Image via California Dairy Campaign

published on June 7, 2018 - 4:52 PM
Written by David Castellon

Within a few months, California will no longer control the prices paid for milk in the Golden State.

Today, the U.S. Department of Agriculture announced the result of a tally of votes by dairy producers across the state, and the majority wanted California milk prices to be set monthly by a Federal Milk Marketing Order, as it is in most of the nation’s dairy-producing states.

“As a result of this favorable vote, USDA today published a final rule in the Federal Register indicating that approval,” which means California’s first FMMO will be implemented Oct. 17, with full compliance beginning Nov. 1, according to a USDA announcement.

Currently, the prices dairies in the state are paid for milk are determined by California’s secretary of agriculture.

The problem, said Lynn McBride, director of the California Dairy Campaign, is that “California dairy producer prices are routinely paid some of the lowest in the country, but by joining the federal order system, milk prices paid here and the process for determining milk prices will be brought in line with prices paid in the federal order system,” explained McBride, whose organization is a Turlock-based nonprofit representing dairy operators that joined other industry groups in rallying support for changing the pricing system.

Operators have accused California Secretary of Agriculture Karen Ross of intentionally keeping milk prices low as an incentive for manufacturers that buy milk to stay in California.

Some operators say the change is critical because dairies across the county have been receiving low prices for their milk in recent years, with California dairies mostly selling their milk at prices below their operating costs or just breaking even, so even small price increases under a California FMMO may help.

McBride said the USDA’s own economic impact analysis indicates adoption of the California federal order could increase revenues for all the state’s dairy operators by an average of $269 million a year.

“Since our organization was founded, we have called for California to join the federal order system, and we applaud all the dairy producers across the state who voted in favor of establishing a federal order for California,” Joe Augusto, president of the California Dairy Campaign, said in a written statement.

That campaign had the backing of the state’s top dairy cooperatives — California Dairies Inc.; Dairy Farmers of America, Inc.; and Land O’Lakes, Inc. — that together worked to introduce a federal milk marketing order proposal for California.

“In particular, we applaud the leadership of the state’s cooperatives for introducing a federal order proposal for our state and all their extensive work during the lengthy hearing process leading up to the statewide vote to establish a federal order here,” Augusto’s statement continues.

California Farmers Union President and California Dairy Campaign board member Joaquin Contente in his own written statement praised U.S, representatives David Valadao, R-Hanford and Jim Costa, D-Fresno, along with U.S. Sen. Dianne Feinstein for supporting the legislation which included allowing California dairies to roll over their state quota program into the federal order system, which was critical in getting support among dairy operators.

“We further commend USDA Secretary Sonny Perdue for his leadership in setting a clear timeline for the referendum and implementation of the federal order and the extensive work of Agricultural Marketing Service Deputy Administrator Dana Coale and her staff,” Contente’s statement continued.

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