Farmers renew push for higher milk price

jholland@modbee.com
and MARC LIFSHER
Los Angeles Times
May 21, 2013 

— Dairy farmers Monday urged the state yet again to boost minimum prices they get from processors.

Western United Dairymen, based in Modesto, and allied groups asked the California Department of Food and Agriculture to increase the price for milk that is made into cheese.

They said dairy farmers continue to go out of business because of a mismatch between milk prices and production costs, especially that of feed corn.

"We're not done with dairy farms closing," said Michael Marsh, chief executive officer at Western United, after the hearing before Food and Agriculture Secretary Karen Ross.

She also heard from processors, who argued that the proposed increase for cheese would put California at a disadvantage against other major dairy states.

Ross has not yet made a decision.

Milk is the top-grossing farm product in the Northern San Joaquin Valley and statewide, but farmers say they have operated at a loss over much of the past half-decade because of high production costs.

Each month,the state sets minimum prices that processors must pay, based on complex formulas that take market conditions into account.

The highest prices are for milk bound for the fluid market, a relatively small part of the total. Minimums also are set for milk that becomes cheese, butter, ice cream, yogurt and other products.

Much of Monday's argument was about whey, which is left over from cheesemaking and sold on the global market to makers of products such as infant formula and energy bars. Dairy farmers argue that the minimum cheese prices have not reflected enough of the whey value.

The Dairy Institute, which represents processors, counters that whey production is expensive and most cheese plants do not turn it out in large volume.

One that does is the Hilmar Cheese Co. plant on Lander Avenue, the world's largest producer of cheese and whey.

The Dairy Institute said it would like to solve the dilemma faced by farmers, but not with market interventions that would lead to higher prices for consumers.

"We need dairy farmers, and they need us,"said Rachel Kaldor, executive director of the Sacramento-based group.

Western United and its allies asked Ross to add a $1.20 surcharge per 100 pounds to the minimum price of milk bound for cheese plants. It stood at $16.92 as of April.

One hundred pounds of milk is roughly 12 gallons.

Dairy farmers have pressed their case for higher prices in hearings, rallies and other venues. They are seeking passage of Assembly Bill 31, which they said would bring California's pricing structure more in line with the federal system.

The bill, introduced by Assemblyman Richard Pan, D-Sacramento, has drawn opponents.

"It's a terrible idea," said Assemblywoman Susan Eggman, D-Stockton.

Modesto Bee staff writer John Holland can be reached at jholland@modbee.com or (209) 578-2385.

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