Craig Caballero is a second-generation dairy farmer and owner of Caballero Dairy Farms in Eloy, Arizona. He grew up on his family’s dairy in Gilbert, Arizona and attended college at Grand Canyon University, where he received his degree in Business. 

After college, Craig played Catcher position in Minor League baseball for the Detroit Tigers and Chicago Cubs. He eventually left baseball and returned to Arizona to follow in his father's footsteps and acquired the family dairy.

With quite disparate 4-H and FFA projects, the Caballeros lived just south of us in Gilbert (though most of my grade-school growing-up years were in Maricopa). And, his older sister, Stephanie, and I were on the Gilbert High School girl's swim team together a few years back, okay, several decades ago. Stephanie was a great diver and I stuck to the four swim strokes. Looking back, our subtle connections contribute to what defines us but often, we don’t appreciate them at the time. The Caballeros, like ours, are big on family, farming and community and I celebrate their contribution to Arizona’s agriculture. 

Since I hung out with the beef community through Lauren Maehling in May for this ongoing conversation series, I thought it only appropriate to give the dairy industry in Arizona a platform. So, below are Craig’s insights on a dynamic and changing agricultural sector in our state. 

Currently, Craig is serving as the Interim CEO and Chairman of United Dairymen of Arizona. He and his wife, Heather, have four children, with Craig supporting their athletic and agricultural involvement.

 

Craig Caballero is serving as the Interim CEO and Chairman of United Dairymen of Arizona. He and his wife, Heather, have four children, with Craig supporting their athletic and agricultural involvement.



Arizona Agriculture: The United Dairymen of Arizona (UDA) is 60+ years old. In your role and reflecting on its past, what do you like to share with others outside of industry about the role of UDA in Arizona and certainly the industry.

Caballero: The United Dairymen of Arizona represents so much more than just a cooperative; it's a crucial pillar of Arizona’s agriculture, economic growth, and public health. We take pride in our substantial contribution, with a direct economic impact of $4.9 billion on the national economy.

Heartfelt thanks go to our founding members, whose visionary efforts and collaboration have established a robust foundation for the future. Their foresight and teamwork deserve all the praise.

Arizona Agriculture: As one of the oldest dairy cooperatives in the country, what do you think has been the organization’s sustainability as a business?

Caballero: Our longevity as one of the oldest dairy cooperatives in the country can largely be attributed to the people at our core. The visionary founders who established our Cooperative also sowed the seeds of a strong and enduring culture. This foundation has been key in fostering a resilient and thriving business.

Coupled with this is our belief in the power of collaboration. We have built and maintained strong partnerships with a multitude of dairy brands, and these relationships are vital to our ongoing success. Working closely with these partners, we've been able to adapt, innovate, and remain a steadfast part of the industry's fabric.

 

Arizona Agriculture: What do you see as the biggest opportunities for the coop and our Arizona dairies? Maybe another way to ask it … what’s the next big thing that will move UDA into its next 60 or 100 years?

Caballero: The biggest opportunities for the co-op and our Arizona dairies lie in embracing innovation and sustainability. As Arizona's population expands, we face the challenge of nourishing an ever-growing number of people on diminishing agricultural land. However, this is also our chance to shine. 

We can look at advancing our practices with cutting-edge technology, figuring out smarter, more water-efficient methods for farming, and developing sustainable feeds for our livestock. Embracing renewable energy sources and reducing waste are also key areas we can tap into.

 

Arizona Agriculture: Talk about the products UDA produces. 

Caballero: The inception of our balancing plant was pivotal for UDA, catapulting our capabilities into a global sphere. By building our balancing plant our founders effectively shattered the constraints imposed by milk's natural perishability. This innovation not only diversified our product range but also expanded our market reach beyond borders.

This diversification into dry dairy ingredients has opened a world of possibilities, allowing us to supply a variety of industries worldwide. Our dry milk is critical in countless applications, from food manufacturing to nutritional products.

  • Current Dried Product List: Nonfat Dry Milk, Skim Milk Powder, Milk Protein Concentrate, Butter, Grade A Buttermilk Powder, Whey Protein Concentrate, Lactose, Lactoferrin
  • Current Fluid Product List (sold via tanker load to bottlers/processors): Fluid Milk, Grade A Condensed Buttermilk, Whey Protein Concentrate Liquid, Condensed Skim, Grade A Sweet Cream

 

Arizona Agriculture: Let’s discuss some numbers. 20 years ago, we had nearly 100 family-owned dairies, now there are much fewer. How has that impacted milk production and what will these numbers mean for the future?

