More On CDFA’s Rejection of 4b Milk Adjustment for Dairy Industry

More On CDFA’s Rejection of 4b Milk Adjustment for Dairy Industry

October 26, 2013

Sen. Tom Berryhill:

‘Thought we had an Agreement”

 on Dairy Pricing Issues

Source: Western United Dairyman

Sen. Tom Berryhill (R-Modesto) sits on the Senate Agriculture Committee. A Stanislaus County farmer, Tom was elected to the Assembly in 2006 and to the Senate in 2010.  He has been one of the state legislative leaders who have worked closely with a coalition of state dairy organizations to address the industry’s pricing issues. He was a member of the state Senate Agriculture Committee that held a special hearing over the summer and arrived at an arrangement struck between milk producers and cheese processors.

The proposal had two basic tenets. First, there would be emergency price relief for up to one year in an amount of no more than $.46 to be assigned to Class 4b milk.  This would have replaced the existing emergency price relief.  Second, the sliding scale used to value whey in the Class 4b formula would be restructured to result in a new ceiling of $1.00 per cwt. contributed to Class 4b, achievable at current market prices.

That deal unraveled this week when CDFA Secretary Karen Ross issued a decision on a petition filed by Western United Dairymen, California Dairies, Inc., Milk Producers Council and California Dairy Campaign. Ross wrote, “I understand there will be disappointment with this decision in light of the publicity surrounding the perceived agreement between producers and processors during the legislative session. However, the Department was not jointly petitioned by producers and processors – only some producers – and when questioned by the hearing panel, processors responded that there was no agreement.”

In an interview this week with Western United Dairymen, Berryhill said, “I thought we did come to an agreement with the Dairy Institute about a dairy pricing mechanism that would allow my guys to stay in business.”

Referring to fellow Ag Committee members Sen. Anthony Cannella (R-Ceres) and Chair Cathleen Galginai (D-Stockton), Berryhill pointed out, “The three of us thought there was an agreement. On the processor side they did not want to give anything. I thought it (the deal) was a happy middle ground. We all thought we had a deal that day and were very surprised to come back (after summer recess) and find everything had fallen out.”

Referring to Secretary Ross’ decision, Berryhill said, “Karen has made her decision to kick this can down the road to June. We will have to live with that and it will put us back to the drawing board. We will have to sit down and talk some more.”

The Decision by Sec. Ross will lead to more closed dairies, and devastation
to families, who for many generations, were able to make a good living.

The industry’s current financial crisis is driven in part by federal mandates on ethanol which are driving feed prices to record highs, said Berryhill. “Feed prices will continue high for the near future or so. This industry’s dynamics have changed.”

Looking ahead, Berryhill says he remains committed to finding a solution. “Kicking that can down the road doesn’t help anyone. Any decision we come to, both sides will be mad at me. Those processors don’t want to give anything up. The producers out there are really challenged and we are trying to keep them sustainable and working.”

Gov. Brown has not actively engaged on the pricing issue and Berryhill’s feeling is, “He would like to see this thing worked out on its own. I don’t think it will be able to. At some point in time he will have to insert himself. I’ve found him to be a very pragmatic guy and many times willing to do the right thing.”

What does the future hold for pricing legislation? Berryhill says, “You are going to see this thing resurface for sure - - I don’t see this issue going away.”

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