Increase in 4b price and whey value agreed to by industry stakeholders

Financial relief for California dairy families may be on the way as dairy producers and processors have agreed to a process that would ask the CDFA for an increase of 46 cents per hundredweight in the 4b milk price and expand the whey scale to $1 from its existing cap of 75 cents. It is expected that the 4b increase would generate an additional $110 million in the pool.

The developments came this week as the Senate Agriculture Committee held a special hearing on AB 1038, authored by Assemblyman Dr. Richard Pan (D-Sacramento). The recently introduced bill declares the Legislature’s intent to encourage the CDFA to hold two hearings regarding milk pricing:

(1) A hearing to amend the recent emergency price relief decision, issued by the Secretary of Food and Agriculture on June 24, 2013, to allow for additional emergency price relief.

(2) A hearing to address changes to the whey scale factor that is used to determine the amount paid into the milk pool in California by California cheesemakers.

Additionally, the bill would charge the California Dairy Future Task Force, whose members are dairy producers and processors, with providing economic research materials and proposed structural changes to the California dairy industry’s milk pooling and milk pricing programs. The bill would require that the administration and activities of the California Dairy Future Task Force, which has been previously established by the secretary, be funded by the assessments collected by the secretary.

The developments come after lengthy discussions between industry stakeholders. “We are extremely pleased with the hard work that all have put in to help our family dairies,” said Western United Dairymen Government Relations Director Gary Conover. “Although we have already lost hundreds of dairy farms in California, there is a light at the end of the tunnel for those that are still fighting to stay in business.”

California’s dairy industry has suffered more than $2 billion in losses in the past five years, forcing nearly 400 dairy farms in California out of business. The remaining 1,500 dairies are fighting for survival.

WUD President Tom Barcellos said, “We sincerely appreciate the work that lawmakers and the California Department of Food and Agriculture have put in for our family dairy farmers who are losing their livelihoods. Dr. Pan has not relented in his determination to help those whose businesses, home and communities depend on the milk they produce 365 days a year.”

Barcellos also thanked Sen. Cathleen Galgiani, chair of the Senate Food and Agriculture Committee, and Assemblymember Susan Eggman, chair of the Assembly Committee on Agriculture, for their efforts in working with other legislators to help California’s milk industry.

July 12, 2013 WUD Friday Update