Rob Vandenheuvel, general manager of the Milk Producers Council, said the message he got from the secretary's decision is that there's still a need for additional producer revenue, even though the department chose not to apply it "in a way that we felt was appropriate."
"They wanted to apply it across the board for all classes (of milk) and we thought that the problem was isolated to the 4b price," he said.
Ross said she simply cannot do what some producers have asked "because there's not the economic data for the formulas, or there are legislative and administrative hurdles to doing what some people want us to do."
Vanderheuvel said producers have been "exploring alternatives," noting that the state's three dairy cooperatives plan to petition the U.S. Department of Agriculture to replace the current state milk marketing order with a federal order.
Lynne McBride, executive director of California Dairy Campaign, said joining the federal order is now "the only viable way to bring our state dairy producer prices in line with prices paid across the country."
But not all producers believe joining the federal order is the panacea for their current problems.
Michael Marsh, CEO of Western United Dairymen, said one concern about going this route is the risk of losing the state quota system, which he described as a billion-dollar asset for California dairy farmers. The latest CDFA decision, he said, will "continue to foster momentum towards just finding something other than CDFA."
Marsh said his organization will now go back to the state Legislature to ask for guidance, because some of its members have been sympathetic to dairy farmers' plight and had testified at the last CDFA hearing about the need for milk pricing reform.
Bill Schiek, an economist for the Dairy Institute of California, which represents the state's processors, said his group respects the secretary's decision and her desire to balance the needs of producers and processors.
"I think she understood that conditions are improving for dairymen. The secretary has been responsive, and processors and cheese makers have been responsive," he said, noting that CDFA had already granted emergency price relief twice this year and has now extended it again.
He also said the institute is "committed to the work" of the California Dairy Future Task Force, a group of producers and processors that Ross formed last year to work on reforming the state milk pricing system.
Ross said work of the task force had been pushed aside earlier this year as dairy groups introduced legislation to try to change how the state determines the whey value.
She said a group of "industry technical experts" is now working on "potential alternative pricing scenarios" that could replace the current formulas, and that the department has contracted economist Dan Sumner at the University of California, Davis, to analyze those scenarios. She said CDFA staff is also drafting pricing proposals needed to make the changes, and she expects those proposals by Dec. 15.
Ching Lee is an assistant editor of Ag Alert, the California Farm Bureau Federation’s weekly newspaper. She may be contacted at email@example.com. Reprinted with permission from the Oct. 30, 2013 edition.