Federal Milk Marketing Order in California in Effect Nov. 1

Questions Arise Regarding Milk Quota

Edited by Patrick Cavanaugh

Dairymen and women throughout California are working hard to provide milk and other dairy products for consumers in California and the world. Because the industry has struggled over the past decade with price swings that have often landed dairies in red, many dairies have gone out of business. Still, other operations relocated to others states where regulations are a fraction of what they are in California.

In June 2018, California dairy producers voted to establish a new Federal Milk Marketing Order (FMMO) for the state. The vote was a paramount step in a long process that would culminate with the new order taking effect on November 1. The order will adopt the same dairy product classification and pricing provisions currently used throughout the FMMO system.

California accounts for more than 18 percent of U.S. milk production and is currently regulated by a state milk marketing order administered by the California Department of Agriculture (CDFA). Once this new FMMO takes effect, more than 80 percent of the U.S. milk supply will fall under the FMMO regulatory framework.

Western United Dairymen is a trade association based in Modesto. Annie AcMoody is the Director of Economic Analysis. She explained that there have been questions from the industry regarding the upcoming FMMO.

Among the often asked question revolves around when the state switches to FMMO in November, what will happen to their quota if a dairy ships milk out of state?

Annie AcMoody: When our California state system goes away to make way for the Federal Milk Marketing Order (FMMO) in November, the Quota Implementation Plan (QIP) will be the language in place to ensure the quota system’s smooth transition into the FMMO system.

When we enter that new world, all market milk received from California producers at a California plant will be assessed for quota. By “received”, the language defines “to convey milk physically into a milk plant where it is utilized within the plant, or stored within such milk plant and transferred to another plant for utilization. This means that a milk truck driver cannot drive by a plant, wave hello to an operator, and keep on going out of state and still call this milk received in California. Basically, if your California milk leaves the state, you will not be assessed for quota.

But you also will not be paid for it. But, if your milk is 60% quota and only 40% of your milk goes out of state, you will be assessed on 60% of your milk and get paid quota on that same 60%. If your quota covers 100% of your milk and 40% of your milk goes out of state you will be assessed on 60% of your milk and get paid quota on that same 60%. In this instance, one could wonder if it makes much sense to keep your quota.

While it may not make much economic sense to hold on to quota you are not paid for, some reasons may validate that decision (perhaps it is expected milk will be shipped to a California plant in the near future). If you were to decide to hold on to that quota, it is important to keep in mind that “if quota is not made active by shipments of market milk to a California plant or cooperative association or is not transferred within the 60-day period, such quota shall revert to the Department”.

This excerpt from the QIP means that if your quota milk is not paid on for over 60 days, you will lose it, so you better sell it. This is likely going to be an issue if you ship to a proprietary plant and all your milk goes out of state. If you ship milk to a cooperative, there is more flexibility because that coop has the ability to combine quotas assigned to it by its members.

So as long as the quota total within the coop is not larger than the total amount of market milk produced and received in California, then there should be no issue for you as a quota holder.

What 
is 
defined 
as 
market 
milk?


Answer:
 Grade A milk.

If your milk is Grade B, you cannot have quota now and will not be able to under the QIP. You will not be assessed for it either. Currently, only around 3% of the milk in California is Grade B. WUD will keep an eye out on this topic to ensure that percentage does not deviate significantly. As a reassurance, this is not something that could grow from 3% to 50% in a month since fluid milk is not allowed to take in Grade B milk and the three largest coops in the state (CDI, DFA and LOL) committed to not taking in any more Grade B milk after the transition to the FMMO.

Latino Workers Appreciated on Dairies

Campaign Targeting Latino Community for Dairy Workers

By Patrick Cavanaugh, Farm News Director

Western United Dairymen, based in Modesto, is launching a Spanish language campaign to educate the Latino community about working for California dairies, according to Anja Raudabaugh, chief executive officer of the organization.

“We’re basically going to be offering a lot of benefits for Latino employees and their families to stay working for dairies or to come to work for dairies,” she said. “We’re going to be doing quite a bit of immigration services, free of charge for those families. We want to elevate the status of women on the dairy farm because they tend to do really well with the cows and the calves.”

The campaign is known as Lecheros Unidos de California.

“We are really targeted and branding, with the dairy community and not just Western United Dairy,” Raudabaugh said.

