California wants to join federal milk marketing order

A decision on the California dairy industry's request to join the federal milk marketing order and leave the state order could be delayed due to the large amount of legal briefs and paperwork that must be considered prior to a formal decision.

California milk FMMO may take a little longer

California dairymen petitioned USDA in early 2015 Hearings to join federal milk marketing order ran from September thru November Final FMMO decision may happen in early 2017

Last year the California dairy industry petitioned the U.S. Department of Agriculture to join the federal milk marketing order (FMMO).

Those hearings included two months of testimony for and against plans put forth by California’s three producer cooperatives and several other dairy groups.

At the heart of the matter remains what the cooperatives and their producer allies call “the California Discount,” or the price state cheese makers pay for milk compared to what processors pay for the same milk under the federal orders.

At the end of 2014, California dairy producers were coming off their highest ever pricing for milk under the state order. That year, the price for cheese milk on the state order averaged $19.93 per hundredweight (cwt.) while their federal order counterparts were paid $2.41 more, or $22.34 per cwt. for their cheese milk.

The hearings concluded in November, setting up a timeline that called for:

  • A recommended decision in Aug. 2016;
  • Legal briefs related to that decision in Oct. 2016;
  • A final USDA decision in Jan. 2017;
  • A producer vote on the USDA decision in May 2017; and,
  • Potential implementation of a California FMMO in Aug. 2017

According to Annie AcMoody, director of economic analysis with the California-based Western United Dairymen (WUD), the timeline might be a “bit optimistic” given the large amount of legal briefs the USDA is still wading through in response to the hearings and the briefs filed after the hearings.

Also of concern, according to Anja Raudabaugh, chief executive officer for WUD, will be whether the producer vote next year is done by bloc vote – the milk cooperatives voting on behalf of their members – or by individual ballot of the cooperative members.

California has three major milk cooperatives – Land O’Lakes, Dairy Farmers of America and California Dairies, Inc. – that represent more than 75 percent of the milk produced in the state.

A combined petition by the cooperatives was filed earlier in the year, which started the process of the FMMO hearings in Fresno, Calif.

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