WUD members urged to speak out at Thursday CDFA hearing on whey factor

Western United Dairymen members are urged to attend Thursday’s CDFA hearing and speak out on the proposed petition by Western United Dairymen, CDI, Milk Producers Council and California Dairy Campaign to implement the deal struck by Assemblyman Dr. Richard Pan (D-Sacramento) and the Dairy Institute of California. The petition seeks to modify the sliding scale that determines the dry whey factor in the Class 4b formula and replacing the temporary price adjustment now in place with another.

The hearing will be held Thursday Sept. 12 at 8 a.m. in the CDFA’s auditorium at 1220 N Street in Sacramento.
WUD President Tom Barcellos urged producers to attend the hearing and speak out in favor of the proposal. “This hearing is the first step in bringing long needed relief to our dairy families and moves us in the direction of mitigating the pricing inequity in our formula for milk going into cheese,” he said.

The pricing changes proposed by the producer groups reflect the same proposals put forward by the Dairy Institute of California in a July 8, 2013 letter (click here to download) sent by its advocate to Assemblyman Richard Pan (D-Sacramento). In a letter signed by Joseph Lang of the Sacramento government relations firm of Lang, Hansen, O’Malley & Miller, the Dairy Institute said it would support CDFA hearings regarding milk pricing if those hearings resulted in the following:
•    The current emergency price relief is extended through June 2014 provided that no more than $.46 per hundredweight be assigned to Class 4b milk. This is estimated to generate $43 million.
•    An increase in the current cap for the whey scale factor from 75 cents to $1 per hundredweight. This is estimated to generate $42 million.

Combined with the current emergency price relief of $25 million, the total pricing proposal would total $110 million.

“We are pleased to see that the Dairy Institute is in agreement with the pricing changes in the petition submitted by Western United Dairymen and the other producer groups,” said WUD CEO Michael Marsh. “We look forward to their testimony in support of this petition at the September 12 hearing.”

In January of this year, CDFA raised minimum prices paid to the state’s dairy producers by an average of about 25 cents per cwt. That temporary increase remained effective from February through May. In June, the agency again increased minimum milk prices by an average of 12.5 cents per cwt. The state’s dairies, struggling with high production costs and unprofitable margins, reacted with disappointment.

In July, producer and processor groups agreed on a short-term fix of $110 million in new money that cheese processors would pay into the milk pool to be shared by dairy farmers.

Sept. 6, 2013 WUD Friday Update