Federal order educational meeting set for Sept. 20 in California

Discontent with California Department of Food & Agriculture (CDFA) reform to the state’s milk pricing formulas, Western United Dairymen (WUD) is hosting a program to educate dairy producers about the federal milk marketing order system, Sept. 20, 10 a.m., at the Tulare Ag Center, Tulare, Calif.

The meeting will feature Bill Wise, market administrator of the Arizona and Pacific Northwest orders, who will provide an overview of federal orders and highlight the differences with the California system. A significant portion of the meeting will be allocated for questions. 

The decision to set the meeting – approved by WUD’s board of directors – stems from the producer community’s discontent with CDFA’s minimal changes to a pricing formula change request earlier this year.

“After the last hearing decision (regarding the whey factor in California’s Class 4b milk pricing formula), a lot of producers have shown interest in learning more about federal orders, and we wanted to give them an opportunity to gain knowledge about its potential impact on California, while looking at the pros and cons”, said WUD’s president Tom Barcellos. 

Meanwhile 20 members of the California Legislature sent a letter to CDFA Secretary Karen Ross, calling on her to “expeditiously review” WUD’s latest petition seeking a hearing for emergency price relief. The CDFA has until Aug. 21 to respond to the request for hearing. 

WUD filed a petition on Aug. 6 with the CDFA asking for action on two fronts: First, emergency price relief due to the current financial pressures on dairy producers, notably due to extremely high feed costs. WUD is requesting a six-month increase of 50¢/cwt. on all classes of milk. Second, changes to the whey value of the Class 4b formula. WUD is requesting the cap of 75¢/cwt. be removed by proposing a scale that mirrors more closely the whey value in Federal Class III. WUD is also proposing a dry whey exemption on the first 100,000 lbs. of milk processed daily by cheese makers. The exemption would be only on the whey portion of the Class 4b formula. 

Citing the “economic catastrophe” facing California’s dairy families, the bi-partisan group of legislators noted that feed costs are at record highs due to both federal ethanol policy and the disastrous drought. Many dairy producers are unable to acquire feed unless they pay in advance, pay upon delivery of feed or agree to sign over a second deed of trust on their property to the feed supplier. 

Further financial pressure stems from the revenue disadvantage California dairy producers face compared to farmers in other states, said the legislators. “California’s regulated minimum milk prices are severely lagging below prices paid to farmers within other milk marketing orders for the same class of milk,” said the legislators. 

Pointing out that many Central Valley counties have unemployment rates hovering around 20%, the legislators expressed their concern about the potential impact of the financial collapse of the dairy industry. “Loss of well-paying, year-round jobs in the dairy sector would have crippling effects on our economic revival,” they said. 

Source: Western United Dairymen