California’s dairy industry is in full panic mode, and your grocery bill might be about to feel the pain. Starting next month, a sweeping recycling law called Senate Bill 54 kicks into high gear, forcing companies to foot the bill for packaging waste they create. For the dairy sector, this could mean fees as high as $15 million per company—and those costs will almost certainly get passed straight to you at checkout.
Here’s the core issue: SB 54, passed in 2022 and now being rolled out by CalRecycle, makes manufacturers financially responsible for the environmental impact of their products after they’re tossed in the trash. It sounds fair in theory—why should taxpayers shoulder the cleanup costs for corporate waste? But the dairy industry has a legitimate problem. Most milk, cheese, and dairy products come wrapped in flexible plastic film that can’t be recycled under the law’s standards. By 2032, that packaging will essentially be banned. The trouble is, there’s no viable alternative yet. As Danielle Quist, vice president of regulatory affairs at the International Dairy Foods Association, puts it:“You may not be able to sell cheese. Cheese has to be in a flexible film.”Packaging exists for food safety, not just looks—and the law doesn’t seem to account for that.
Katie Davey, executive director of the Dairy Institute of California, estimates the law will add $1,300 a year to the average household’s grocery costs. CalRecycle’s own estimate is far more optimistic—$57 to $190 annually—but even the state acknowledges prices are going up. The real kicker? Converting a single production line to new packaging could cost a manufacturer $40 million. At that price point, companies will either absorb staggering losses, raise prices dramatically, or pack up and leave California entirely. And if they leave, so do the union manufacturing jobs that come with them.
One bright spot exists: Petaluma’s Straus Family Creamery already uses completely reusable glass containers, returning more than 2.7 million glass milk jugs every year. But that’s a drop in the bucket. Scaling glass bottles across California’s entire dairy system just isn’t practical—not at those conversion costs.
The dairy industry is asking CalRecycle for a five-year delay on some packaging requirements, which might buy time for innovation. But delay or no delay, costs are going up. The law is also facing multiple lawsuits, including one from 17 Republican-led states and another from environmental groups arguing it was watered down during implementation. While those cases work through federal court, SB 54 remains the law of the land—and your milk carton is about to get a lot more expensive.
The question California needs to answer: Is forcing companies to pay for waste worth pricing working families out of dairy products altogether?
About the Author
Andrew Johnson
Andrew Johnson is a contributor to LocalBeat, covering local news and community stories.
