California dairy producers are moo-ning over a recent vote in favor of adopting a federal milk marketing order for the state.
The new California Federal Milk Marketing Order will be implemented started Oct. 17, with an Announcement of Advanced Prices and Pricing Factors and affected parties must comply with all provisions beginning Nov. 1.
According to the USDA economic impact analysis, adoption of the California federal order will result in a $269 million average increase per year in California producer revenue overall.
California dairy producer prices are routinely some of the lowest in the country, but by joining the federal order system, milk prices paid here and the process for determining milk prices will be brought in line with prices paid in the federal order system.CDC Executive Director Lynne McBride
The Turlock-based California Dairy Campaign commended dairy producers for voting to join the federal milk marketing order system during the recently concluded statewide referendum.
“California dairy producer prices are routinely some of the lowest in the country, but by joining the federal order system, milk prices paid here and the process for determining milk prices will be brought in line with prices paid in the federal order system,” said CDC Executive Director Lynne McBride.
California represents over 18 percent of all U.S. milk production and is currently regulated by a state milk marketing order administered by California Department of Agriculture. Once this new FMMO is established, over 80 percent of the U.S. milk supply would fall under the FMMO regulatory framework.
FMMOs are legal instruments that regulate the sale of milk between dairy farmers and the first buyer. Where appropriate, the California FMMO adopts the uniform order provisions contained in the 10 current FMMOs in the national system. These uniform provisions include, but are not limited to, dairy product classification, end-product price formulas, and the producer-handler definition. The new FMMO recognizes the unique market structure of the California dairy industry through tailored, performance-based standards to determine eligibility for pool participation. The order also provides for the recognition of producer quota as administered by the CDFA.
Three years ago, California Dairies Inc., Dairy Farmers of America, and Land O’Lakes — three California dairy cooperatives that represent over 75 percent of the milk produced in the state — submitted a public hearing proposal to the USDA for the establishment of a California FMMO. Dairy industry leaders and representatives testified for and against that and several counter proposals in a hearing later that year that lasted two months.
The USDA announced its proposed rule earlier this year, right after dairy producers told USDA Secretary Sonny Perdue at the World Ag Expo in Tulare, Calif. that they wanted the opportunity to join the federal order. The proposed rule was then published in the Federal Register and voting took place April 2 through May 5. Approval of the referendum required a positive vote by two-thirds of the voting dairy producers, or by producers representing two-thirds of the milk in the voting process.
USDA will work over the next few months to educate handlers who will become regulated by the new FMMO. The entire record of the rulemaking is available at www.ams.usda.gov/caorder.