The Dairy Marketing Branch, Cost of Production Unit (COP) is pleased to present the eleventh edition of the California Cost of Production Annual Summary. The 2007 Cost of Milk Production Annual Summary includes information vital to the California dairy industry. Producers need as many tools as possible to make sound management decisions, and the information in this summary provides some of these tools. Under the California Food and Agricultural Code 62062, the Department of Food and Agriculture (Department) must consider the cost of producing market milk in determining appropriate minimum prices. Notwithstanding the legislative decree, the Department has a more direct need for the cost studies as a result of the end-product pricing formulas used to establish milk prices.