California dairy leaders could soon learn the ramifications of a Supreme Court case that some fear may force a “do-over” of the 2015 Federal Milk Marketing Order hearing that sought a divorce from a state order dairy producers have long complained does not favor profitable milk prices.
Producers, dairy processors and industry experts testified during a three-month hearing in late 2015 on the merits of California joining the Federal Milk Marketing Order. During that hearing it was predicted the U.S. Department of Agriculture would have a decision ready for California milk producers to vote upon by late 2017.
That decision is still forthcoming, and now could be postponed indefinitely pending outcome of a Supreme Court case that challenges the use of administrative law judges by the USDA and other government agencies.
Prior to the Federal Register notice in early February that put the California FMMO on hold, dairy producers in California asked the California Department of Food and Agriculture for a one-year boost in producer milk prices. The state cited the ongoing FMMO process in denying dairy farmer’s request.
In a letter from the state’s three dairy trade associations to U.S. Agriculture Secretary Sonny Perdue, dairy leaders want the USDA to move ahead in the rulemaking process and not wait on the Supreme Court’s decision. The letter outlines unprofitable economic conditions for California producers since the 2015 hearing that requested California be allowed to join the FMMO.
Dairy producers pressed Perdue during his visit to the World Ag Expo in Tulare, Calif. to move quickly on the FMMO issue as every day they continue to be regulated by the state order is another day of unprofitable milk prices for those dairy producers remaining in California. Perdue said his hands were basically tied by the court case and could not comment on the concerns of California dairy producers.
Since 2015 more than 170 dairies representing 11 percent of the state’s dairy industry have gone out of business due to poor economic conditions. California dairymen have long been at a competitive disadvantage under the state pricing system, which at times has trailed federal milk prices by more than $1 per hundredweight.
Annie AcMoody, director of economic analysis with Western United Dairymen, says the hope is to avoid a complete “do-over” of the three-month hearings, which would set the whole process back several years. To achieve this, the USDA will hire a judicial officer to review the entire record from the 2015 hearing. That officer could either ratify the record as complete after reviewing it, or could seek additional feedback, she said.
Should the judicial officer ratify the hearing record as is, a decision on the FMMO could be forthcoming by November, pending outcome of a producer referendum on the matter. If that record is not ratified, another comment period would be forthcoming and any possible implementation of the new FMMO could come in early 2019.