California extends temporary milk price relief…again

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California agriculture officials extended a temporary minimum class price increase of 12.5 cents per hundredweight set to expire at the end of the year. According to the Fresno (Calif.) Bee, this increase will now be extended through June 2014.

Flag "While there are positive signs in the marketplace, the fragility of the country's economic recovery and the stability of the dairy sector compel me to make this extension," said California Department of Food and Agriculture (CDFA) Secretary Karen Ross.

Ross also acknowledged that the state’s milk pricing system is outdated.

Many of the state’s dairy producers will likely see the extension as helpful, but still a far cry from where it should be.

"Any additional revenue will help," said Rob Vandenheuvel, general manager of the Milk Producers Council in Ontario. "But what we are working towards is a fair structure for our milk."

California’s dairy industry has been hit hard by record-high feed prices, low milk prices and little time to bounce back from 2009’s economic hardships. Last year, more than 100 of the state’s dairies closed their doors for good. Data from the CDFA shows that things were far from golden for dairy producers in the Golden State – the industry lost between $882 million and $932 million in 2012.  

"It has been a struggle for many producers and we were hoping for a better response," Lynne McBride, executive director of the Turlock-based California Dairy Campaign said. "This was a minimal increase. And right now, we don't have a lot of confidence in the state's system."

The industry is currently petitioning the state to increase the minimum price of milk used to manufacture cheese and to cap the value of whey in the state’s minimum pricing formula for Class 4b. A negotiated agreement between dairymen and processors was short-lived, and the battle in the state’s milk price war continues to rage. Read more here.

Despite a hearing to justify the price hike, Ross said that producers don’t have the economic data to support major changes to the pricing structure.

"There are a lot of things I would like to do, but I am bound by state statutes and I have a lot of interests that I have to balance," Ross said.

Read, “State extends price increase for California dairy operators.”



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