Rep. Jim Costa Speaks to CDC Board and Membership

This week, Rep. Jim Costa, D-16, spoke to the CDC board and membership in the Turlock office to discuss the farm bill including the “California Milk Marketing Order Act,” ethanol policy, immigration and water issues.  Representatives Jim Costa and David Valadao, R-21, introduced the “California Milk Marketing Order Act” which was passed by the U.S. House Agriculture Committee as part of its farm bill proposal. CDC members commended Rep. Costa and Rep. Valadao for their leadership in passing legislation that will enable California to continue its state quota program in the federal order system.  Once the authority to retain the quota program is passed by Congress, in order to join the federal order, dairy producers will vote in a statewide referendum. Each federal order is different so CDC will continue to advocate for federal order rules that work best for dairy producers across the state. 

More than $2.00 difference between 4b and Class III

For just the first quarter of 2013, the difference between the California 4b cheese milk price and the federal order Class III price amounted to $2.01 per cwt. The gap between the 4b and cheese price is the most significant reason that California producer prices continue to be the lowest of any regulated state in the nation.

CDFA Statewide Cost of Production Data

This week, CDFA published its cost of production data that shows the 2012 cost of production averaged $19.03 per cwt while the average income was just $16.93 per cwt on average.  According to CDFA’s report in just one out of the last five years did producer income exceed production costs. That year was 2011 when the average income was 71 cents above production costs. According to CDFA, 1,563 dairies remain in the state after 105 exited in 2012.

Farm Bill

The Senate is scheduled to continue its consideration of the farm bill throughout next week. Watch the Senate floor debate live at www.cspan.org.  House Majority Leader Eric Cantor, R-Va., circulated a memo to House offices today reiterating his intent to bring the 2013 Farm Bill to the House floor in June. According to a recent analysis by the University of Missouri, the Dairy Security Act in the House farm bill would increase dairy producer net income by $.55 per cwt. However due to the fact that payments are made based on the All Milk Price, it is critical that California prices are in alignment with those paid in other states, as would occur under the federal order system, for California producers to realize the benefit.

Ethanol Policy

Reps Jim Costa and Pete Olson, R-Texas, introduced legislation that would allow ethanol produced from domestic natural gas to meet the volume requirements of the renewable fuel standard (RFS). The bill, titled “The Domestic Alternative Fuels Act,” or H.R. 1959, was introduced on May 14 and has been referred to the House Committee on Energy and Commerce. Costa stated, “Our bill will help stabilize feed prices and create some sanity in this policy through diversifying sources for ethanol production. American families and farmers cannot continue to pay for Washington’s unwillingness to reform the RFS.”

In April, Rep. Jim Costa and Rep. David Valadao, introduced the “Renewable Fuels Standard Reform Act” to revise the federal government’s renewable fuel standard. The bill, which was introduced last Congress, eliminates corn-based ethanol requirements and caps the amount of ethanol that can be blended into conventional gasoline at 10 percent. CDC is part of a broad nationwide coalition that supports ethanol policy reforms including elimination of the corn-based ethanol mandate.

CDC Applauds Representative Costa for Passage of the

“California Milk Marketing Order Act” in House Agriculture Committee

TURLOCK, CA (May 29, 2013) – California Dairy Campaign (CDC) members applauded Rep. Jim Costa, D-16, for his leadership in passing the “California Milk Marketing Order Act” in the House Agriculture Committee passed farm bill. Representative Jim Costa, D-16, spoke to the California Dairy Campaign board of directors and membership to discuss the farm bill, ethanol policy, immigration and water issues at the CDC office in Turlock, CA.

“We commend Rep. Costa for introducing the ‘California Milk Marketing Order Act’ and the central role he played in its passage by the House Agriculture Committee,” stated CDC President Joe Augusto. The legislation was introduced by Representatives David Valadao, R-21, and Jim Costa, D-16, and cosponsored by all California members of the House Agriculture Committee. The legislation would enable California to retain its state quota system under the federal milk marketing order system.

“California’s Class 4b or cheese price continues to be well below the comparable federal milk marketing order (FMMO) Class III cheese price, amounting to an average $2.00 per hundredweight difference for the first quarter of this year,” explained CDC Executive Director Lynne McBride.  “Joining the federal order will bring California dairy producers prices in line with prices paid in other states and restore equity to our pricing system,” she stated.

“The latest cost of production data from the California Department of Food and Agriculture (CDFA) shows that dairy producers lost on average $2.10 per hundredweight in 2012,” explained McBride. “105 dairies went out of business last year. If California prices had been in alignment with federal order prices last year, the losses would not have been so great,” she concluded.

