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Dairies Moving Out of Inland Empire

Housing developers are paying top dollar for land to farmers, many of whom are relocating their herds north to the San Joaquin Valley.

January 09, 2006|Jerry Hirsch | Times Staff Writer

Once home to one of the nation's largest concentrations of dairy farms, the Inland Empire's $500-million dairy industry is rapidly evaporating as dozens of farmers sell out to real estate developers.

In the last two years, more than 160 dairies -- nearly 80% of those operating just a year ago -- have either been sold or are in escrow, according to the Milk Producers Council, a trade association based in Chino.

The industry could be virtually gone within five years. The pace of sales has accelerated as land values in the region have soared.

"There is not a dairy left that has not had a significant number of developers knocking on the door trying to buy it," said Randall Lewis, executive vice president of Lewis Operating Corp., a developer in Upland.

The dairy lands of San Bernardino and Riverside counties make up some of the largest undeveloped tracts in metropolitan Southern California.

Developers are offering $400,000 to $500,000 an acre, and sometimes more, for land farmers purchased decades ago at just a fraction of that price. Five years ago, the same land sold for $50,000 to $100,000 an acre, Lewis said.

"The money is in the land, not the cows," said dairy farmer Jean Gastelluberry, who purchased his first 20 acres of pasture in Ontario 36 years ago for $160,000.

To be sure, farmers fleeing urban sprawl is nothing new.

"People and cows don't mix," said longtime dairyman Bill Van Leeuwen.

But the speed with which the milk industry is leaving the region -- turbocharged by large jumps in land values in recent years -- is surprising even to longtime area dairymen such as Van Leeuwen.

And unlike previous cycles, dairy farming is leaving Southern California for good as milk producers move to Fresno, Kern, Kings and Tulare counties, and even as far as New Mexico and North Texas.

Open land, the proximity of large, milk-hungry cheese and ice cream plants in the San Joaquin Valley and the ability to sell off fertilizer to crop farmers have turned those counties into the nation's milk shed.

In Ontario, Gastelluberry spends $240,000 annually to have the manure from his 2,500-cow herd hauled away because there are no nearby farms that can use the waste.

"We have lost 41% of our Southern California milk in the last three years," said Gary Korsmeier, chief executive of Artesia-based California Dairies Inc., a farmer-owned cooperative that markets almost half of the milk produced in the state.

That milk is being replaced by shipments from the growing dairies in the San Joaquin Valley, he said. But because of the way milk prices are regulated in California, the northward shift in production isn't expected to add to the wholesale price of milk, he said.

Most of the Inland Empire dairymen are the descendants of Dutch and Basque immigrants who settled in what is now Cerritos, Artesia and Paramount starting in the 1920s. Almost five decades ago, a younger generation started the migration to the Inland Empire as the last pastures in Los Angeles County gave way to housing tracts, shopping centers and, later, auto malls.

There still are dozens of dairies with names such as D&S Vander Schaaf Dairy -- a windmill and two statues of kissing Dutch children decorate the entrance -- and Rioseco Dairy lining either side of Schaefer Avenue as it heads east from Chino into Ontario.

Hundreds of black-and-white Holsteins jostle each other almost up to the street and many of the farms have signs hanging out front offering "Free Fertilizer."

For residents new to the area, it is impossible to miss the presence of the dairy industry. The smell of manure hangs in the air. On Riverside Drive in Ontario, residents looking out the windows of their stucco homes see Holsteins across the street. Errant shots on goal by soccer players at Colony High School have a good chance of hitting cows at the dairy next door.

At one point in the late 1980s about 400 dairies called San Bernardino County home, making it the largest milk producing county in the nation, said Nathan de Boom, the Milk Producers Council's chief of staff.

The Van Leeuwen family illustrates the generational trek to the Inland Empire.

Bill Van Leeuwen's grandfather moved to Paramount from the Netherlands in the late 1920s, opening a small dairy where he milked 60 cows by hand each day.

The next generation purchased 17 acres in Norwalk in 1945 where Bill Van Leeuwen helped his father care for a herd of 180 cows, and the family had upgraded to mechanical milking. The family's milk was sold to the old Arden Farms brand.

But the post-World War II building boom made Van Leeuwen's father feel fenced in and he sold the dairy land for $17,000 and moved to Chino in 1957.

Two decades later and another move, Bill Van Leeuwen went out on his own, purchasing 131 acres in the Eastvale area of Riverside County, where he milked 1,600 cows. But as land values rose, the family saw yet another opportunity to sell and expand. Van Leeuwen sold 40 acres to a developer two years ago for more than $10 million.

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