California milk jug cap.
June 5, 2017

California Producer Review Board Votes to Assess All Milk for Quota Payment

 |  By: Jim Dickrell

The California Producer Review Board (PRB) met last week on issues surrounding the state’s milk quota program and how it would operate along side a Federal Milk Marketing Order (FMMO). In one of its first actions, the PRB voted to assess all milk—Grade A and B and out-of-state milk processed in California.

A summary of the meeting was provided in the Milk Producers Council (MPC) newsletter published June 2. And an overview of the issues can be found here. Once all the issues are decided, a producer referendum on the new state rules is likely. The changes are required because a state quota system will operate outside of but along side the proposed Federal Order for California.

The group also voted to continue current practice of calculating quota payments to generate the quota value of 19.5¢/lb of solids-not-fat or $1.70/cwt. The PRB also voted to require handlers to provide data to CDFA necessary to operate the quota program, to establish a CDFA-administered settlement fund to disperse funds and to use existing authorities to recoup costs of administering the program.

The PRB votes are recommendations to California’s Secretary of Ag Karen Ross and are non-binding. Ross can accept, reject or amend the motions, according to Josh Eddy, a CDFA public affair specialist. "But the Secretary has made it pretty clear she intends to put huge weight on what producers want to do," says Geoff Vanden Heuvel, an MPC board member and economics consultant.

There are still a number of issues Ross will have to deal with, says Vanden Heuvel. For example, it might not be legal to assess Grade B milk since it is ineligible to participate in the quota program. Likewise, it also might not be legal to assess California milk that is processed outside of the state.

The comment period on the proposed California Federal Order ended May 15, with 32 comments submitted. A final decision on the California Order isn’t expected until this fall, which will then be followed by a producer vote later this year.