A new bill in California is making its way through the legislative process. SB 362, a bill that would amend the Gonsalves Milk Pooling act in California, has moved out of the state Senate and is heading to the Assembly for consideration.

This bill would exempt the existing five producer-handlers in California from pooling their milk. They would be exempt from reporting and accounting for all of their own milk produced and processed.

The Class 1 price would not be paid into the pool for all Class 1 milk produced by producer-handlers and there would be no limitations on the volume of milk these five operations could produce. Currently, all producers (including producer-handlers) receive a blend price of Class 1, 2, 3, 4a and 4b for their milk.

Dairies that produce and process raw milk would also be exempt from pooling-milk.

According to Tiffany LaMendola, director of economic analysis at Western United Dairymen, California dairy producers would bear the cost of these exemptions as the milk from these five producer-handlers would no longer be pooled.

Here is the breakdown of costs under three scenarios:

  • The current capped exemption enjoyed by producer-handlers costs each California dairy approximately $2,200 per year. But, the Class 1 sales (and other class sales) beyond each producer-handler exemption is pooled and shared by all producers.
  • If the producer-handler exemption is expanded to cover all the current producer-handler production (as allowed for in SB 362), the cost to each individual dairy would rise to $8,600 per dairy per year.
  • If the producer-handler exemption is expanded to cover all the current producer-handler Class 1 sales (which is also allowed for in SB 362 as the producer-handlers are allowed to grow), the cost per dairy would rise to $24,100 per year.

Western United Dairymen, the Alliance of Western Milk Producers and the Dairy Institute of California, as well as grocery processors and retailers, are working in opposition to this bill.

SB 362 was authored by California State Sen. Dean Florez, chairman of the Senate Committee on Food and Agriculture.

Source: Western United Dairymen