Milk pricing could go federal under Valadao bill

Proposal would allow dairy farmers to dump California system

HANFORD — Dairy operators wanting to bypass California’s milk pricing system and switch to a federal milk marketing order would get their chance under a bill sponsored by Rep. David Valadao, R-Hanford.

Valadao’s bill, introduced in March with support from Rep. Jim Costa, D-Fresno; Rep. Jeff Denham, R-Turlock; and Rep. Doug LaMalfa, R-Richvale, was included last week in the proposed 2013 Farm Bill package.

The bill would give dairy operators the option of petitioning the U.S. Secretary of Agriculture to abandon California’s regional pricing scheme and join the federal milk marketing order, a move local dairy owners say would raise prices.

They say California is $1.50-$2 per hundredweight below prices in surrounding states.

“California’s pricing system has put us in a bad position,” Valadao said. “Putting us in the federal order puts us in the same boat as everyone else.”

The bill is partly a response to the fight going in California between producers and cheese processors over the price paid for whey, the milk byproduct once considered trash but now a commodity turned into protein consumer products.

Producers, hurt by an unprecedented soaring of feed costs amid low milk prices, have for months petitioned California Secretary of Agriculture Karen Ross to raise the whey price.

Processing companies have in turn argued that there is already overproduction in the state and that plants without whey processing capacity could go out of business.

The battle has given rise to AB 31, a producer-supported California bill that would raise whey prices up to 80 percent of the price established by the federal pricing system.

Processor organizations that have opposed AB 31, such as the Dairy Institute of California, aren’t taking a position on the Valadao bill.

“AB 31 would take a piece of how the federal order works, but without the rule that goes along with it,” said Rachel Kaldor, executive director of the Institute.

Processors would have some flexibility under the federal rules, she said.

Kings County dairy processors seem to be leaning toward joining the federal order, often out of disgust toward Ross and CDFA.

“I think I would probably support it,” said Peter De Jong.

“What do we have to lose anymore? We’re not getting any satisfaction.”

De Jong is a partner in one of the largest dairy operations in Kings County, with 16,500 milking cows on four dairies.

“It’s about time,” said Joe Machado, owner of a large dairy south of Hanford.

“We haven’t gotten any help from the state.”

The Farm Bill is likely to go up for a vote before the end of the year, Valadao said.