Dairy Industry Waiting for CDFA Decision
By Patrick Cavanaugh, Editor
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| Out of business dairy #1 |
The dairy industry continues
to engage the California Legislature with any information to educate them about
the ailing California dairy industry, following a special hearing Sept. 12, with
CDFA Secretary Karen Ross.
The hearing was to consider
a deal that would 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 of 46 cents per CWT during the next year on milk going into
cheese-making.
Ross must make a decision by 62 days following the hearing date.
Among the witnesses in
support of the dairy petition was Dr. Richard Sexton, who is the chair of the
Agricultural and Resource Economics at UC Davis. Sexton is also the presiding
president of the American Society of Agricultural Economists.
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| Out of business dairy #2 |
“We are waiting for a decision from Secretary Ross
and continuing to update the legislature on the dire financial situation in the
dairy industry,” noted Michael Marsh, Chief Executive Officer with the
Modesto-based Western United Dairymen.
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.
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| Out of business dairy #3 |
“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 31was 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. It was unfortunate that Kawamura agreed to transfer
wealth from the famers to the cheese makers, given everything else that hit
California dairy farmers beginning in 2008,” said Marsh.
“Since the change, there has been a transfer of 940
million dollars from the dairy farmers to the cheese makers. It was just
another nail in the coffin for so many dairies that have since gone out of
business,” said Marsh.
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| Out of business dairy #4 |
We need to close the gap, between what we receive for
milk going into cheese making in California and what dairy
farmers outside the state receive for the same type of milk,” said Marsh.
Labels: CDFA Karen Ross, Dairy Industry Waiting for CDFA Decision, Michael Marsh, Out of Business dairies, Western United Dairyman
