Capital Press

A bill in the California Assembly addressing state pricing for milk used to manufacture cheese is still afloat, but supporters say the Ag Committee stripped it of any meaningful reform.

The revised bill passed unanimously in the Assembly Ag Committee May 1.

While the bill passed, it wasn't the same bill dairymen supported, said Rob Vandenheuvel, manager of Milk Producers Council.

The original bill, AB 31, introduced by Assemblyman Richard Pan, would have mandated the whey value in California's 4b pricing to be no less than 80 percent of that value in Class III pricing in federal milk marketing orders.

The disparity between the two values has meant about $2 per hundredweight of milk less for California's dairymen compared with dairymen in federal orders.

"It's obviously a disappointment," Vandenheuvel said. "We thought we put together a fair proposal."

The bill did not ask for 100 percent of the value of dry whey in federal orders, but aimed to bring California's price closer to federal order prices, he said.

The bill had to be approved or it would have died, preventing further consideration until 2014. But what was left in the bill was no more than legislative intent, he said.

The bill was changed before the vote to read "... it is the intent of the Legislature to address establishing a dry whey value factor in the computation of the value of class 4b market milk ... ."

Committee members are concerned with the divisiveness of the bill and getting involved in milk pricing, he said.

Committee Chairman Susan Talamantes Eggman said she wouldn't move forward with the original language and directed producers to work with cheese processors to come up with a formula they agree on. The deadline for moving policy proposals to the Senate is May 21.

Michael Marsh, CEO of Western United Dairymen, which drafted the proposal, said it doesn't appear the chairwoman was aware dairy producers have been struggling with the issue for a decade, with processors refusing to talk about it,

As directed, producers will talk with processors and met May 2 with the Dairy Institute of California, which represents processors.

But Marsh said processors aren't giving any ground.

He said California's milk production is shrinking. If processors want to keep their assets healthy, they have to make sure dairy producers are healthy, he said.

"From our perspective, we're not walking into this on equal footing," Vandenheuvel said.

Processors are trying to defend their profits, and dairymen are fighting for their survival, he said.

It's difficult to believe that a compromise will be found, he said.

At that point, dairymen will go back to the committee chairman and show her the evidence that they tried to work with processors in good faith and that the issue is stuck. And they'll have to look at other options for moving a bill through the Legislature, Marsh said.

California Dairy Campaign was also supportive of the original language in AB 31 and is also disappointed that the Committee did not choose to close the gap in prices, said CDC's Executive Director Lynne McBride.

More than 350 California dairies have gone out of business in recent years, and that trend is continuing. The disparity in prices must be fixed, she said.

The organization is encouraged, however, by the chairman's willingness to work on the issue and is willing to reach out to processors to find a solution. It's too early to predict how that initiative will turn out.

Considering how long the disparity has existed, dairy producers need an alternative strategy, such as joining the federal order system. That alternative is already in play with bills to allow the state to join the system introduced in the U.S. House and Senate, she said.

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