California dairy farmers are nearing the finish line in a marathon effort to abandon their state milk marketing order and join the federal milk marketing order system.
USDA issued its final decision to establish a federal order for the state and will conduct a referendum from April 2 through May 5 to determine producer support.
“It has been a long haul,” Geoff Vanden Heuvel, board member and economic consultant for Milk Producers Council, said.
Over the last decade, producers have been dissatisfied with how the state system has operated, he said.
“California producers came to believe the state system created a regulatory bias against producers,” he said.
The system worked well when California operated in an isolated market, and it allowed the industry to grow. But the state is no longer isolated, and California’s industry has become a huge part of U.S. and world markets, he said.
“We need to be on a level playing field with the rest of the (U.S.) industry,” he said.
Producers will now be able to decide which system will best accommodate future prosperity, he said.
Now that the final decision has been issued, “we’re at a point here where it’s a yes or a no,” he said.
The Western United Dairymen organization “is excited that the process of improved producer prices is finally coming to a productive close,” Annie AcMoody, WUD director of economic policy, said.
Dairymen pursued joining the federal system to bring their milk prices in line with the rest of the country after little to no success at increasing prices through their state order.
“We are relieved to be arriving at this point in the federal order process and look forward to engaging producers in their education of this potential new pricing structure,” Lucas Deniz, WUD president and a Petaluma dairy producer, said.
The California Dairy Campaign has long called for the state’s producers to join the federal order system to bring prices and the process for determining prices in line with other regions, Lynne McBride, CDC executive director said.
“We think this change is long overdue given California dairy producers’ prices are routinely the lowest or near the lowest of any of the major dairy-producing regions,” she said.
The latest analysis by the California Department of Food and Agriculture puts cost of production at more than $18 per hundredweight of milk, and producers are receiving about $14 for their milk. The state lost 61 dairy operations last year, and that trend is continuing, she said.
The journey to a federal order formally began in February 2015, when California Dairies Inc., Dairy Farmers of America and Land O’Lakes petitioned USDA to consider a proposal they developed.
USDA will have a public meeting on the proposed FMMO at 9 a.m. April 10 at the Clovis Veterans Memorial district building.
More information as well as an economic impact analysis of the proposal is available at www.ams.usda.gov/caorder