Opinions & Sacred Cows: Inactions speak louder than rhetoric
California dairy producers are understandably upset. For the past couple of years, they have been paid well below the Federal Milk Marketing Order (FMMO) minimum price and all efforts by producers to get the California formula adjusted has been far from adequate.
A lot of time and expense for California Department of Food and Agriculture (CDFA) and dairy producer organizations to go through the hearing process and study the issue, failed to bring California’s Class 4b price into alignment with prices being paid by cheese manufacturers around the country. CDFA changes only amounted to about a 10-cent/cwt. increase. How ridiculous was that?
California law states that the CDFA is responsible to calculate prices that are in a “reasonable and sound economic relationship” with what milk is sold for around the country. So when the state failed to fix the problem, Milk Producers Council (MPC), Dairy Farmers of America, Security Milk Producers Association, and California Dairy Campaign brought legal action against CDFA.
Of course cheese manufacturers opposed the hearings because they’ve been cutting a fat hog the last few years at the expense of dairy producers. I would imagine they applauded the CDFA’s formula adjustment.
Rob Vandenheuvel, general manager of MPC, has been quoted in trade publications saying “CDFA is violating the law and rewarding our cheese manufacturers...with a state sponsored discount on the milk they buy...”
Chowchilla, Calif., dairy producer Reis Soares, wrote in her letter to CDFA: “I don’t understand how CDFA can allow this much injustice to continue. The dairy producer pays for the processors’ cost of operating. The dairy producer pays the full cost of producing and hauling the milk to the processor. The processor is able to sell the finished product at a profit yet they don’t have to share with the dairy producer. I fail to understand how such a broken system could continue,” she laments.
Since 2010, the gap between California Class 4b and FMMO Class III has set an ugly trend. In 2008, the gap was only slightly over 50-cents/cwt. In 2009, the gap was about 1/2 that much. But in 2010, the spread was up to $1.24/cwt., and since the beginning of 2011 has been $2/cwt.
According to the legal complaint, the cumulative amount lost by producers was more than $590 million. While California producers never saw that revenue, cheese manufacturers could count it as profit.
Nearly 30 dairies have gone bankrupt in the San Joaquin Valley of California since the first of the year. “How many more dairies will be lost in California,” asks Soares, “and how many more years will dairy producers have to endure instability before CDFA takes responsibility for its role, which is to ensure that California dairy producers have a right to a fair market price on the product they produce?”
I couldn’t have said it any better than that.
It seems like such a simple fix, but some in agriculture in the “Golden State” would contend that those making the decisions at the highest levels of government would prefer dairies close or move out of state. Of course, they wouldn’t say it, but their actions speak louder than their rhetoric.
Have an opinion? E-mail Ron Goble: email@example.com