This is the first in a series of brief reports that document the current state of the Wisconsin dairy industry and evaluate factors that will influence its evolution. The series is intended to address a growing concern among Wisconsin dairy industry leaders about the viability of Wisconsin dairying. The concern can be summarized as follows: Wisconsin milk cow numbers have fallen sharply over the last 15 years and, despite increasing milk production per cow, total state milk production has been flat to decreasing since 1988. While Wisconsin milk production has languished, U.S. milk utilization, especially cheese consumption, have shown very strong growth. Despite paying higher prices for cheese milk than plants in the West, where milk production is escalating, Wisconsin cheese makers are finding it increasingly difficult to fill their vats. Some cheese manufacturers have relocated or expanded their operations to regions with an expanding and less expensive milk supply and others have threatened to do so. A significant loss of processing capacity could threaten the entire dairy infrastructure.