California fluid milk fortification standards are based on California state regulations that are different from the regulations authorizing the milk pooling and marketing plans. Federal law prohibits any changes to the California solids standard (see, 7 USC 7254). Adoption of a Federal order cannot change the state standards.
Federal milk orders price nonfat solids used to fortify fluid milk slightly different than the current California state order. In Federal orders, fluid milk bottlers are required to account to the pool for any increase in total milk pounds resulting from fortification and do not receive any kind of fortification credits.
10. What is in the 2014 Farm Bill regarding California becoming a Federal milk order?
The 2014 Farm Bill contains a provision to allow California producers to request a Federal milk marketing order that recognizes the California quota program.
11. How much more money will I make on my milk when California adopts a Federal order?
This depends on the details in what is proposed. Once a complete proposal is submitted, USDA intends to conduct an economic impact analysis to simulate and estimate comparisons between the current system and the proposed Federal order.
Federal milk orders are not an income enhancement tool. They are a combination of marketing tools that, among other things, provide a regulated minimum price that dairy farmers must be paid for pooled milk.
12. Can a Federal milk order require a handler to participate in an order?
Currently, Federal milk orders require fluid milk bottlers to participate in the pool every month. Non-fluid handlers have the option of participating in the pool each month. When non-fluid handlers previously participating in the marketwide pool elect to not pool milk, it is described as “de-pooling.” Some Federal orders have pooling provisions that deter de-pooling by restricting the volume of milk that can be re-pooled after leaving.
13. How did the quota plan function in Oregon?
Prior to 1970, the State of Oregon operated a quota plan for Oregon producers. During the rulemaking process to establish the Oregon-Washington Federal order, producers requested authority for the State of Oregon to operate a voluntary quota plan for producers located in Oregon. The State-managed program operated concurrently with the Oregon-Washington Federal milk order which included a separate base/excess plan. Each month, the Oregon-Washington Federal milk order would transfer the Oregon proceeds from the milk pooling process to the State of Oregon. The State then redistributed available money through the Oregon Quota/Base price plan.