California milk cap.
September 18, 2017

California Quota Proposal Finalized

 |  By: Jim Dickrell

California’s Producer Review Board (PRB) finalized its quota recommendations last week in its fourth and final meeting.  The proposal will now go to California’s Secretary of Agriculture, with a producer referendum expected next month.

A new dairy quota program is needed if California dairy farmers vote to join the Federal Milk Marketing Order system. Currently, the California state milk order regulates both milk pricing and the quota program jointly. A separate quota regulation is needed to allow California to continue its quota program along side a Federal Order.

The final PRB recommendation is very similar to the existing quota program.  The major difference is that, if approved, dairy farmers will see a direct deduction from their milk checks each month, which should range between 37¢ and 40¢/cwt. Under the current program, funding for the program comes out of the pool and farmers never actually see it reflected in their milk checks.

The new program would also conduct a producer survey every five years to gauge the effectiveness of the program. “While this is not the same as a mandatory referendum, it does bring the quota program under the microscope more frequently than it currently is,” says Annie AcMoody, director of economist analysis for Western United Dairymen. “When producers buy quota, they do so because they feel it is safe asset—not something up for review every five years.”

Under the rules of the referendum, 51% of California dairy farmers must vote. Then, it will pass if:

              65% of producer voting representing 51% of milk vote yes, or

              51% of producers representing 65% of milk vote yes.  

Read more here.