WUD supports emergency petition for milk price increase
Aug. 8, 2008 - - This week Western United Dairymen joined with the Alliance
of Western Milk Producers and the California Dairy Women Association to request
that Food and Agriculture Secretary A.G. Kawamura call an emergency hearing to
consider the implementation of a “surcharge” on the regulated minimum prices for
Class 1, Class 2 and Class 3 milk. The suggested level of the surcharge is $1.00
per hundredweight for a period of six months. The concerns leading to this call
for an emergency hearing include the extraordinary high feed prices and fuel
costs producers are facing, as well as the extreme volatility in the cheese
“As bad as it is now, the situation that will face producers over the next several months promises to be much worse,” said the groups in filing the petition. “The prices of feed are at levels that have never been seen before but these costs will not be fully experienced by California producers until this fall when new concentrate contracts are executed for the coming year. During last year’s fall contracting period corn prices were climbing from the $2.50 per bushel range to $3.50 in December. This year prices, while down a bit from the weather induced $8.00 range, appear to be settling near $6.00 per bushel. The implications of that kind of price increase on the single most important concentrate in dairy rations are frightening.”
In the past week the CME cheese market has shown extreme volatility, with barrel cheese, after declining 9.25 cents on July 29, posting a record drop of 28 cents on July 30, to settle at $1.65. Block cheese also had large declines—losing a total of 24.5 cents over the two-day period of July 30-31. “When these kinds of price swings are viewed in conjunction with the feed price increases summarized above, the result is an untenable position for California dairy producers,” said the petition signers.
Go to http://www.cdfa.ca.gov/dairy/pdf/hearings/2008/Petition_WMP_Class123_080508.pdf to view the petition on the CDFA website. CDFA has 15 days from the date of the filing to respond.