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California dairy groups weigh USDA marketing order proposal

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Led by the state’s three major dairy co-ops, the initiative came from years of frustration over the price producers receive for milk going into cheese vats.

California dairymen are nearing the finish line in their efforts to establish a federal milk marketing order for the state, after the USDA Agricultural Marketing Service published its recommended decision.

“It’s been a long process. We’ve wanted this for many, many years,” said Lynne McBride, executive director of California Dairy Campaign.

USDA’s proposal isn’t all that producers had hoped for, but the process isn’t over. There will be a 90-day comment period, and the final proposal will go to a statewide referendum of producers.

“We want to make sure we follow it through. The stakes are really high,” McBride said.

Led by the state’s three major dairy co-ops, the initiative came from years of frustration over the price producers receive for milk going into cheese vats. That price was consistently and significantly below the price of like milk in federal orders.

California Dairies Inc., Dairy Farmers of America and Land O’Lakes developed a federal order proposal and petitioned USDA in February 2015. USDA held public hearings on that proposal and three others in the fall of 2015.

USDA’s proposal isn’t exactly what the three co-ops proposed, but it’s not the final proposal, said Kevin Abernathy, general manager of the Milk Producers Council.

MPC is now “looking under the hood” to understand how the federal order would work and how it compares to the state’s marketing system.

“MPC is really excited about the process and the opportunity. It’s a process we waited for. … Now we’ve got something to look at,” he said.

Producers’ goal in a federal order is to raise minimum prices on all classes of California milk, particularly Class 4b — cheese milk, which accounts for more than 40 percent of the state’s production.

Two of the anticipated wildcards in a USDA proposal were the co-ops’ provisions to maintain the state’s quota system and the state’s all-inclusive pooling.

USDA will have a public meeting on its federal milk marketing order proposal from 9 a.m. to noon Feb. 22 at the Clovis Veterans Memorial District, 808 Fourth St., Clovis, Calif. The meeting will be webcast online with a link posted at www.ams.usda.gov/caorder.

USDA’s proposal does maintain the quota system, which provides additional payments to Grade A producers holding quota certificates. But like the 10 other FMMOs, it does not require all processors to participate in the pool and pay regulated minimum prices for milk, except for Class 1.

The pooling provision is something producers need to learn more about, and the Dairy Campaign will be looking at it closely, given utilization in the state, McBride said.

The co-ops and dairy producer organizations have put a tremendous amount of time and resources into the effort to establish a federal order, and the proposal deserves close attention to detail and what it would mean on the ground to dairy producers, she said.

MPC will be running models to determine what the pool looks like under USDA’s proposal and how it would work, Abernathy said.

MPC has been holding conference calls with people who know and understand California’s system and federal orders and will be making recommendations to USDA during the comment period.

In a statement to Capital Press, DFA said the three co-ops and the producer community continue to support the effort for a federal order and it is now reviewing and analyzing USDA’s proposal.

Online

For more information, including an economic analysis of the proposal, visit: www.ams.usda.gov/caorder

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