California milk price relief expires

Temporary increases in California's minimum milk prices expired June 30. The adjustments had added 12.5 cents per hundredweight of milk to the state's pool price.
Carol Ryan Dumas

Capital Press

Published on July 8, 2014 11:18AM

Temporary adjustments to California’s minimum milk pricing formula, which added 12.5 cents per hundredweight to producers’ pool price, expired last week with no official objection from the state’s dairymen.

The temporary price relief was an extension of an earlier measure put into place July 1 to Dec. 31, 2013, and expired June 30, 2014. The measures were ordered by California Department of Food and Agriculture Director Karen Ross.

An earlier 25-cent temporary price relief had been in place Feb. 1-May 31, 2013.

California dairymen have been pushing for an increase in the whey value in Class 4b milk, used to manufacture cheese, for years to no avail and are now pursuing ditching the state’s milk marketing order system and joining the federal order system.

They say they have been frustrated that their petitions to CDFA have either been denied or resulted in small, temporary increases.

Both the 25-cent and 12.5-cent increases weren’t near enough to bring any meaningful relief from the devastating price downturn in late 2008 and 2009 and didn’t come close to bringing the 4b in line with Class III prices for similar milk in federal orders, producers contended.

Healthy prices so far this year have producers in a better situation, but they are still playing catch-up, said Tom Barcellos, a Porterville, Calif., dairyman and president of Western United Dairymen.

Everything is now going better for everybody, he said, adding that dairymen are able to pay their bills and catch up on maintenance and other expenses they’ve had to defer.

With milk prices as high as they are now, loss of the temporary price increase won’t be extremely painful. But dairymen still need everything they can get to catch up, he said.

CDFA also announced late last week that it is denying a petition by California Dairies Inc. for a hearing to raise the make allowance on Class 4a milk used for powder and butter. CDI’s proposed changes would have decreased the monthly 4a price by about 23 cents per hundredweight.

With 4a representing about 35 percent of the pool price, it would have reduced the pool price by about 8 cents per hundredweight, according to Milk Producers Council.

CDFA denied the hearing request, stating, “The secretary does not want to impede the ongoing efforts of the California Dairy Task Force in developing potential alternative pricing scenarios that address the issues of our state’s antiquated pricing system.”

Barcellos said he and everyone else fully expected the hearing would be denied on the basis of the ongoing work by the task force.


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