Caballero: Reflecting on our journey, the evolution in our membership numbers from nearly 100 family-owned dairies two decades ago to 36 today significantly underscores the changing landscape of dairy farming. Despite the reduction in the number of member dairies, it's noteworthy that we have successfully maintained our milk production levels. However, it's also true that the impact of losing any dairy today is significantly more profound on our overall production capabilities than in the past. This reality accentuates the need for strategic foresight in managing our production and processing operations to align with demand efficiently.

As we navigate this shift, it becomes imperative to adopt a more calculated approach towards milk production. Ensuring that every aspect of our operation is optimized for efficiency, sustainability, and innovation is crucial. This strategy will not only enable us to sustain our production levels but will also ensure we are well positioned to meet future demand.

 

Arizona Agriculture: It’s not unusual for farms and ranches to go through tough years. The Dairy industry is weathering and economic storm now. How do you persevere through these tougher times?

Caballero: Over the past decade, we've navigated through what can aptly be described as one of the most volatile economic storms in our industry's history. Persevering demands resilience and a multifaceted approach to ensure sustainability and growth.

Central to weathering these challenges is the accumulation of decades of equity. This deep-rooted financial stability acts as a buffer, providing the necessary leeway to navigate through periods of economic uncertainty. It underscores the importance of prudent financial management and long-term strategic planning.

Furthermore, it is crucial to foster strong relationships with business partners and lenders who understand the dairy industry's variability comprehensively.

Additionally, embodying a certain degree of toughness, both emotionally and operationally, cannot be overstated. This resilience – being 'double tough' – equips us to face headwinds with determination.

Arizona Agriculture: There’s an adage in the dairy industry that “Only five people in the world know how milk is priced in the U.S. – and four of them are dead.” Milk pricing regulations in Federal Milk Marketing Orders (FMMO) are among the most complicated commodity pricing regimes across all of agriculture. On top of that our dairies in the west, certainly Arizona, are quite different than in the east and Midwest. Will we ever get to practical parity on pricing? Or how does the UDA see all of this?

Caballero: The pricing of milk within the Federal Milk Marketing Orders (FMMOs) is indeed intricate, and achieving parity across various regions, such as the contrast between dairies in the West compared to those in the East and Midwest, is a complex challenge. The United Dairymen of Arizona recognizes the nuanced nature of these regulations and the distinct characteristics of different markets.

In response to whether there will be a significant shift toward practical parity in pricing, the UDA's stance is realistic, acknowledging that the FMMO system is deeply ingrained in the milk pricing framework and is unlikely to undergo substantial changes in the near term. The organization instead focuses on its proficiency in navigating the specific dynamics of its regional market (Order 131) to effectively manage milk pricing.

 

Arizona Agriculture: What does the USDA and other federal agencies need to do better to support sustainable outcomes in the dairy and other agriculture industries?

Caballero: The USDA and federal agencies can take steps to more equitably support sustainable outcomes across all scales of agriculture, including the dairy industry. One such measure is to ensure that large family farms receive equal treatment to small family farms. This could mean reevaluating the structure of subsidies to avoid placing caps that disproportionately affect larger operations, which are often still family-run businesses.

By creating a more level playing field, federal agencies can help family farms of all sizes invest in sustainable practices, implement modern technologies, and remain competitive and viable in the long term. These adjustments could contribute to a more sustainable and resilient agricultural sector, regardless of farm size.

Arizona Agriculture: We could probably talk about technology improvements in the dairy business all day long. What excites you the most about potential technologies in the dairy industry?

Caballero: The array of emerging technologies in the dairy industry offers huge promise for enhancing efficiency, productivity, and sustainability. From advancements in genomics that enable selective breeding for optimal health and production traits, to artificial intelligence that monitors herd health and automates daily operations, these innovations are revolutionizing how dairy farms operate. The development of technologies that allow us to achieve more with less—less environmental impact, less labor, and less resource consumption—is particularly exciting. Looking ahead, the anticipation of how much more these technologies will evolve and be integrated into the dairy industry over the next five years really excites me.

Arizona Agriculture: At the end of the day, what’s your most important message to your fellow dairy farmers?  Then, when you talk to consumers what do you like to express?

Caballero: To my fellow dairy farmers, the message is clear: our unity and mutual support are more critical now than ever before. In the face of economic fluctuations, regulatory challenges, and the rapid evolution of technology and consumer demands, the strength of our community makes us resilient. 

When speaking to consumers, the emphasis shifts to expressing the vital role their support and understanding play in our industry's sustainability. Our farms are integral to providing a wide array of dairy products that nourish people locally and globally.