Milk Pricing Deal Would Bring $110 Million To California Dairies

July 23, 2013 — California dairy producers filed a petition with California Department of Food and Agriculture Secretary 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 is posted on CDFA’s website.

Western United Dairymen CEO Michael Marsh spoke with DairyLine’s Bill Baker this week about the “dairy crisis” deal.

WUDText of interview:

DBR: What exactly does this deal mean?

Marsh: What it means is we are in the process now of trying to implement the deal that was reached between the members of the California legislature, the dairy producers, and the Dairy Institute of California which represents the processors in the state. Of course what it means for the producers is that as long as the Secretary implements the deal that was reached, they will see an increase in their milk   as soon as the Secretary makes her decision that’s consistent with the deal.

DBR: What type of increase will California dairy producers be getting in their milk check?

Marsh: It should be about 30 cents per hundredweight on the all-milk price here in California – $110 million spread around amongst the producers so it’s much needed relief.

DBR: Where will the $110 million in new money come from?

Marsh: Two different ways. One would be to change the sliding scale for whey value here in the state of California from 75 cents, would take the cap on that  to one-dollar. There would also be a separate surcharge of 46 cents per hundredweight levied on 4b milk. So it does get us closer but unfortunately our cheese-milk price was disconnected from the marketplace back in 2007 by then Secretary Kawamara, it’s been a real struggle to get that price fixed here in the state and we’re going to continue to press onward…

DBR: $110 million will obviously bring some relief, but would you consider this a short term fix?

Marsh: I would, it doesn’t fix the fundamental issue which, of course, is the fact that in 2007 our price was disconnected from the marketplace and we’re going to have to continue to work to try to reconnect that price back to the market so that dairy farmers in our state get paid equitably for their milk.

DBR: Sounds like the California legislature really played a key role in this.

Marsh: They sure did. Dr. Richard Pan (D-Sacramento), who was the author of AB31 and subsequently 1038…really worked very hard to get this deal done as did members of the Senate Ag Committee. Cathleen Galgiani (D-Stockton) is the chair there; she and her Republican colleagues – Tom Berryhill (R-Modesto) and Anthony canella (R-Ceres) voted unanimously to move our bill along – so it was very nice to see the legislature working so diligently trying to bring some relief to the dairy families of our state. As we have tried to get that price fixed at CDFA, we have simply run into a brick wall there and we’re very appreciative of the efforts of legislature to help us move this along.

DBR: Any idea on when California producers might see an increase in their first milk check?

Marsh: The Secretary, if she moves expeditiously to call the hearing and grant the relief that we are requesting and have agreed to with cheesemakers, then I think the earliest implementation date would be on September 1.

DBR: So this deal is good news, but it’s not a done deal yet, right?

Marsh: It’s been a long haul and we know we are still not all the way through this so we’re hopeful that we can get a quick turnaround – granting of a hearing by the Secretary…so we can really get some relief for the dairy families of our state that have struggled so mightily.

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