Written by The Business Journal Staff
The aggressive change in tactics, says WUD CEO Anja Raudabaugh, is part of an effort to raise the dairy advocacy organization’s profile — and influence — with state legislators, and to keep more Golden State dairies from going out of business.
WUD’s new representative in the state house is KP Public Affairs, a powerful K Street firm with a strong track record of legislative and regulatory wins against the Brown Administration.
Raudabaugh, who took the helm of Modesto-based WUD in mid-2015, said KP specializes in “an aggressive political ground game.”
Gary Conover, who is no longer employed with the organization, handled WUD’s Sacramento lobbying responsibilities in-house until the recent change. Raudabaugh said the shift in strategy will actually save the organization money.
“Using [KP] is actually much less expensive,” Raudabaugh said. “Our board was heavily involved in the decision-making process. Part of my job is trying to be a good fiduciary controller of how we spend our members’ money.”
In a note to the organization’s members in advance of the annual WUD Convention, scheduled for March 16-17 in Rohnert Park, Raudabaugh said KP has been “setting up a better offense for the California dairy farmer versus defense tactics only” that characterized WUD’s recent lobbying efforts.
Michael Kahl and Frederick Pownall have built KP into the largest public affairs management firm in California. Each man had established his own successful lobbying practice beginning in the 1970s before the two joined forces in 1996.
In Sacramento, KP represents a large stable of high-profile Golden State and national clients, including Westlands Water District, the California Restaurant Association, Hertz, Cisco, Citigroup and Dow Chemical.
“It‘s been a critical task to develop the message of the organization, brand it and sell it to the Sacramento politicians as a force to be understood and reckoned with as a major player in their pond,” said Raudabaugh. She said the stepped up lobbying efforts are part of WUD’s new message to promote “sound legislative and administrative policies and programs” that will boost the struggling industry’s profitability.
WUD represents 65 percent of the state’s dairy producers, many of which have fallen on hard times in recent years. Low milk prices have forced hundreds out of business and today, just 1,200 dairies are operating in the Golden State, nearly all of them family-owned.
But with milk prices continuing to sour, industry officials report that nearly one-third of animals being sent to slaughterhouses today are dairy cows.
And with the February milk price down to $12.95 per hundredweight, Raudabaugh said the pain for dairy farmers just keeps getting worse, especially, she added, with dairy owners spending “at least 50 percent” of their operating margins complying with “onerous” California permitting and regulatory regulations.
“Our message to the lawmakers at the Capitol has got to change,” Raudabaugh said.
For California dairymen to break even today, Raudabaugh said they need a milk price of about $16 per hundredweight. “Without California’s regulatory and permitting restrictions, the break-even price would probably be closer to $10 per hundredweight,” she added.
WUD members have long been frustrated with state lawmakers’ “negative” impact on their industry.
Raudabaugh said that the organization believes its new lobbying and branding strategies will be more effective in securing legislation more favorable to dairymen.
“If these lawmakers continue to pass such onerous policies, the dairy industry will go away from California,” Raudabaugh said. “We have to start rebranding our industry with effective product messages. We have to get everybody thinking differently.”
Raudabaugh said WUD’s new lobbyist is already starting to educate state lawmakers about the increasingly expensive realities of running a dairy business in the Golden State.
Up until recently, she said, “Those making the laws and implementing regulations governing the dairy industry had little to no idea how much those policies affected dairy farmers’ bottom line and that these burdens can not be passed on to the end-product prices.”
At this year’s World Ag Expo in Tulare, dairy officials from the state of New Mexico actually had a booth and were actively trying to recruit California dairymen to move to their state, which is under a federal milk marketing order and where land prices are lower and the regulatory environment is considerably less costly to comply with.
In previous years at recent farm show, representatives from Texas and Wisconsin have also tried to lure California dairymen to relocate to their state.
Even if California is eventually included in a federal order, something U.S. Department of Agriculture officials are currently considering, the boost in milk prices paid to Golden State dairymen may not be enough to offset what many in the industry characterize as “constantly escalating” regulatory pressure.
Raudabaugh said WUD’s new lobbyist have “heavily pressed upon” a number of targeted legislators the dire nature of the situation — and that some of the lawmakers have already made “systematic legislative changes” to the bills they have introduced or intend to introduce this year.
“This reflects a major change in the wind for dairy farmers to date,” Raudabaugh said. “Now the task is to maintain the awareness and press harder.”