DairyBusiness Update for Jan. 10, 2013

CDFA delays February Class 1 price announcement

The California Department of Food & Agriculture announced it will delay announcing February 2013 Class 1 milk prices, pending the outcome of a public hearing on proposed temporary milk pricing formulas for all classes of milk, held Dec. 21, 2012.

CDFA said Class 1 prices will be published and posted on or before Jan. 22.

The February federal milk marketing order Class I base price is scheduled to be announced Jan. 16.

IDFA: FDA dairy drug residue sampling survey results expected in February

The International Dairy Foods Association (IDFA) reported results from a U.S. Food & Drug Administration dairy drug residue study are expected in February.

FDA’s drug residue sampling survey began last January. Sample collection was completed in November, and analysis of the findings and drafting of the report are currently underway. 

The FDA’s objective is to determine if dairy farms with previous drug residue violations in market-bound meat are producing milk that also contains drug residues. The survey involves the collection of 1,800 universal milk samples at central milk testing laboratories: 900 milk samples from dairy producers with a cull dairy cow tissue residue violation; and another 900 random milk samples. 

IDFA said it is working with industry partners, including Dairy Management Inc. and the National Milk Producers Federation, to prepare for the release of the findings.

‘Southeast Milk’ payment plan approved; trial delayed one week

A plan to distribute settlement funds in the “Southeast Milk” class action lawsuit has been approved by the U.S. District Court for the Eastern District of Tennessee Greenville Division. U.S. District Judge Ronnie Greer filed the order on Jan. 8, paving the way for nearly 6,200 southeastern U.S. dairy farmers to begin receiving cash settlement payments.

Settlement funds from Dean Foods and the Southeast Marketing Agency totaled $145 million. Legal fees and administrative costs are expected to take more than one-third of the total.

About 6,165 claims will be eligible for settlement payments, covering all producers marketing class-eligible milk sold in Federal Orders #5 and #7 beginning in 2001. Funds will be distributed to each class member on a pro rata basis, based on each member’s reported milk marketings, and  are estimated to average $13,000 per claimant when payments are completed, following a 5-year, tiered payment plan. Total payments will range from less than $200 to more than $20,000 per farm, depending on qualified milk marketings. 

Separately, the trial involving remaining defendants – Dairy Farmers of America (DFA), Dairy Marketing Services, LLC; Mid-Am Capital, LLC; National Dairy Holdings, LP; and Gary Hanman, the former DFA CEO – was postponed one week. The trial is now set to begin Jan. 22, and expected to last 6-8 weeks.