HANFORD — It hasn’t been a good week for dairy operators seeking a favorable change in California’s wholesale milk pricing formula.
The California Department of Food and Agriculture decided Tuesday not to grant a requested increase for milk made into cheese and whey. Milk producers were asking for 46 cents more per hundredweight of blended milk. Instead, CDFA Secretary Karen Ross took a 12.5 cent increase imposed this summer and extended it through June 2014.
That left widespread disappointment among local dairy operators who have struggled through extended losses dating back to 2009. The conditions have taken their toll on Kings County’s influential dairy industry, with 22 operations reportedly going out of business in 2012.
“Twelve cents is not really providing any value as far as price relief,” said Dino Giacomazzi, Kings County Farm Bureau president and a Hanford dairy operator. “We’re getting pennies when we need dollars.”
Dairymen accuse CDFA of being partial to big cheesemakers like Leprino Foods. CDFA officials say they are trying to balance the needs of both groups.
Some dairy farmers were especially discouraged by this week’s announcement because they thought they had an agreement with processors going into a CDFA hearing last month.
The tentative, informal deal to raise milk prices apparently collapsed, leaving a debate among producers about what steps to take next.
Most think something needs to be done to prevent more dairies from going belly up. The market is slowly improving, but not fast enough to make up for past losses.
“[This week’s] decision once again makes it clear that the only way to restore equity to milk pricing in California is by joining the federal milk marketing order system,” said Joe Augusto, president of the California Dairy Campaign based in Turlock.
A proposal sponsored earlier this year by Rep. David Valadao, R-Hanford, to allow producers to do that was part of a proposed farm bill package that died in Congress this year.
Producers are being paid at least $1-a-hundredweight less that they would be getting if they dropped out of the California system and joined a nationwide pricing mechanism known as the federal milk marketing order, according to CDC.
But not everybody is sold on joining a national pricing system run by the U.S. Agriculture Department from Washington, D.C.
“It’s the next best mousetrap,” said David Lemstra, who operates a Corcoran dairy with 2,400 milk cows. “It could be better than what we have currently, but I don’t know if it’s the answer. We’ve created in California a broken system.”
Lemstra wants pricing to be competitive with other states.
“CDFA is not going to do anything in the short term,” said Jamie Bledsoe, who finished clearing out the cows from his closed Riverdale dairy this week.
Giacomazzi wonders if dairy co-ops can could drop out of the state pricing scheme and come up with their own solution — a solution that has proved elusive in the complex world of government-managed dairy pricing.
“We need a more active process to get to a solution,” Giacomazzi said. “The producers and the processors are ultimately the ones that are going to have to figure this out.”
The reporter can be reached at 583-2432 and at firstname.lastname@example.org. Follow him on Twitter @SethN_HS.