California Dairies Not Disadvantaged By Farm Bill

July 2, 2012 08:22 AM
 

Some California opponents of the dairy portion of the current version of the Farm Bill claim the state’s dairy farmers are disadvantaged because feed costs are higher in the Golden State.

But a comparison of the last 17 quarters of feed costs suggest otherwise, notes Rob Vandenheuvel, general manager of California’s Milk Producer Council. Vandenheuvel compared feed costs collected by the California Department of Agriculture to national prices published by the United States Department of Agriculture.

There are times when feed California feed costs are higher (7 of 17 quarters) but there are more times when they are not. “But on balance, over the past 17 quarters… (which covers the past four-plus years since the Congressional energy policies started dramatically impacting our nation’s feed costs), the feed costs calculated in the Senate Farm Bill have averaged 27¢/cwt above the estimated feed costs in California,” says Vandenheuvel.

The bigger difference comes in milk price. Over those same 17 quarters, California’s blend price has average $1.45/cwt less than the national all-milk price. So the difference in margin is almost exclusively driven by California’s milk price, not feed costs, he says.

“We absolutely need the policy changes in the Farm Bill to help us with national milk price volatility, but Congress isn’t going to fix California’s milk price with the Farm Bill. That’s up to us to fix ourselves,” says Vandenheuvel.

Note: California has its own state-side milk marketing order and does not participate in the Federal Milk Market Order system.

For a complete copy of Vandenheuvel’s analysis, click here.
 

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