California Class 4b petition resubmitted; legislation introduced

Efforts to get the California Department of Food and Agriculture (CDFA) to address the state's Class 4b milk pricing formula moved forward on two fronts.

California Dairies, Inc. (CDI), Dairy Farmers of America – Western Area Council (DFA) and Land O’Lakes, Inc. (LOL) resubmitted a petition to CDFA requesting an emergency public hearing to consider a change to the Class 4b pricing formula. As in a previous petition, this one seeks modifications to the sliding scale that translates market prices for dry whey into higher monetary contributions to the California Class 4b price. 

“This change to the Class 4b milk pricing formula would remain in place for six months to give our members the milk price relief they desperately need,” the petition said. “Economic relief is needed, but in order for the Secretary to act on behalf of suffering dairymen in California, a public hearing must be called.” To download the petition, please click here.

Also this week, Assembly Bill 31, a bill introduced in the California Legislature by Assemblyman Dr. Richard Pan (D-Sacramento), would more closely align the whey value in the California 4b formula with the regulated minimum price for whey found in federal orders. With language developed by Western United Dairymen (WUD), the legislation follows up on the WUD board’s action in October directing staff to develop language addressing the whey value issue and securing bipartisan support to successfully advance the bill in the California legislature.

 

The bill would provide a specific formula that the state ag secretary would be required to use to establish the price for class 4b milk. It includes a dry whey value factor that is no less than 80% of the dry whey value used in federal milk marketing orders in establishing minimum producer prices. 

To address smaller cheese manufacturers, each handler’s plant in California that purchases milk for class 4b utilization would be allowed deduct a dry whey credit for quantities of solids-not-fat processed for up to 264,480 lbs. solids-not-fat produced per month.

"Dairy farmers produce products that are important to our health and California’s economy,” Pan said. “We need to ensure that dairy farmers can be paid for their products at rates that reflect their costs and the true market value of dairy products so California dairies can survive and create jobs in California.  As a legislator with a science background, I visited a dairy farm and saw the high level of technology and innovation used to produce safe, high quality milk, cheese and other dairy products.  I am proud to partner with dairy farmers to author legislation so new, innovative uses of whey result in income for dairies to be competitive and expand the availability of dairy products."

 

“Too many of our dairy families have fallen victim to a milk pricing formula that has failed to capture the true value of the milk and its components for producers in the face of extraordinary feed costs,” said WUD president Tom Barcellos. “We have repeatedly petitioned the CDFA for relief to little avail. California dairy families are very concerned about their future and have been voicing those concerns. We’re all agreed on the need for action as soon as possible. Without dairy producers in business, California has little need for dairy processors.” 

“Initial reception to the proposed bill in the legislature has been very positive,” noted Michael Marsh, WUD CEO. “Hopefully, our groundwork and the highly regarded reputation Western United has built over the years in the Capitol will help us expedite passage and quickly attain a positive remedy to our 4b pricing dilemma.” 

WUD also filed a letter with CDFA supporting the petition request from CDI, DFA and LOL.

“While we recognize that this particular issue is also the subject of legislation introduced yesterday, the financial distress facing California dairy families justifies revisiting this critical issue on an emergency basis,” said WUD’s letter. “As the petitioners clearly outlined in their letter, California dairy families are struggling. A drought caused a significant hike in feed prices, leaving dairymen with a feed bill that represents an ever increasing part of their total cost of production. While dairymen across the country may have faced an increase in feed costs, California dairymen must also deal with a lower milk price, which leaves them with unsustainable margins. As we have argued in the past, the current sliding scale does not come close to the value generated by the whey factor in the federal order Class III price.” 

To download WUD’s letter of support, please click here.

For more information, visit http://www.cdfa.ca.gov/dairy/uploader/postings/petitions/

 

Source: Western United Dairymen