California Dairy Group Petitions for Milk Price Increase

Source: Western United Dairymen Weekly Update

Western United Dairymen has filed a petition with the California Department of Food and Agriculture (CDFA) asking for a temporary .50/cwt. increase for all classes of milk.

The petition asking for an emergency hearing to consider a uniform increase to Class 1, 2, 3, 4a and 4b prices for a period of six months, from Jan. 1, 2010 through June 30, 2010, was approved Oct. 16 by the WUD board of directors at its regular monthly meeting.

In a letter to CDFA Secretary A.G. Kawamura, WUD notes that "California dairy families have suffered severe economic hardship in 2009. As a result many have gone out of business or acquired massive debt on top of eroded equity. The significant negative margins witnessed over the past 10 months have placed producers in a financial situation that will take years to repair. It was recognized that a pricing hearing over the past months could not have restored financial health, as it would have been impossible to fill the $5.00 to $8.00 per hundredweight gap needed to cover production costs. However, now with a modest recovery in the markets, a temporary uniform price increase could be of significant assistance to ‘stop the bleeding'.”

The Alliance of Western Milk Producers filed a petition on Oct. 5 requesting a Class 1, 2 and 3 hearing. In its petition, the Alliance asks for an emergency hearing to consider increasing the Class 1 price by .50/cwt. per hundredweight and Classes 2 and 3 by .26/cwt. each, which is the amount they were reduced as a result of the October 2008 hearing.

WUD President Ray Souza said, "While we support the efforts put forth by the Alliance of Western Milk Producers, we recognize more assistance is needed for California dairy families, and therefore ask for this expanded scope.”