Dairies Wait for Petition Granting

Dairies Wait for Petition Granting

August 1, 2013

Dairy Producers Hope to Hear

From Secretary Ross on Monday

By Patrick Cavanaugh, Editor, and

Laurie Greene, Associate Editor

On Monday Aug. 5, CDFA Secretary Karen Ross should answer a dairy petition presented to her July 19 regarding implementing a cheese price deal that will help dairy farmers throughout California.

“If she does grant the petition for a hearing, then we will go to the hearing and try to get the deal incorporated and implemented as quickly as possible to help the dairy farmers in the state,” said Michael Marsh, Chief Executive Officer with the Modesto-based Western United Dairymen. “We requested implementation as of Sept. 1, 2013, so we can get money to the dairy farmers as quickly as possible,” said Marsh.

On July 12, AB 1038, authored by Dr. Richard Pan (D-Sacramento), unanimously approved by the Senate Ag Committee on a 3-0 vote, with the Chair Cathleen Galgiani, (D-Livingston) and her republican colleagues, Tom Berryhill (R-Twain Harte) and Anthony Cannella, (R-Ceres) to move the bill after they were informed that a deal had been struck between the cheese makers and dairy producers. The deal was negotiated on behalf of the California dairy families, represented by Pan, and the cheese makers.

The deal was to both adjust the whey factor in the 4b cheese milk formula by raising the cap from 75 cents per hundredweight (CWT) to $1 per CWT, and provide an additional surcharge, during the next year, on milk going into cheese-making of 46 cents per CWT. 

According to Marsh, “The value of whey is capped at 75 cents per CWT, which is ridiculous, as we have seen whey values as high as $4 per CWT in other states back when we were getting 25 cents per CWT as our cap.”

“This increase would add an additional $110 million to the pool of California dairy farmers. At the same time, it would not cost consumers a penny as it simply redistributes assets from the cheese makers back to the farmers.” said Marsh.

“This current process is an outgrowth of our original AB 31 legislation that we introduced last December on the first day of the legislature,” said Marsh. “Since that time there have been ongoing negotiations between members of the legislature and cheese makers trying to get some relief for the dairy families of our state.”

AB 31 was intended to reconnect our cheese price as best we could back to the marketplace. “Unfortunately, CDFA Secretary A.G. Kawamura, at the request of cheese makers in California in 2007, disconnected the cheese milk price from the marketplace, and we have been struggling ever since to reconnect it. AB 31 would have closed the gap, between what we receive for milk going into cheese making in California and what is received by dairy farmers outside the state for the same type of milk, ” said Marsh.

“It was unfortunate the Kawamura agreed to transfer wealth from the famers to the cheese makers, and with everything else that hit California dairy farmers beginning in 2008, it was just another nail in the coffin for so many dairies that have since gone out of business.”

The hearing petition sent to Secretary Ross was signed by Western United Dairymen, as well as California Dairies Inc., Milk Producers Council and the Dairy Campaign.

Marsh noted that on Wednesday, July 31, CDFA emailed him stating that Land O’ Lakes had sent a letter to Secretary Ross to grant the petition for a hearing. “Land O’ Lakes also recognizes that California Dairy farmers need some relief,” Marsh said.