Capital Press

The California Department of Food and Agriculture on Friday afternoon denied a petition for a hearing on Class 4a milk pricing formulas for milk that is used to manufacture butter and nonfat dry milk powder

California Dairies Inc. had petitioned the department to take another crack at its Class 4a pricing formula, stating further adjustments are warranted.

Following a hearing this summer, the department raised the manufacturing cost allowance, or make allowance, effective Sept. 1.

But the department denied the petition, stating the current pricing formulas have not been in effect long enough to provide enough additional information to warrant a hearing at this time.

The co-op had asked the department to increase the butter make allowance by 1.46 cents per pound and the powder make allowance by 3.07 cents per pound. It is also asking to lower the butter f.o.b. price adjuster, which reflects processors' delivery costs, by 0.36 cents per pound.

All told, the changes would reduce the Class 4a minimum price by 33 cents per hundredweight of milk, said Rob Vandenheuvel, manager of California Milk Poducers Council.

If the changes had been in place in 2011, the milk pool would have been reduced by $43 million. That's a substantial amount of money, he said.

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