News

California to consider changing milk pricing formula

The California Department of Agriculture will hold a public hearing September 12 in Sacramento to consider amendments to its milk pricing formula.

A petition from several producer groups proposes a modification to the sliding scale used to determine a dry whey factor in Class 4b milk pricing, along with replacing the current temporary price adjustment with another system. According to the petition, there’s enough of a gap between the state’s Class 4b price and other comparable milk around the U.S. that the price differential between the Federal Order Class three and California’s Class 4b averages $1.66 per hundredweight, going as wide as $2.36 in December 2012.

In July, California’s dairy producers and cheese-makers reached a truce over the state’s Class 4b pricing formula where cheese-makers would pay an extra $.46 per hundredweight. That was less than what milk producers were hoping for, but according to the Dairyherd Network, processors say they don’t want to put themselves at a disadvantage to other dairy states.

Temporary_Price_Adjustment_&_Whey_Valuation_Hearing_-_September_12,_2013[1]