June 21, 2013 — We’re still awaiting word about what adjustments, if any, California’s Department of Food & Agriculture will make in the state’s minimum milk pricing formulas. However, results of a new study indicate California’s dairy producers could benefit from joining the federal milk marketing order system. DairyBusiness Update’s Dave Natzke joined us on Friday’s DairyLine to discuss:
Many of your listeners may recall CDFA issued temporary changes to minimum milk pricing formulas last winter, resulting in about a 25¢ per hundredweight increase in the price paid to California dairy producers early this year. Those adjustments expired in May, however, and another hearing to consider additional adjustments was held on May 21. CDFA was expected to announce any changes late this week.
Meanwhile, members of three major dairy cooperatives, producing about 80% of California’s milk, commissioned a study last winter to see if the state’s dairy producers should join the federal milk marketing order system as a means to improve milk prices. Results of that study – commissioned by California Dairies, Dairy Farmers of America and Land O’Lakes – are now in.
And while details are still sketchy, leaders of the three dairy co-ops say results of the study – conducted by Dr. Mark Stephenson, University of Wisconsin-Madison, and Dr. Chuck Nicholson, Penn State University – show joining the federal order system would benefit dairy producer pay prices.
Staff from the three co-ops are planning membership meetings to share specific results of the study, and will begin to draft federal order language to initiate the process. One piece of enabling legislation has already been introduced in Congress. That bill would allow for California’s unique “quota program” in any new federal order.
Creating a federal order is a complex and lengthy process, requiring petitioning of the USDA, scheduling and conducting hearings and, ultimately, putting it to a producer vote, which would require a two-thirds majority vote for implementation.
Some estimate the process could take 14 months or more. So, in the meantime, California dairy producers will still be looking to CDFA to provide temporary price adjustments this week.