Comprised of more than 1400 farmer and rancher members, CFU advocates policies at the state and national levels on behalf of its membership throughout California. The California Dairy Campaign (CDC) is a grassroots organization of dairy farmers who are working to encourage lawmakers and the dairy industry to be more responsive to the needs of the family dairy farm in California. CDC is a member organization of CFU which is a state chapter of National Farmers Union (NFU). NFU represents more than 250,000 members nationwide. NFU works to protect and enhance the economic well-being and quality of life for family farmers, ranchers, and their communities.

Reminder: CDC Social set for May 29 in our Turlock office at 325 Mitchell Avenue.

Representative Jim Costa to serve as featured speaker.

Rep. Costa will discuss the ongoing farm bill debate in Washington, DC. He will also discuss the “California Milk Marketing Order Act” he introduced along with Rep. David Valadao, R-21, that was passed as part of the House Agriculture Committee farm bill.

RSVP to Bertha Medina in the California Dairy Campaign (CDC) office at 209-632-0885

CDC Urges CDFA to Increase Dairy Producer Prices

CDC Executive Director Lynne McBride testified before the California Department of Food and Agriculture (CDFA) hearing panel on Monday, May 20 to call for an increase in the 4b or cheese milk price so that it is closer to the price paid in the federal orders. CDC called for an increase in the 4b price that is equivalent to 80 percent of the whey value in the federal order system or $1.20 per hundredweight. CDC joined dairy producer organizations and cooperatives in calling for the increase.

Excerpt from CDC Testimony:

We call for an increase in the 4b price in the amount of $1.20 per hundredweight to bring the California 4b price in closer relationship with prices paid in other states. We consider this increase to be a compromise position due to the fact that it represents just 80 percent of the equivalent federal order Class III whey value. We believe this increase should remain in effect until substantial changes are made to our state dairy pricing system. Included on the last page of our testimony is a graph that shows the monthly losses that dairy producers have incurred since January 2002 through 2012. The pattern is clear that under our current pricing system the periods of net loses far exceed periods of profitability and the downturns are far more severe. The profitability experienced in 2011 was too short lived to counteract the tremendous losses incurred in 2009. The profits generated that year did not come close to outweighing the tremendous losses of 2009 and those losses continued into 2010.  Looking back at 2012 it is clear that dairy producer income was substantially below production costs for much of the year. Though in the fall of last year, it looked as though dairy operations would finally break even, soon after income started to drop and producers began once again to incur significant losses. The need for a price adjustment is clear. Dairy operations cannot continue to sustain chronic losses while there is considerable profitability experienced further up the food chain.

Farm Bill:

The Senate Agriculture Committee passed its version of the farm bill on May 14 and the House Agriculture Committee passed its version the next day. The House bill contains the “California Milk Marketing Order Act” introduced by Reps. David Valadao, CA-21, and Jim Costa, CA-16. The bill would enable California to retain its quota system as it considers entering the federal milk market order system.  CDC strongly supported the passage of the “California Milk Marketing Act” in the farm bill to enable California dairy producers to have the choice to enter the FMMO and bring prices paid in California in alignment with prices paid in federal order states.

Prices paid to California dairy producers continue to be significantly below prices paid in the federal order. Joining the federal order would restore some equity to state dairy prices. California’s Class 4b or cheese price continues to be well below the comparable federal milk marketing order (FMMO) Class III cheese price, amounting to a $2.30 per hundredweight difference in January of 2013. 

No dairy amendments to the farm bill where considered in the Senate, but an amendment to eliminate the inventory management provision in the Dairy Security Act was considered by the House Agriculture Committee. The amendment, called the Goodlatte–Scott Amendment, was defeated by a vote of 20 to 26, but is likely to be considered again during the House farm bill debate.

State Issues:

CDFA Calls Hearing on Temporary Price Adjustment

CDC Executive Director Lynne McBride plans to testify before the California Department of Food and Agriculture (CDFA) hearing panel on Monday, May 20 to call for an increase in the 4b or cheese milk price so that it is closer to the price paid in the federal orders. CDC is calling for an increase in the 4b price that is equivalent to 80 percent of the whey value in the federal order system.

AB 31

Lawmakers and staff continue to discuss changes to AB 31, legislation originally drafted to change state dairy pricing formulas to incorporate 80 percent of the federal order whey value and an exemption for small cheese makers. The legislation was later amended to include intent language which would not change state pricing regulations, but Assembly Agriculture Committee leaders pledged to work to find compromise legislation.

Water Board Inspections:

The Central Valley Water Board continues to work to achieve its goal of inspecting every dairy in the Central Valley by July 1, 2013. During inspections, it is important for dairy owners and operators to demonstrate that their nutrient management plans and waste management plants are being effectively implemented. For additional information contact the CDC office at 209-632-0885.

Reminder: CDC Social set for May 29 in our Turlock office.

Representative Jim Costa to serve as featured speaker.

RSVP to Bertha Medina in the California Dairy Campaign (CDC) office at 209-632-0885