Despite the fact that California Department of Food and Agriculture agreed to changes in both its 4a (butter/non-fat dry milk) and 4b (cheese) formulas last week, the net effect in producer pay prices will be zero.
That’s because increases on the cheese side (by increasing whey factors) is offset by decreases in butter and powder, writes Rob Vandenheuvel in the California Milk Producers Council weekly newsletter last Friday. Hearings on the proposed changes were conducted June 30 and July 1.
On the butter/powder side, make allowances for both were increases by roughly a penny per pound and the “f.o.b. California Price Adjustor for Grade AA butter” was up 1.76¢/lb. The net result of these changes decreases Class 2, 3 and 4a minimum prices 16.2¢/cwt.
On the cheese side, CDFA did not change the f.o.b. adjustor or make allowance. Land O’Lakes had recommended changing both, which could have resulted in Class 4b prices increasing by 23.6¢/lb.
CDFA did agree to a sliding scale on the whey factor used in the 4b formula, increasing a nickel for every 5¢ rise in the dry whey price between 25¢ and 60¢/lb. But Vandenheuvel says these are still far less than those allowed in the Federal Milk Marketing Order formulas.
In July, for example, the Federal Order whey factor added $2.05/cwt to the Class III minimum price. The maximum allowed by the CDFA changes will be 65¢/lb.
