Quota passage clears path for Calif. FMMO

California dairy producers have approved the state’s Quota Implementation Plan, a crucial component in moving ahead with their efforts to join the federal milk marketing order system.

The producer referendum showed overwhelming support for the measure, with 87 percent of voters in favor,

Producer groups are pleased with both the outcome and the turnout.

The department received 703 ballots of the 1,059 sent out with 613 in favor of the plan. Those in favor represent nearly 91 percent of the milk volume produced by voters.

“It was a huge vote in favor, even beyond our best projections,” said Lynne McBride, executive director of the California Dairy Campaign.

“We think it’s a very strong indication dairy producers want to move forward with the effort to consider a federal milk marketing order for our state,” she said.

CDC has long called for California to join the federal system to align its milk prices with prices in other major dairy producing regions in the country. Passing the quota program was a key point in the process, she said.

The program pays quota certificate holders $1.70 per hundredweight above the state blend price for the amount of milk covered by their certificate. Together those certificates are worth more than $1 billion.

Quota is a critical asset that dairy producers have invested in for years, McBride said.

“We think it’s critical that it be maintained,” she said.

The quota program has been part of the state milk marketing order for about 50 years, but quota doesn’t exist in federal orders. Language sponsored by Rep. David Valadao, R- Calif., in the last farm bill allows California to maintain a stand-alone quota program if it joins the federal order system.

“The strong vote really shows us dairy producers are looking for a new system for milk pricing,” McBride said.

Western Unite Dairymen is pleased with the turnout and outcome, said Annie AcMoody, WUD director of economic analysis.

“It was a critical step to be able to move forward in the FMMO process,” she said.

The three dairy co-ops that petitioned USDA to allow California to establish a federal order made it clear they would not continue to move forward without a plan in place for quota, she said.

California Dairies, Inc., Dairy Farmers of America and Land O’Lakes filed that petition in February of 2015.

Milk Producers Council is ‘extremely excited” that producers resoundingly and overwhelmingly voted yes to the quota plan, said Kevin Abernathy MPC general manager.

“It’s the start of a new day,” he said.

Abernathy said it means California dairy families have the opportunity to “end the insanity” of the state system and join the federal system.

Month in and month out, California produces receive the lowest milk prices in the country, he said. So instead of doing the same thing and expecting a different outcome, dairy producers get to do something different, he said.

The next step is a final decision from USDA as to how a federal order would operate in California, followed by a producer referendum on the measure.

 

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