Bakersfield Californian via SM // By Chip Power
Bakersfield, California --A group of farmers plan to dump their dairy cows’ milk to protest low prices, and to point the media spotlight on their cause this Labor Day weekend.
The farmers are so fed up, they pledged to pool together the equivalent of 20 million pounds of milk, or 4 percent of national production, over a four-day span beginning Thursday.
The last dumping protest was held on July 4. There isn’t any way to verify this week’s participation, but the event has galvanized smaller farmers who complain government-set minimum prices are insufficient for them to make a living.
“We’re better organized than we were last time,” said farmer Frank Faria of Escalon, which is north of Modesto. Faria said dairy operators need to unite to get a fairer price.
The group, which is governed by federal laws that began in the 1930s, as well as California laws, wants the minimum price set at $14.50 per 100 pounds. The current support price is $9.90 for some kinds of milk, said Faria, though he said many California dairy farmers have production costs of $11.95 per 100 pounds.
In Hanford, farmer Xavier Avila said that farmers get about 80 cents of the price when a consumer buys a gallon for $3.89 or so.
Much of the California protest will involve dairy farmers with perhaps 600 cows, the organizers said, which would make them one-third the size of the typical dairy farm in Kern County. Avila said that the interest from Kern had been limited so far, noting that the businesses that operate on a smaller scale were unable to get the savings achieved by bigger farms in expenses for feed, veterinary services and the like.
He also said that some dairies planned for Kern were slated to be more real estate investments for owners looking to reduce capital gains taxes from other land sales, rather than as stand-alone farms that would succeed on their own merits.
California does not have its own federal milk pricing market order, though industry members say that a structure set up by the California Department of Food and Agriculture parallels the federal orders. In the world of milk pricing, it would take an act of Congress for the national protesters to succeed. Congress has wrestled with reforming dairy rules in farm bills for more than a decade, with limited results.
Faria, the farmer, said that consumers don’t realize how much money from their milk purchases goes to the farmer and how much the farmer pays for handling, processing, packaging, a grocer’s overhead and profits for the middlemen as well as the retailer.
The cries of disgruntled dairy farmers drew a figurative yawn from the president of the California Grocers Association, a private trade group. President Peter Larkin disputed whether California has among the highest retail milk prices in the United States.
“Something like that gives us a bad rap,” he said. “It’s unfair, because it’s a myth.” As far as the retail prices go, he described the market as competitive, and said prices fluctuate like they do with any other commodity: supply, demand, the vagaries of weather.
California historically has had some of the highest retail prices even as it has emerged as the biggest milk-producing state, studies show.
A 1998 study by by the U.S. General Accounting Office gave retail milk prices in 28 U.S. cities from 1991 through 1997. The study covered states with farm prices set by federal marketing orders, and therefore, excluded California.
However, an analyst with the group Consumer’s Union pointed out that retail milk prices in Los Angeles and San Francisco were higher than in all the cities listed in the GAO report during the report period.
As a result, consumers in California paid nearly $200 million more for milk than they would have if Arizona retail prices prevailed in California in 1998, Consumer Union analyst Elisa Odabashian said. Consumers also paid over $36 million more than if Utah/Idaho retail prices prevailed in California; and more than $35 million more than they would have if Oregon retail prices prevailed in California, she said.
“It has become very difficult for many of the dairies to make a living, " she said. “And they end up getting a bad rap, which is really unfair because they don’t really benefit from the prices at the grocery store.”
