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Producers petition CDFA to implement ‘dairy crisis’ deal

California dairy producers filed a petition with California Department of Food and Agriculture Secretary (CDFA) Karen Ross, asking for a hearing to implement a milk pricing deal negotiated and agreed to last week by dairy farmers, cheesemakers and the California Legislature. The petition – posted on CDFA’s website – was filed by Western United Dairymen, California Dairies, Inc., Milk Producers Council and California Dairy Campaign.
The dairy producers and processors agreed on a short-term fix of $110 million in new money that cheese processors will pay into a milk pool to be shared by producers. The $110 million will come from increasing the price of 4b milk up to 46¢, and by expanding the whey scale from its existing cap of 75¢/cwt. of milk to $1/cwt.
The deal will bring relief to the state’s struggling dairy families by narrowing the price between what California dairy producers receive for milk going into cheese production and the price paid by processors for the same milk in surrounding states. The petition notes there continues to be a wide gap between California’s Class 4b price and the federal order Class III price. Since a May 2012 hearing on the Class 4b formula, the gap between the federal order Class III and California Class 4b prices has averaged $1.66/cwt., reaching $2.36/cwt. in December 2012 and rising back above the $2/cwt. level ($2.11/cwt.) in June 2013.