The amount that California dairy producers are paid could be brought up to par with prices paid to those in the Federal Milk Marketing Order following the United States Department of Agriculture’s decision to hold a public hearing on a proposed California FMMO.
The announcement on Wednesday, which scheduled the hearing for September, was instantaneously praised by a number of dairy producers throughout the state, including the California Dairy Campaign, which is a statewide membership association of family dairy farmers.
“We commend USDA for beginning the hearing process to establish a federal order for California,” said CDC President Joe Augusto. “Since our organization was founded, we have called for California to join the federal order system so that dairy producer prices and the process for calculating prices are in line with the rest of the country.”
“The importance of joining the federal order became even greater over the last five years due to the fact that prices paid to California dairy farmers were well below prices in the federal order system,” added Augusto.
The California dairy industry represents 20 percent of all milk production throughout the nation and is currently regulated under a state marketing order.
The value of whey is lower than it has been in the last five years since the price gap between the state pricing system and the federal order pricing system began to widen, causing California dairy farmers to consistently be among the lowest paid nationwide.
According to the CDC, the average California dairy producer has been paid $1,254,000 less than the same sized dairy in the FMMO since 2011. Since then, producers throughout the state have also been paid on average $1.44 per hundredweight less and lost approximately $1,045 per cow.
The 2014 Farm Bill allows for a California FMMO that recognizes certain state-specific aspects of the current order if recommended by USDA and approved by California in dairy producers.
California Dairies, Inc., Dairy Farmers of America, and Land O’Lakes, which represent over 75 percent of the milk produced in the state, submitted a public hearing proposal to the USDA in February for the establishment of a California FMMO.
Last month, California Department of Food and Agriculture Secretary Karen Ross introduced a short-term increase to the 4b or cheese milk price paid to dairy farmers. Although the temporary boost was welcomed throughout the state, producers still emphasized the need to join the FMMO.
If the state were to join the FMMO, dairy producers will be given the right to vote for a fair milk price in order to restore equity to dairy producer pricing in California, which is a fundamental difference between the federal order system and the state system according to CDC Executive Director Lynne McBride.
“Our state system has failed to consider the impact of pricing policy on dairy farmers, but the federal order hearing process will ensure that all dairy farmers have the right to vote on the final federal order proposal for our state,” said McBride.
“With dairy producer income well below production costs and California milk production in decline, the decision by USDA to grant a hearing on a federal order for our state greatly improves the outlook for dairy farmers here,” continued McBride. “Now dairy farmers will have the opportunity to participate in the hearing process to formulate a federal order proposal that will restore equity so that California producer prices are in line with prices in the federal order.”
The comments made by the CDC were echoed by the Dairy Institute of California, which is a non-profit trade association that represents dairy producers on legislative and regulatory matters at the state and federal level.
“This is the first step in a very long and deliberative process, in which we will fully and actively participate,” said Rachel Kaldor, Executive Director of DIC. “Our members have invested billions of dollars in their California operations, and are responsible for the jobs of nearly 200,000 workers here in the state.”
“The USDA’s final proposal must allow our state’s dairy industry to be competitive in national and global markets,” continued Kaldor. “With the right program, California’s dairy industry will thrive, so we’re committed to helping shape a plan that works for processors and producers alike.”
The hearing, which is expected to last several weeks according to the USDA, will begin at 9 a.m. on Sept. 22 at the Clovis Veterans Memorial District Building, 808 Fourth Street in Clovis, California. The hearing is open to the public. USDA will hear testimony and receive evidence regarding four proposals for a FMMO in California.
Those interested in testifying should notify USDA upon arrival at the hearing. For a copy of the hearing notice and additional information, visit ams.usda.gov/CAOrder. Individuals requiring a sign language interpreter or other reasonable accommodations should call (425) 487-5601 or email email@example.com prior to the hearing.
“Clearly, the final outcome of this process will have a significant impact on the future of California’s dairy industry,” said Kaldor. “We very much respect the right of our state’s dairy farmers to participate in these proceedings, and look forward to participating as well. There’s a lot at stake.”