A Brief Look at the Arizona Dairy Industry

The Arizona Dairy industry has shown strong growth in recent years—4.7% per year since 1990. The number of cows have doubled and milk yield per cow has risen by 25%. Taken together with a 60% reduction of dairy farms, the figures indicate substantial structural changes and concentration in the dairy sector, which is described in the report. Milk processing industries owe their location in Arizona to in-state milk production; a significant share of slaughter-house activity is based on animals from dairy herds, and many supply industries are directly linked with the dairy sector. These dependent industries buy inputs from other businesses, and so on, effects spreading like rings in water. For 2007, the applied input-output model shows that the activity in the combined agro-industrial complex of dairy farms and directly linked processing and supply industries is matched by just about the same derived activity in other parts of the Arizona economy, both in terms of value-added and employment.


Trent L. Teegerstrom and Jorgen R. Mortensen

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