By Patrick Cavanaugh, Editor,
and
Laurie Greene, Associate
Editor
On Monday Aug. 5, CDFA
Secretary Karen Ross should answer a dairy petition presented to her July 19
regarding implementing a cheese price deal that will help dairy farmers
throughout California.
“If she does grant the
petition for a hearing, then we will go to the hearing and try to get the deal
incorporated and implemented as quickly as possible to help the dairy farmers
in the state,” said Michael Marsh, Chief Executive Officer with the
Modesto-based Western United Dairymen. “We requested implementation as of Sept.
1, 2013, so we can get money to the dairy farmers as quickly as possible,” said
Marsh.
On July 12, AB 1038, authored
by Dr. Richard Pan (D-Sacramento), unanimously approved by the Senate Ag
Committee on a 3-0 vote, with the Chair Cathleen Galgiani, (D-Livingston) and
her republican colleagues, Tom Berryhill (R-Twain Harte) and Anthony Cannella, (R-Ceres) to move the bill
after they were informed that a deal had been struck between the cheese makers
and dairy producers. The deal was negotiated on behalf of the California dairy
families, represented by Pan, and the cheese makers.
The deal was to both adjust
the whey factor in the 4b cheese milk formula by raising the cap from 75 cents
per hundredweight (CWT) to $1 per CWT, and provide an additional surcharge,
during the next year, on milk going into cheese-making of 46 cents per CWT.
According to Marsh, “The
value of whey is capped at 75 cents per CWT, which is ridiculous, as we have
seen whey values as high as $4 per CWT in other states back when we were
getting 25 cents per CWT as our cap.”
“This increase would add an
additional $110 million to the pool of California dairy farmers. At the same
time, it would not cost consumers a penny as it simply redistributes assets
from the cheese makers back to the farmers.” said Marsh.
“This current process is an
outgrowth of our original AB 31 legislation that we introduced last December on
the first day of the legislature,” said Marsh. “Since that time there have been
ongoing negotiations between members of the legislature and cheese makers trying
to get some relief for the dairy families of our state.”
AB 31 was intended to
reconnect our cheese price as best we could back to the marketplace. “Unfortunately,
CDFA Secretary A.G. Kawamura, at the request of cheese makers in California in
2007, disconnected the cheese milk price from the marketplace, and we have been
struggling ever since to reconnect it. AB 31 would have closed the gap, between
what we receive for milk going into cheese making in California and what is
received by dairy farmers outside the state for the same type of milk, ” said
Marsh.
“It was unfortunate the
Kawamura agreed to transfer wealth from the famers to the cheese makers, and
with everything else that hit California dairy farmers beginning in 2008, it
was just another nail in the coffin for so many dairies that have since gone
out of business.”
The hearing petition sent to
Secretary Ross was signed by Western United Dairymen, as well as California
Dairies Inc., Milk Producers Council and the Dairy Campaign.
Marsh noted that on Wednesday,
July 31, CDFA emailed him stating that Land O’ Lakes had sent a letter to
Secretary Ross to grant the petition for a hearing. “Land O’ Lakes also
recognizes that California Dairy farmers need some relief,” Marsh said.