California ‘floor price’ petition denied

The California Department of Food and Agriculture (CDFA) denied a request for an emergency public hearing on a proposal to set a floor price of $14.50/cwt. for California dairy farmers.

In a letter to John Rossi, of the California Floor Price Committee, Kevin Masuhara, director of CDFA’s Division of Marketing Services, said the proposal’s request for a two-year floor price of $14.50/cwt. “would result in prices that are not in a reasonable and sound economic relationship with the national value of manufactured milk products,” as required by the state’s Food and Agricultural Code.

California Floor Price Committee petitioned CDFA on Aug. 13, requesting the emergency hearing on a proposal to set a floor price on milk components used in determining minimum monthly milk prices. Those changes would have resulted in a California order minimum milk floor price of $14.50/cwt. The California Floor Price Committee proposed a minimum two-year duration for implementation, giving the state’s dairy producers time to recover equity lost during the past two years.

According to USDA, California farmers received an “all milk” price of about $11.50/cwt in 2009. Through the first seven months of 2010, the California price has averaged about $14.14/cwt.

The California Floor Price Committee previously submitted a similar request on June 29. However, CDFA said that request was invalid because it lacked appropriate supporting language and relevant data.

The Aug. 13 request also proposed consideration of a “Compensatory Payment Program” – essentially an import tariff – which would require milk and milk products produced outside California to be sold at a price at least equal to prices paid to California dairy producers. In his letter, Masuhara said CDFA had no authority to implement such a program.

The petition and response, as well as related information and producer letters, can be found at  www.cdfa.ca.gov/dairy/dairy_Petition_Received.html.

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