Dan Walters: Milk price squabble hits Jerry Brown

02/18/2013 12:00 AM

02/26/2013 8:18 PM

Thirty-three years ago, while seeking votes for his second presidential campaign in rural Wisconsin, Jerry Brown was hit with questions about federal milk-price policy, no small matter in a state of self-proclaimed "cheeseheads."

Brown muttered something that sounded sympathetic to politically influential dairy farmers, and Wisconsin voters later gave him his only delegate to the 1980 Democratic convention.

Brown no longer yearns for the White House, but he's back in the governorship and also back in the politics of milk – a firefight between California dairy farmers and cheese makers over prices.

Since the Great Depression, the state has directly controlled minimum prices that dairy farmers must receive for milk, which, of course, translate into what consumers later pay for dairy products.

California dairymen complain loudly that they are being driven out of business by prices that don't cover the rising cost of cattle feed. Even though the state raised processing-milk prices 30 percent last year to $17.50 per 100 pounds, dairymen say they're losing $3 per hundredweight.

Brown's director of food and agriculture, Karen Ross, recently granted another temporary increase of 25 cents per hundredweight, a fraction of the $1 increase they had sought, saying she will monitor the feed market to determine whether other adjustments are needed.

Unsatisfied, dairymen persuaded Assemblyman Richard Pan, D-Sacramento, to introduce a bill that would alter the state processing-milk pricing methodology, tying it to federal price supports and thus raising the price by about the $1 they sought from state regulators.

The bill is drawing stiff opposition from cheese makers, saying it will make their products more expensive and thus help competitors, especially those in that other big cheese-producing state, Wisconsin.

Wisconsin cheese makers seem to agree. The Wisconsin State Journal of Madison quoted one Wisconsin cheese executive, David Fuhrmann, as saying a boost in California milk prices would generate "opportunities to gain market share and grow our business in Wisconsin."

While California's dairymen say dozens of dairies have been forced to close by too-low prices, the state's cheese makers hint that they may move operations to states where other costs, such as water, regulation and taxes, are lower. California cheese-making giant Hilmar Cheese Co., which buys 11 percent of state milk production, already has a big plant in Texas.

Underlying the situation, meanwhile, is steadily declining consumption of fluid milk in California and what state officials say is persistent overproduction.

No one knows how this battle will turn out. We used to say that money is the mother's milk of California politics. But in this case, milk itself is a high-dollar political issue.

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