he California dairy industry moved to new ground in 2007 with milk production topping out at over 40 billion pounds (40.6), an increase of 4.8 percent compared to 2006. This record production, driven by both ncreased milk production per cow and an increase in the total cows, all contributed to the state’s dilemma of inadequate plant capacity. The low milk prices of 2006 were a thing of the past by mid-summer 2007, as the average price paid to producers reached $20.45 per hundredweight in July and continued to hover in the $20-range for the rest of 2007. As the prices dairy producers received soared, so did the cost of feed and fuel throughout the state.