California milk cap.
June 25, 2019

California To Adjust Quota Assessment

 |  By: Jim Dickrell

Upon further review, California’s 38₵/cwt assessment to fund its quota program is generating about $1 million revenue more than is necessary. The over-payment was announced last week at a meeting of the state’s Quota Implementation Plan (QIP) committee.

“In addition, there was about $5.5 million of producer money left over in the Pooling Equalization Fund (from the California Department of Food and Agriculture) that was transferred to the QIP fund,” says  Geoff Vanden Heuvel, director of Regulatory and Economic Affairs for the California Milk Producer Fund.

Totaled together, the higher-than-needed assessment and the left over money means there is about $12 million in excess money in the QIP fund. QIP administrator Donald Shippelhoute says only about $2 million in reserves is necessary for the smooth functioning of the fund.

Starting with September milk, the new assessment rate will 32.5₵/cwt. That rate will continue for about a year to bring the QIP fund balance back down to $2 million. After that, the current payout would require an assessment of roughly 35₵/cwt to remain in balance.

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