Statement from Secretary Ross on dairy pricing

Under state law, the California Department of Food and Agriculture has the responsibility of calculating the minimum price that milk producers are to receive from processors.  In order to perform this duty, the Department employs economists who monitor conditions in the dairy marketplace. When considering changes to the formulas used to calculate the minimum price, the Department is obligated to balance the economic impacts on producers, processors and consumers to ensure there is sufficient milk to meet demand, and that demand remains consistent. Because of the competing interests of these groups, the Department is often required to make difficult decisions.

The Department is acutely aware of the current challenges facing dairy farmers. Our economists have been following the national and international developments very closely. However, there are significant long-term problems that must be addressed. While the drought has resulted in a dramatic increase in feed costs, producer prices are also affected by a change in dairy consumption patterns and different marketing conditions in California versus the rest of the nation. Without reforms to the overall pricing structure to account for these changes, short-term price adjustments may not be an effective approach. Many in the dairy industry agree.  Over the course of more than a year, stakeholders across the California dairy industry have expressed their concerns about our current pricing system and how it may affect the future of our industry.

That is why the Department is assembling the Dairy Future Task Force. Dairy producers, processors and cooperatives are being asked to come together as a coalition to make recommendations for changes to the pricing structure, so that there is long-term stability in the industry and California may maintain its status as a world leader in dairy production well into the future.

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7 Responses to Statement from Secretary Ross on dairy pricing

  1. Making Corrections says:

    That last paragraph should read:

    That is why the Department is assembling the Dairy Future Task Force. Dairy producers, processors and cooperatives are being asked to come together in front of CDFA headquarters…

    • Donald VanderPoel says:

      Making Corections, this notion of coming together 1 and all is an absolute fallacy! What planet did you come from?

  2. Donald VanderPoel says:

    That is a fascinating response to a problem that has not been addressed in years, the last secretary kicked the can to you and now it seems you are attempting to kick it to your predocessor. History is repeating itself. You know a problem exists why don’t you fix it. We do not need this ridiculous committee that is set up to fail. The only problem with our pay price is the value you put on whey. Why dont you audit the large cheese processors books and see how much is made on it. Don’t make this problem bigger than it really is. Secretary Ross, we can do this easy or the hard way either way the destruction is from you ability to do your JOB or inability. I will not kiss your behind like others in this industry who think that is how beuracracy works. You know what the law reads and REFUSE to follow it. Please answer one question for me with no B.S., why do you think California dairymen deserve to be paid less for 4b milk than dairymen selling milk to cheese processors in every other state?

  3. Brian Luis says:

    Secretary Ross:

    I STRONGLY DISAGREE.

    I can see that you have resolved to let this situation be as is. So be it; I am sure you are going to regret what is about to happen in this industry and we will MAKE SURE that you are held accountable for your refusal to do anything meaningful to stop it. We will not forget.

  4. Stephen Brown says:

    Secretary Ross,

    I applaud your goal to seek lasting solutions for future milk pricing. I fear that continuing to ignore the current inequitable milk pricing problem CDFA is creating lasting supply degradation. If your “economist” believe we have too much milk capacity in this state, then continue to delay and talk of bold new pricing schemes. Please know that your future is coming at cost of small dairy families. As they go out of business their facilities are permanently retired. If this is progress, it is by regulation not business acumen. I know in your spring industry meetings you did not want to get bogged down by regulatory barriers to expanding or starting a new dairy. Please know that they are real and can only be borne by mega dairy families or milk processors who supply their own plant. You cannot save every dairy person, but you can tread lightly.

    Give us equitable value for whey in our milk now. Only by knowing that we can make it into the future can we talk about new milk pricing methods.

  5. Loren Lopes says:

    Dear Secretary Ross,
    When you state the Department is obligated to balance the economic impacts on producers,processors,and consumers to ensure there is sufficient milk to meet demand,and that demand remains consistent.

    You say the Department is acutely aware of the current challenges facing dairy farmers.

    Your economists must know without any doubt the producer is and has taken the most negative impacts of this crisis.

    The processors are protected through a make allowance deducted from the commodity values of milk producers are not protected.

    YOU say the Deparment is obligated to ensure there is sufficient milk to meet demand and the demand remains consistent.

    Your economist know what the cost of production is and they should know without a change in the pricing formulas that MILK can’t be produced on the long term for $4.00 to $5.00 below cost. Demand can’t remain cosistent without supply.

    Your own criteria tells you to RAISE the PRICE of MILK to the dairy producer to keep in balance with the processor and consumer.

    When you mention there are significant long-term problems that must be addressed. Do you mean that the processors have made long term comittments for the dairy producers milk below the cost of production? This needs to be clearer. If this is the case and it is revealed than the Department really failed by not intervening to correct this from happening again.

  6. Katherine says:

    Secretary Ross,

    I don’t believe you understand how difficult it is for PRODUCERS right now. Yes,a long term solution needs to be found but something needs to be done in the mean time. I would like to suggest you go out to the dairy farms in this state and speak to the farmers themselves, rather than listen to your economists on how difficult it is right now. Feel free to stop by my family’s farm any time and we will share the challenges with you. California is the nations number one dairy state and major player in the global market. Don’t you want to keep it that way?

What do you think?