Dairy group leaders think law could be changed this year
By CAROL RYAN DUMAS
After repeatedly petitioning the California Department of Food and Agriculture for relief for the state's struggling dairymen, Western United Dairymen's board of directors voted Oct. 19 to advance a bill in the Legislature to change minimum pricing for milk going into the cheese vat.
California's dairy producers have long contended the whey value in the minimum price formula for 4b milk is too low and significantly lags behind the whey value in federal milk marketing orders and in surrounding states.
State law requires CDFA to calculate prices that are in a "reasonable and sound economic relationship" with what comparable milk is sold for around the country, and that is just not the case, said Michael Marsh, CEO of Western United.
The difference in California's whey value and the value in federal orders can be as much as $3 per hundredweight. And that money is sorely needed in California, where more than 100 producers are expected to exit the business this year, he said.
Western United's board members directed staff to craft language to make the change and organize bipartisan support in Sacramento for the legislation.
Five members of California's Legislature were present at the meeting to voice their concern for dairy families and pledge their support, Marsh said.
The draft legislation is not yet completed, but it will focus on getting a more appropriate value for dry whey in the 4b formula, he said.
Western United anticipates a special session of the Legislature following the November elections and is hopeful the bill could be signed into law this year, he said.
"With the recognition of the calamity taking place, I hope we'll have a speedy process," he said.
While state Agriculture Secretary Karen Ross has broad discretion in setting pricing formulas, and has said she doesn't have the authority to make some of the changes dairymen have proposed, the legislation will be specific enough that she would have to act on it if passed, he said.
The matter has been before CDFA since the early 2000s but calls for the change have increased in the last few years.
Between 2003 and 2009, the disparity between California's 4b price and the Class III price in federal orders was around or below 50 cents per hundredweight. The disparity began growing in 2010 with a difference of $1.24 per hundredweight and rose to $2 per hundredweight in 2011 and 2012, according to the Milk Producers Council of California.
Ross did raise the whey value from a fixed 25 cents per hundredweight of milk to a sliding scale with a minimum of 25 cents and a cap of 75 cents per hundredweight, effective Sept. 1, 2011.
But dairymen have argued that was still not enough.
Western United and a coalition of other dairy groups proposed a value with a sliding scale from a minimum value of zero to a maximum value of $4 per hundredweight, but to no avail.
The coalition, made up of California Dairies Inc., Dairy Farmers of America, Land O'Lakes, Security Milk Producers Association, California Dairy Campaign, Milk Producers Council and Alliance of Western Dairy Producers, filed a lawsuit against CDFA over the whey issue on Aug. 31. Dairymen have held two protests on the steps of the state Capitol in the last two months.
In August, Western United petitioned the department for a temporary, emergency price relief of 50 cents per hundredweight for all classes of milk for a period of six months from October through March 2013. That petition was denied.