Editor's note: The following article was written by Ching Lee, Assistant Editor for the California Farm Bureau's Federation's newsletter, "Ag Alert."
California dairy farmers will earn a higher price for their milk starting next month as a result of a hearing decision made by the California Department of Food and Agriculture, but producers said the new prices are still not high enough to overcome soaring feed costs and other financial woes.
Announced last week, the CDFA decision raises the minimum price the state sets for all five classes of milk for four months—from February to May. The department said the temporary adjustments would amount to an increase of about 25 cents per hundredweight in producers' average monthly pool price for those four months.
Specifically, the changes will increase Class 1 milk prices by 5 cents per cwt.; Class 2 and 3 by 10 cents per cwt.; and Class 4a and 4b by 30 cents.
The department had called an emergency hearing in December and said it would consider temporary changes to the state's milk pricing formula that would last for no longer than six months.
In its decision, CDFA said "the severity and wide reaching effects" of last year's drought, which led to record-high corn prices, "caused extraordinary financial stress to dairies to the point of warranting some level of temporary price relief."
"We welcome the increase," said Lynne McBride, executive director of the California Dairy Campaign, "but we just think it's long overdue, and for a lot of the dairy producers in the state, it's going to be too little, too late because a number of them continue to go out of business."
Her group had asked the department for a six-month increase of $1 per cwt. in the pool price, the highest of six proposals CDFA received. McBride said there's currently about $1 per cwt. difference between what California dairy farmers earn for their milk and what producers in other states receive under federal milk marketing orders.
"What we'd like to do is see our prices be in alignment with prices in those states, so we're going to continue to work toward that end," she said, noting that the California Dairy Campaign favors the state joining the federal orders.
Rachel Kaldor, executive director of the Dairy Institute, which had proposed an 8 cent per cwt. increase to the pool price for three months, said processors would much rather see milk prices be determined by market conditions rather than regulatory intervention. But she said she also understands that the department is trying to "strike a balance between what dairymen need and what processors can pay."
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