Dairy farmers in California, the nation’s top milk producer, face pressure from rising costs, increasingly complex environmental regulations and a quest for water—challenges all magnified by a historic drought. For some, the challenges are existential.

In the north coast, home to the state’s small, organic dairy farms, shrunken reservoirs and shriveled pastures pushed some farmers to the brink earlier this year. In the San Joaquin Valley—a vast agricultural region in the center of the state where 90% of California’s milk is produced—farmers are paying more for cow feed and water, driving up the cost of producing a gallon of milk.