The campaign will be heard throughout the San Joaquin Valley on Spanish radio and television. The California dairy industry compensates Latino workers well beyond minimum wage to get the work done.

“This is a effort to strengthen the connection that the Latino community has with the dairy industry,” Raudabaugh. “We want them to know that we care for the community and count on them to work in our industry.”

 

 

 

California Depends on National Dairy Month

National Dairy Month Encourages Americans to Eat More Cheese

By Patrick Cavanaugh, Farm News Director

Across the country, National Dairy Month will be celebrated during the month of June to promote the consumption of dairy products. Though California is the number one dairy state, California dairy farmers have been experiencing a decline in dairy production amidst high labor costs, competition from other states and declining profit.

Founded in 1937 as National Milk Month with the goal of increasing milk consumption to stabilize the dairy surplusthe holiday was renamed National Dairy Month to encompass all dairy products.

Anja Raudabaugh, CEO of Western United Dairymen
Anja Raudabaugh, CEO of Western United Dairymen

Anja Raudabaugh, CEO of Western United Dairymen in Modesto, Calif., is hopeful that celebrating National Milk Month will educate more consumers about the health benefits of diary products, increase dairy consumption opportunities, open more markets and enable the lagging dairy industry in California to better compete with other states.

States such as South Dakota and Wisconsin have ramped up their milk production significantly, which has stressed California producers to even the gap. According to Raudabaugh, the term oversupply doesn’t necessarily apply to the dairy conditions in this state. She remarked, “We’re actually in a 17-month decline at the moment, which is the longest decline [in milk production] we have ever been in.”

The dairy industry has managed to be very competitive with wages, another stressor, but the high labor costs are hurting production companies. “As things get more and more competitive globally,” said Raudaubaugh, “we are going to continue to struggle to figure out how those margins play out.”

“The margin is going to continue to shrink, especially as wages get more and more competitive,” Raudaubaugh observed. “Being a worker on a dairy farm is certainly very wage-competitive throughout the agricultural industry. We cannot keep workers at anything less than about $16 or $15 an hour as it is, so it’s a good time to be a worker in the dairy industry. It’s a good craft and skill to have if you become a milker.”Real California Cheese Logo

Given Western United Dairymen’s mission to promote and administer programs and policies aimed at maintaining the longevity of the dairy industry on the West Coast, and as the milk industry struggles and continues to face tough times, Raudabaugh has a solution: “Eat more cheese.”

Enter: National Cheese Day every June 4! According to the California Milk Advisory Board website and California Department of Food and Agriculture (CDFA) 2014 data, California is the #2 cheese producing state—right behind Wisconsin—and the #1 producer of Monterey Jack cheese. An amazing 43% of California’s cow’s milk is used to make California cheese, which is produced by more than 50 California cheesemakers.

Even beyond cheese, Raudabaugh said, “There is a tremendous amount of diversity in the way people have exposure to dairy products they don’t even know about. There are yogurts and sour creams, ice creams, and whey products.”  She believes market sectors should understand more about the dairy products consumers are exposed to every day to increase not only more milk consumption, but higher-value dairy as well.

“The diversification of the product line is really what has kept us in business,” reflects Raudabaugh, “It’s what keeps us looking to the horizon and looking to the future optimistically, even in the face of some pretty bad milk prices right now.”

Remember California dairy producers, particularly, this monthNational Dairy Month, and try a new dairy product. And discover a new cheese tomorrow, June 4, National Cheese Day!

Ag Leader Paul Martin Inducted into Sonoma County Farm Bureau Hall of Fame

Paul Martin, a Petaluma rancher and agricultural leader who has dedicated his life to building bridges between farmers and regulatory agencies, will be honored at Sonoma County Farm Bureau’s “Love of the Land” celebration on July 16 at Richard’s Grove and Saralee’s Vineyard in Windsor, Calif.

Paul_Martin
Paul Martin (Sonoma County Farm Bureau)

Martin’s remarkable agricultural legacy has earned him a prominent place in Sonoma County Farm Bureau’s Hall of Fame. The annual award recognizes agricultural leaders who are a guiding force in preserving, protecting and propelling Sonoma County’s $4 billion farming industry. Martin joins legendary leaders in the Hall of Fame, like the late Saralee McClelland Kunde, who was the Saralee of Richard’s Grove and Saralee’s Vineyard; Gene Benedetti, who was founder of Clover Stornetta Farms; and Larry Bertolini, who was founder and president of Western Farm Center.

