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Co-ops refile petition for Calif. 4b milk price hearing

Published on December 7, 2012 3:01AM

Last changed on January 4, 2013 7:33AM


Capital Press

Three of California's largest dairy co-ops have refiled their petition to the California Department of Food and Agriculture asking for an emergency hearing on modifications to the minimum pricing formula for milk used to make cheese.

California Dairy Inc., Dairy Farmers of America and Land O'Lakes had filed an earlier petition on Oct. 30, which the Department denied on Nov. 13, saying the petition failed to set forth the secretary's authority to take the action requested.

The department said it could not determine if petitioners are proceeding under the discretionary hearing procedure or the mandatory one in California code.

The co-ops refiled the petition on Dec. 3, citing the discretionary hearing code. Their petition again asks Ag Secretary Karen Ross for a hearing to consider modifications to the sliding scale that determines the dry whey value in the Class 4b formula

Their proposed changes would mean a higher value in the formula and higher milk prices. They are requesting the modifications be implemented immediately and remain in place for six months to "give our members the milk price relief they desperately need," they stated in a letter to the Secretary.

The co-ops argue the value of whey in California's 4b pricing formula doesn't come close to matching the value placed on whey in federal milk marketing orders, and is harming the already financially stressed producer sector.

"This phenomena is a function of pricing formula construct and can be remedied easily by adopting the suggested changes included in this petition," the co-ops stated in their letter to Ross.

The co-ops' proposal sets a sliding scale for the dry whey value from a value of zero to almost $4.26 per hundredweight of milk.

The value of whey in California's pricing system has been an issue for some time, but really started heating up the last two years due to a widening discrepancy between California's 4b prices and Class III prices in federal orders.

Ross has denied several petitions for hearings on the matter, leading a coalition of dairy groups -- which includes the three co-ops -- to file a lawsuit hoping to force the change and prompting Western United Dairymen to take the route of proposed legislation.

The secretary held two hearings on the issue -- in late spring of 2011, which did lead to a slight change in the formula, and this summer, which led to no change.

She denied hearings on the issue in December of 2011 and in August and November of this year.


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