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Ag Expo sheds light on 'inequitable' Calif. milk pricing

POSTED February 22, 2013 10:35 p.m.

The World Ag Expo showcased the latest in agricultural innovations and technological advancements to help benefit farmers’ lives, in its 46th annual event held in Tulare last week. But for struggling dairy producers, the only news they heard was sour.

Around 250 dairy producers turned up for the farm show to advocate for California adopting a federal milk marketing order and overthrow the state’s pricing system set by the California Department of Food and Agriculture.

As of January, the overall average federal price was $20 per hundred weight of milk compared to the CDFA’s average of $17.24 per hundred weight.

Since 2010, dairy producers within California have been forced to sell their milk at a significantly lower price compared to other states under federal pricing.

After a sweep of dairy producers closing or selling off their cows, protests in Sacramento brought about state hearings in 2012. It was only then that the CDFA Secretary Karen Ross began a temporary 25 cent increase to milk prices.

Despite the slight increase, producers are looking for a permanent solution, especially with another drought on hand that will signal a higher feed price and a growing economic boom from developing countries looking to America as a corn export.

Corn prices are expected to  grow between $4 to $9 per bushel depending on the weather, taking a toll on the cost dairies need for feed.

But one of the largest problems that California dairy operators unveiled is the state pricing system for their "4b" milk used to make cheese and whey.

“One of the key differences in California is that we have a significant amount of milk used in cheese. Over 40 percent of milk goes into cheese, and if our state is under-pricing us, it has a significant impact on producer prices,” said Executive Director of the California Dairy Campaign Lynne McBride.

As a result, dairy producers are looking to petition Congress to be accounted on the federal milk-pricing order. Dairy cooperatives are configuring an analysis of how the federal pricing system would affect California’s dairy industry, and are in discussion with the U.S. Department of Agriculture on the petition to keep California’s milk pool “quota” system, which gives dairies an extra $1.70 per hundred weight for their quota milk. 

Less than 20 percent of California milk is priced under the quota system and varies depending on individual sellers. McBride is determined to keep the quota value despite USDA officials recognizing that it is unlikely to happen under the federal pricing system.

Regardless, California dairy producers are ready for change if it means fair pricing.

“The level of interest in this alternative in joining the federal order is gaining momentum,” said McBride. ”The key issues we are working on have an unprecedented level of unity as we seek a way to correct this inequity in our system.”

 

 

 

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