESE PIZZA CHAIN?  HE’S PART OF A GROWING MIDDLE CLASS IN CHINA , WHO, AS INCOMES RISE, ARE CONSUMING HIGHER PROTEIN DIETS, INCLUDING MORE DAIRY.
 
IN FACT MILK CONSUMPTION IN CHINA HAS TRIPLED IN THE LAST DECADE, AND CHINESE MILK PRODUCERS ARE DESPERATE TO RAMP UP.   RECENTLY, LEADING CHINESE DAIRIES CAME TO THE WORLD AG EXPO IN TULARE, CA, TO ACQUIRE THE LATEST TECHNOLOGY.
 
LEON SUN IS WITH THE SHANGHAI DAIRY GROUP.
 
Leon Sun (m3)  lower third: Leon Sun, Shanghai Dairy Group
Our main priority in this World Ag Expo is trying to expose ourselves to world dairy business, including feed suppliers like alfalfa suppliers. So we have to fill in the gaps very quickly. Everything that we can absorb and import into the China dairy and boost production, and revolutionize everything.
 
NARR: THE SHANGHAI DAIRY GROUP IS ALSO HERE TO IMPORT ALFALFA HAY, A HIGH PROTEIN FEED SUPPLEMENT THAT WILL BOOST MILK PRODUCTION FOR COWS IN CHINA.
 
Dan Putnam (m14)
They now have fairly large dairies outside the major cities // in China.  And many of these dairies are every bit as modern and advanced as western dairies // And they are rapidly learning how to increase milk production per animal // but a key missing ingredient is high quality forage crops.
 
 
NARR: ALFALFA IS CALIFORNIA’S LARGEST ACREAGE CROP AND ALSO ONE OF THE MOST WATER-INTENSIVE.....USING ABOUT A FIFTH OF THE STATE’S PRECIOUS WATER. [4]
 
NARR: DESPITE CHINA’S LAND MASS, IT HAS A SHORTAGE OF WATER AND ARABLE LAND , SO A FEW YEARS AGO CHINESE DAIRY PRODUCERS BEGAN BUYING ALFALFA FROM CALIFORNIA AND OTHER WESTERN STATES.  

Dan Putnam (m20)
Exports to China are definitely increasing.  we’ve seen a pretty dramatic rise since the year 2005, 2006, and I think all expectations are that it will probably increase again this coming year.
 
NARR:  NOT EVERYONE IS EAGER TO SEE THAT HAPPEN. CRITICS COMPLAIN THAT CA SHOULD NOT BE SHIPPING ITS VALUABLE WATER SUPPLIES TO CHINA IN THE FORM OF ALFALFA.[5]
 
NARR:  WHAT’S MORE, ENVIRONMENTAL ADVOCATES POINT OUT THAT DAIRIES CAUSE SERIOUS ENVIRONMENTAL DAMAGE, AND QUESTION IF CALIFORNIA SHOULD SUPPORT SUCH A LARGE INDUSTRY, MUCH LESS SEEK TO SUPPLY CHINA.
 
Tom Frantz in car (m9)
here’s some smaller lagoons.  those are manure separators right there. those tilted things.  the piles of manure that are separated are right there.
 
 
NARR: TOM FRANTZ IS AN ALMOND FARMER IN KERN COUNTY, WHO HEADS A GROUP CALLED THE ASSOCIATION OF IRRITATED RESIDENTS, or AIR.

Tom Frantz (m11)
It’s a relatively recent phenomena in the last 20-30 yrs that you see dairies with more than 2000 cows.  i mean the biggest dairy, about 50 miles north of here has 18,000 animals.
 
(Graphic?)
NARR: A 2012 REPORT FROM THE UNIVERSITY OF CALIFORNIA  DAVIS FOUND THAT ONE OF THE LEADING CAUSES OF NITRATE POLLUTION IN GROUNDWATER COMES FROM DAIRY MANURE USED TO FERTILIZE CROPLAND.[6]  

Tom Frantz SOT pointing at pools:
By aerating there, they’re getting ammonia to go up into the air...

NARR: IN ADDITION, ACCORDING TO THE CENTRAL VALLEY’S AIR POLLUTION CONTROL DISTRICT, DAIRIES ARE A MAJOR SOURCE OF POLLUTION IN THE AREA.  FERMENTING DAIRY FEED AND GASES FROM THE COWS THEMSELVES CONTRIBUTE TO OZONE POLLUTION AND GREENHOUSE GASES.[7]
 
NARR:  BRENT NEWELL IS AN ENVIRONMENTAL LAWYER WITH THE CENTER ON RACE, POVERTY AND THE ENVIRONMENT.  

Brent Newell, Environmental lawyer, Center on Race, Poverty, and the Environment (m25)

Already, CA communities are overwhelmed by the amount of air pollution that comes from these facilities, the effect on groundwater is really unacceptable,  // So continuing to produce milk to put on a ship and ship across the Pacific Ocean to China, to satisfy some kind of growing demand in China for dairy products, really makes no sense at all.

IF THE CHINESE CONTINUE TO DEVELOP THEIR OWN INDEPENDENT DAIRY INDUSTRY CALIFORNIA WILL LOSE MUCH OF ITS MARKET FOR SURPLUS MILK… AND CALIFORNIA FARMERS WILL PAY MORE FOR ALFALFA AS EXPORTS TO CHINA DRIVE UP DEMAND.

IN THIS COMPLEX EXCHANGE OF RESOURCES AND MONEY, CHINA MAY WELL END UP THE GLOBAL FOOD INDUSTRY WINNER.