California Dairy Group Seeks Emergency Price Relief, Whey Value Changes

August 7, 2012 08:52 AM
California Dairy Group Seeks Emergency Price Relief, Whey Value Changes

Dairy producers ask state ag department for temporary increase of 50 cents per cwt. on all classes of milk to help ease financial stress from high feed costs.

One California dairy group is not taking “no” for an answer.

Western United Dairymen (WUD) filed a petition Monday with the California Department of Food and Agriculture (CDFA), requesting an emergency hearing for price relief for the state’s financially stressed dairy producers.

WUD’s request comes about two weeks after a state panel denied a similar whey increase request. Although CDFA Secretary Karen Ross overruled the panel’s denial and raised the whey factor slightly, California dairy producers were unhappy with the small increase.

Monday’s emergency hearing request targets two areas of the state’s dairy pricing system.

The first is temporary. It seeks emergency price relief due to the current financial pressures on dairy producers, notably due to extremely high feed costs. WUD is requesting a six-month increase of 50 cents per cwt. on all classes of milk. The group also proposes a permanent exemption from the whey component on the first million pounds of bulk milk produced monthly.

The second request calls for changes to the whey value of the Class 4b formula. WUD wants the cap of $0.75 per cwt. to be removed and, in its place, proposes a scale that mirrors more closely the whey value in the Class III federal order price. WUD is also recommends a dry whey exemption on the first 100,000 lb. of milk processed daily by cheese makers. The exemption would be only on the whey portion of the Class 4 formula.

California’s Class 4b price is what handlers pay for farm milk for cheese and whey production.

“WUD is deeply concerned about the current plight of dairy families and while a 50-cent temporary price increase will not make dairy margins positive again, we believe that such an emergency price relief is required to at least slow the bleeding,” said WUD President Tom Barcellos.

To download a copy of the petition, please click here.

Barcellos said that while WUD appreciated Ross’s price-increase decree last month to change the 4b formula despite the panel’s denial, the group believes it fell short of a fair method for pricing whey.

Based in Modesto, Calif., WUD is a voluntary membership organization made up of more than 60% of the milk produced in California. It represents members in labor law, environmental regulations, pricing issues, and state and federal legislative efforts affecting the dairy industry.

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