Merced dairies hope for positive results in USDA milk market hearing

Dairy farmers and organizations in Merced County are awaiting a U.S. Department of Agriculture public hearing next month they hope will put the state’s milk industry on the same playing field as in other states.

The public hearing to consider establishing a federal milk market order for California will begin in Clovis on Sept. 22. Currently, California operates under a state-run order. Petitioners argue they are shortchanged under prices set by the state. Dairy processors who oppose the petition hope to keep the prices low for competition purposes.

“The current system doesn’t allow for whey prices to go to the same level as the rest of the states in the nation,” said Frank Mendonsa, president of Western United Dairymen. “We’re held to a lower price, and that’s what dairymen in California would like fixed.”

In 2013, the most recent data available, milk was the top commodity in Merced County, said David Robinson, Merced County ag commissioner. Merced was the No. 2 milk producer in the state that year, after Tulare County. And, California was the No. 1 milk-producing state in the country, according to the USDA.

“It is a big issue for the future of the dairy industry,” said Ray Veldhuis, a Winton dairy farmer. “With the water situation, the drought we’re in, and the value of land to other crops … the dairy industry is having a very difficult time surviving.”

Western United Dairymen has voiced strong support for a proposal made by three agriculture cooperatives – California Dairies Inc., Land O’Lakes Inc. and Dairy Farmers of America.

“Our proposal is based on the idea that even though we have a state-regulated system in California, the marketing of milk has not been as orderly as it could be as under a federal system,” said Eric Erba, the senior vice president of California Dairies Inc. When prices in California are low, that may not be true for prices in other states, he said. Including California in the federal order would mean moving as one unit, he said.

Anja Raudabaugh, chief executive officer for Western United Dairymen, said the organization supports the cooperative’s proposal because it keeps the current system regarding quotas and pooling. “It’s what it (the federal order) would look like if we could have our cake and eat it, too,” she said. “It’s a very lightning-rod issue for dairymen in Merced because many are large quota holders.”

The hearing that begins in September could take months. Testimony will begin with those who made proposals, but anyone else could provide testimony after that. After the USDA hears all the testimony, it will draft an order that will go to dairy farmers for a vote. In total, the process could last past December 2016, Erba said.

This story was originally published August 24, 2015 at 6:09 PM with the headline "Merced dairies hope for positive results in USDA milk market hearing."