Martin is a former dairy rancher who had a second career as a representative for the dairy and agriculture industries. After selling his cows in the late 1990’s, Martin started working as field representative for Western United Dairymen, utilizing his knowledge of the dairy industry and his excellent communication skills to represent milk producers. After retiring from Western United Dairymen in 2012, he served a two-year stint as Gov. Jerry Brown’s Deputy Director in the Office of Business and Economic Development. Martin and his wife Jill have retired to their ranch in Two Rock.

Sangiacomo Family Photo
Sangiacomo Family Photo (Sonoma County Farm Bureau)

The Sonoma County Farm Bureau will also honor the Sangiacomo Family, a multi-generational Sonoma Valley family respected for their land stewardship, agriculture leadership and dedication to growing world-class grapes, as “Farm Family of the Year”. In addition, the Bureau will present the “Luther Burbank Conservation Award” to Harmony Farm Supply & Nursery in Sebastopol. The Farm Bureau refers to Harmony as, “It could easily be called the Institution of Organic & Sustainable Farming & Gardening, a revered center of learning that upholds an environmental ethic while helping growers produce crops the natural way.”

Harmony Farm Supply & Nursery (Sonoma County Farm Bureau)
Harmony

Love of the Land honors the stewards of the land and Sonoma County’s agricultural bounty. The event starts at 5 p.m. with a tasting of Sonoma County wine and food. A dinner featuring an array of Sonoma County grown products is at 7 p.m. The dinner will be followed by the awards presentation and live auction. The event is open to the public and anyone who wants to join in recognizing the stewards of Sonoma County’s working landscape.

Individual tickets are $65. Corporate sponsor tables for eight people are $1,250. General seating tables of eight are $700.

To make reservations, visit Sonoma County Farm Bureau or call 707-544-5575. Tickets are available until July 2 or until sold out.

 

Western United Dairymen Statement on Executive Immigration Action

 State Needs Immigration Action for Year-Round Labor

 

Yesterday, President Obama announced a series of executive immigration actions intended to provide relief from deportation and work authority to certain individuals who are not legally present in the U.S. The specific implications for agriculture are difficult to assess, but it is clear President Obama’s executive action is limited and only proposes temporary relief.

WUD firmly believes that Congressional action is the only true path to a comprehensive solution for the current broken immigration system. For example, farmers with year-round labor needs are ineligible to participate in any existing program because the law requires the job to be seasonal and the worker to be temporary. Legislation appears to be the only way to eliminate this challenge to our country’s food security.

The consequences of labor instability and Congressional inaction to address it have been severe.  We are committed to achieving a fair legislative solution that most importantly, legalizes the current workforce and provides a stable, legal, year-round workforce moving forward. Our dairy families depend on these experienced employees who understand the needs of our dairy farms and herds.

WUD is a voluntary membership organization representing more than 60% of the milk produced in California. Membership benefits include resources in labor law, environmental regulations and pricing issues. Members decide the direction of state and federal legislative efforts affecting the dairy industry.

 

March 31st deadline for enrollment in Nutrients-on-Demand (NOD) management program

Nutrients-on-Demand (NOD) is an educational program developed by Western United Dairymen, California Dairy Quality Assurance Program (CDQAP) and Sustainable Conservation.

NOD aims to help dairy producers improve the accuracy of applying liquid manure to fields to increase the efficiency of nutrients while maintaining yields.

The program provides easy-to-use diagnostic tools that help you track your nutrient application rates based on crop demand and identify manure infrastructure needs and funding opportunities.

NOD consists of three meetings that provide training on field nutrient balance. The program will work with you to develop a plan for a trial field, review your results in the diagnostic tool and identify areas for improvement.

NOD runs from March 2014 through November 2014. The program requires the dairy producer and/or irrigator to attend meetings.

Benefits of NOD include improved nutrient application amounts and timing, covered cost of lagoon samples for 2014, covered cost of time spent with your own consultant, provision of 24-hour lagoon sample results, and identification of programs that may assist with infrastructure improvements.

The application deadline is March 31st, 2014. Please contact John Cardoza, Project Manager at (209) 576-7731.