The Trump Administration will have to oversee whether or not California dairy producers will join the Federal Milk Marketing Order (FMMO).
While California leads the nation in milk production, producers wonder how long it will last.
“I think we’re going to turn the corner here soon in California to where we’re going to be short of milk,” said Simon Vander Woude of Merced, Calif.
That’s due to a number of issues: overtime pay laws, water, consolidation, and dairy investments in other states.
“Many other parts of the country are growing in milk supply,” said Greg Hooker of Chowchilla, Calif. “I think that’s directly related to lower milk prices we’re seeing. People aren’t motivated to make milk here if you’re not getting paid the cost of production or better.”
Those payments push some dairy producers to make a change. USDA held hearings in California last year to see if producers want to join the FMMO.
Many states are part of the order, which is designed to make sure producers get a reasonable minimum price for milk from its processors. California has its own order.
“It will be really dependent on what that proposed rule looks like and if that moves forward,” said Jim Dickrell, editor of Dairy Herd Management. “It could have ramifications for the rest of the country too.”
USDA is sorting through the testimony and plans to issue a proposed rule in 2017. After a comment period, a majority vote among California producers is needed to implement the revised proposal. A move to the federal order is supported by trade organizations and three major co-ops representing 80 percent of the milk industry.
“There’s a segment of producers who will vote for it no matter what it says,” said Vander Woude “Then, there’s a segment of producers who will vote against it no matter what it says. Most of us are waiting to see what’s in it. If they’re going to give us the upper Midwest order and plug it into California, it’s probably not going to work.”
Some industry leaders say both orders set minimum prices but California’s minimum price has been lower than the FMMOs across the board in all classes.
A big change the state with the largest milk production will have to decide.
Land O’ Lakes, California Dairies Incorporated and Dairy Farmers of America are the co-ops supportive of joining the order and the petitioned to join.