California Ag Secretary Karen Ross has withdrawn legislation that would dramatically change the marketing of the state’s Class 4 milk following strong opposition from producer groups.
The bill, AB 2730, would have allowed 100 percent of the state’s Class 4 milk to be marketed outside of the milk pool with no regulated minimum price by July 1, 2016, with a stepped-up phase-in period beginning July 1, 2015.
Dairy Farmers of America, California Dairy Campaign and Land O’Lakes strongly opposed the bill, and Western United Dairymen would not support the bill unless it was amended to provide for better protections for producers.
The bill, AB 2730, co-authored by Assembly member Susan Eggman, D-Stockton, and Sen. Christine Galgiani, D-Stockton, was amended in the Senate on Aug. 22 to reflect Ross’s intentions.
It was sent to the Senate Rules Committee to consider the waivers necessary to be heard, said Michael Marsh, CEO of Western United Dairymen.
Ross took the industry by surprise earlier this month with draft legislation and her intentions to get the bill passed before the Legislature recesses at midnight Aug. 29.
Producer groups have actively sought pricing change for the past four years. But they contend Ross did not consider producer input and pushed ahead with a bill that involves complicated pricing and pooling issues and did so with no analysis as to how it would impact producers.
In her announcement on Wednesday, Ross said despite a “tremendous amount of progress” on the division between processors and producers in the last two weeks, it has not been enough and the timing for reform legislation is not ideal.
Through the process of a dairy task force, “a framework came together that would have meant substantial financial relief for producers and flexibility to processors that would have benefited the whole industry,” she said in a written statement.
Producer groups don’t see it that way, and contend such sweeping change deserves more consideration, producer input and thorough analysis.
“To say there was significant progress made, we don’t agree. There was absolutely no consensus among the dairy task force,” said Lynne McBride, executive director of California Dairy Campaign.
Deregulation of the state’s largest class of milk might have given processors flexibility, but there was no analysis done and no way to say it would have significantly benefited producers, she said.
“That is a huge unknown. The impacts and consequences to dairy farmers were not adequately considered,” she said.
The process was rushed and flawed, with little notice to industry and last-minute surprises, according to Western United’s Marsh.
“It is unlikely most producers in the state even knew about a fundamental change in the way they’re paid for milk,” he said.
Industry first knew of the draft legislation and the Ross’s attempt to get it passed quickly in an email from the agency on Aug. 5 with a notice of a meeting the following day as well as a request to submit any suggestions by Aug. 8, he said.
Another meeting was held Aug. 13, followed by an email of the revised draft on Aug. 18, which contained substantive changes reflecting processor input. Work meetings were held on Aug. 19 and 20. The producer side was present buy only one processor representative showed up for the Aug. 20 meeting, he said.
After working on the bill for hours both days, the agency came out with a completely new proposal with the announcement that it would introduced it in the Legislature two days later, he said.
Dairy Farmers of America has worked within all available arenas to correct the inequitable treatment of dairy farmers within California’s milk pricing system, said Dennis Rodenbaugh, DFA senior vice president and CEO of its western area, said in a written statement provided to Capital Press.
However, “the attempt to rewrite the state’s dairy law with such a sweeping deregulation theme at the last moments of this session provides no time to fully understand the impact and gain industry consensus on a comprehensive solution,” he said.
California Department of Food and Agriculture and Dairy Institute of California, which represents processors, have not been responsive to Capital Press inquiries for the past two weeks. Co-ops Land O’Lakes and California Dairies Inc. have not returned calls made on Tuesday.