Several California dairy groups filed a petition this week with the California Department of Food and Agriculture, requesting a hearing to implement a milk pricing deal negotiated by the state’s dairy farmers, cheese producers and California Legislature.
The proposal, written into state legislation, calls for increases in the minimum price of milk used to manufacture cheese and in the cap on the value of whey in the state’s minimum pricing formula for Class 4b.
“There continues to be a wide gap between California’s Class 4b price and the regulated prices for comparable milk sold around the country. Since the May 2012 hearing on the Class 4b formula, the gap between the Federal Order Class III and California Class 4b prices has averaged $1.66 per hundredweight. That gap reached $2.36 per hundredweight in December 2012 and rose back above the $2 level at $2.11 per hundredweight in June 2013,” the hearing petition said.
The petition was filed by Western United Dairymen, Milk Producers Council, California Dairy Campaign and the cooperative California Dairies Inc.
In the compromise, cheese-makers will pay an extra 46 cents per hundredweight. However, it is a far cry from what Western United Dairymen and its allies originally sought. Processors point that while they are willing to help out dairy farmers, they aren’t willing to put themselves at a disadvantage with other dairy states.
Rachel Kaldor, executive director of the Dairy Institute of California, which represents dairy processors, told the California Farm Bureau Federation that her group agreed to support the pricing levels and the changes farmers proposed—but only "to the extent that economic conditions warrant."