California Expects Whey Factor Decision by Mid-October

September 14, 2013 06:20 AM
California Expects Whey Factor Decision by Mid-October

Decision timeframe would give state’s ag department time to implement any changes by Nov. 1.

The California Department of Food and Agriculture (CDFA) is expected to announce by mid-October its decision on the Sept. 12 hearing on whether to increase the whey factor price for the state’s dairy producers.

Thursday's hearing in Sacramento stemmed from a petition from dairy producer groups to increase the current cap for the whey scale factor to $1 per cwt.

Sources say the announcement’s mid-October timeframe would give CDFA time to implement any changes by Nov. 1.

Read a Milk Producers Council report on the Sept. 12 hearing in Sacramento here. (See page 4.)

A report from Western United Dairymen on the hearing can be found here.

The petition was proposed by Western United Dairymen, California Dairies Inc. (CDI), Milk Producers Council and California Dairy Campaign and agreed to in July by Assemblyman Dr. Richard Pan (D-Sacramento) and the processor-focused Dairy Institute of California.

The proposal has two basic tenets, according to CDI's Eric Erba, who spoke at Thursday's hearing. First, there will be an emergency price relief for up to one year in an amount of no more than $.46 to be assigned to Class 4b milk. This will replace the existing emergency price relief. Second, the sliding scale used to value whey in the Class 4b formula will be restructured to result in a new ceiling of $1.00 per cwt. contributed to Class 4b, achievable at current market prices.

The long-term solution also includes a California Dairy Future Task Force, whose members are dairy producers and processors. The task force is charged with providing economic research materials and proposed structural changes to the California dairy industry’s milk pooling and milk pricing programs.

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