Department’s 4b hearing announcement misses mark
The California Department of Food and Agriculture (CDFA) Friday rendered a decision on its hearing held May 31 and June 1, 2012. The hearing had been called on a petition filed by Western United Dairymen (WUD) seeking significant adjustment to the whey factor used in the California pricing system for milk processed into cheese. WUD’s petition requested better alignment with regulated prices outside California. A separate petition requesting the identical relief sought by WUD was filed by lawyers representing the state’s cooperatives and other producer groups.
In a letter sent to CDFA Secretary Karen Ross this afternoon by WUD President Tom Barcellos, he expressed the Board’s disappointment and displeasure with the CDFA decision.
In its petition, WUD requested modifying the current sliding scale in the Class 4b formula to allow the whey factor to more closely reflect the whey value generated by the current Class III formula. While the Secretary announced a change in the sliding scale, it fell far short of what was requested. With the current price of whey ($0.4975/lb), the changes will generate an extra 6.25 cents to the Class 4b price. The sliding scale that WUD and the other group advocated for would have generated an extra $1.09/cwt to the Class 4b price. The changes ordered by the Secretary will become effective August 1, 2012.
Interestingly, the order of Secretary Ross varied from the recommendation of the Hearing Panel which was to allow for no change. The Secretary also announced the creation of “the California Dairy Future Task Force charged with developing recommendations for structural changes to our dairy pricing formula” in a separate communication to the industry. President Barcellos indicated that Western United was interested in learning more about and participating with the Task Force.
The Board of Directors also directed staff to plan and establish industry wide meetings over the next several weeks with Federal Milk Marketing Order Administrators as forums to educate producers on federal orders. July 23, 2012 WUD Friday Update