The three largest dairy cooperatives in California, unhappy with their statewide milk-pricing plan, petitioned the USDA to create a milk marketing order for the state, according to the news site Dairy Herd Management. With 1.78 million cows, California is the largest milk-producing state in the country. It produces 21 percent of the milk in the United States, says USDA, compared to 15 percent from Wisconsin. Florida and New York each produce about 7 percent.
California has operated under its own milk-pricing system for decades. It was isolated for years from the rest of the U.S. dairy market because of the long distances from eastern and midwestern dairy farms, and focused on a burgeoning local market.
“This is huge news for the dairy industry,” the editor of the Cheese Reporter, based in Wisconsin, told The Business Journal. The Business Journal said, “In recent years, dairy farmers operating under federal orders have received higher prices, especially for dry whey used for cheese production.”
Cooperatives California Dairies, Dairy Farmers of America and Land O’ Lakes, who together produce 80 percent of the state’s milk output, say their members would receive more equitable, market-based prices under a federal order, according to Dairy Herd. It cited a comparison of the price paid under federal milk marketing orders for milk used to make cheese–$22.34 per 100 pounds of milk in 2014, vs the California average of $19.93, a difference of $2.41. In 2013, the California price was $1.57 below the federal average, says Dairy Herd.
“Changes made to the California state order before 2011 resulted in California’s dairy farm families enduring unsustainable pricing for their milk,” said the cooperatives in a statement.
The process could take 14 months to complete, said Dairy Herd. “USDA plans to conduct a series of public outreach meetings throughout California in early 2015.”
The request for a federal marketing order is available here. A seven-page USDA question-and-answer sheet about milk orders and California is available here.