Variation in Environmental Regulations in California and Effects on Dairy Location

In recent decades, urban encroachment and increasing environmental regulation have impacted California’s dairy industry. A complicated set of environmental legislation affects dairies in the state, and can differ depending on location, creating the possibility for within-state pollution havens. This article details the regional, state, and federal environmental regulation of California’s dairy industry, and examines data to see if it matches a hypothesis of regulation affecting dairy location. Using county-year data, we show evidence of changing dairy location within the state matching times of local legislative action. The Central Valley gained production, while the more regulated and urban-affected Los Angeles area lost. Large dairies have increased by 150 percent in the Central Valley, even as the number of small farms in the region declined by 40 percent. More rigorous analysis is necessary to discern the relative impacts of land prices and regulation on dairy location.