California Dairy Producer Groups Join Forces for Change in Valuing State’s Whey Price

April 8, 2012 07:55 PM

Western United Dairymen and a coalition of major dairy interests will collaborate in drafting and developing testimony for the upcoming hearing.

Two groups representing California dairy producers will join forces to seek changes in the state’s milk pricing system.
The two groups, Western United Dairymen (WUD) and a coalition presenting several major dairy interests, had filed petitions for a hearing with the California Department of Food and Agriculture (CDFA) last month seeking identical adjustments in how whey is valued in the state’s 4b formula.
The CDFA Secretary granted the hearing on the petitioned changes. It is scheduled for May 31 and June 1, 2012.
WUD president and California dairy producer Tom Barcellos said his association’s board had recently directed staff to invite coalition members -- California Dairies, Inc., Land O’Lakes, Dairy Farmers of America, the Alliance of Western Milk Producers, Security Milk Producers, Milk Producers Council and California Dairy Campaign -- to collaborate in drafting and developing testimony for the upcoming hearing.
"The WUD board felt that since the two petitions were seeking exactly the same changes to the 4b formula, that efficiency and effectiveness of the testimony might be enhanced by sharing thoughts and ideas amongst the producer side of the equation," Barcellos writes in the April 6 edition of WUD’s "Weekly Update." "WUD staff did just that and extended the invitation on March 20."
Barcellos reports that in a letter dated March 28, 2012, David Walsh, an attorney with the law firm of Paul Hastings, LLP from Los Angeles, responded. Walsh indicated that, on behalf of his clients who had invited to collaborate, he was accepting WUD’s invitation to work together to develop testimony for the hearing next month.
"The WUD board is pleased that Mr. Walsh’s clients have accepted our invitation to move forward," Barcellos notes. "We recognize the importance to producers of a positive outcome to the upcoming hearing."
California dairy producers contend they’re losing millions of dollars each year because the whey factor in the state’s milk pricing system is under-valued compared to federal order levels. They’re pushing for change in the state’s Class 4b minimum price formula, which sets the price of milk used in cheese production and includes a factor for whey. They want CDFA to replace the current formula with one that more closely tracks the market direction of federal orders’ Class III whey value.
Meanwhile, the third in a series of four meetings, held by the CDFA to look into California’s long-term dairy pricing issues, will be held Friday, April 13 in Sacramento. The meeting will be in the CDFA auditorium at 1220 N Street, Sacramento beginning at 1 p.m.
WUD’s CEO Michael Marsh has made it clear that producers’ profitability should be front and center in the conversation. "Finding a way to increase competition for milk in California will be crucial to ensure sustainable milk prices in the state," Marsh says. "WUD will be an active participant at these meetings and will make sure proposed reforms benefit California dairy families."

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