Farm Beat: Milk price debate resurfaces

It never fails. If you need a quart of milk for your cereal or a block of cheddar for tonight’s tacos, you can find it at a store.

The dairy industry – a key economic driver in and near Stanislaus County – seems to excel at marketing its products efficiently.

What you might not see is the tension that has long existed in California between farmers who produce the milk and many of the processors that put it in jugs or turn it into cheese and other products.

The farmers say they sometimes do not receive enough money to cover feed and other costs. The processors counter that farm milk prices cannot go too high if the state is to compete in the global market.

The debate has been going on for decades, and it will surface again in Clovis on Sept. 22. The U.S. Department of Agriculture will hold a hearing on a petition to change how farm milk prices are set in California. The proposal, which has drawn support from many farmers, would shift the industry to a federal pricing system after 80 years of having the state set monthly minimums.

“The importance of joining the federal order became even greater over the last five years due to the fact that prices paid to California dairy farmers were well below prices in the federal order system,” said Joe Augusto, a farmer in Tulare County and president of the Turlock-based California Dairy Campaign, in a news release.

The petition came from three farmer-owned cooperatives with processing plants in Stanislaus and Merced counties and beyond – California Dairies Inc., Dairy Farmers of America Inc. and Land O’Lakes Inc. Although they are technically both farmers and processors, they lean toward sending more money to the farm.

The petition is opposed by the Dairy Institute of California, which represents other processors. It offered an alternative that would require minimum prices for milk to be sold in fluid form to consumers, but make them voluntary for plants that turn out cheese, butter, ice cream and other products.

“With the right program, California’s dairy industry will thrive, so we’re committed to helping shape a plan that works for processors and producers alike,” Rachel Kaldor, executive director of the Sacramento-based group, said in a news release.

The USDA will use the testimony to draft a pricing system that will go to a vote of dairy farmers. The process could take about 18 months.

The average consumer need not attend the Clovis hearing, since such proceedings tend to be heavy on industry jargon and economic data. Experts will talk, for example, about “milk pooling,” which is a means of distributing payments to farmers around the state (and also what happens when a toddler unscrews her sippy cup).

This issue matters not just to us consumers, who would like affordable and plentiful dairy products, but to the thousands of people who work in dairy farming and processing in our region. More on the hearing, including the competing proposals in detail, is at www.ams.usda.gov/CAOrder.

This story was originally published August 14, 2015 at 2:18 PM with the headline "Farm Beat: Milk price debate resurfaces."