California milk jug bottle cap.
May 28, 2019

Referendum On California Quota a No-Go

 |  By: Jim Dickrell

The California Department of Food and Agriculture (CDFA) determined last week that a referendum on the state’s 49-year-old dairy quota program will not happen, at least in the near future.

 

CDFA had set a threshold of 25% of California dairy producers requesting a referendum for it to move forward. While there are 1,197 dairy farms in the state, common ownership of more than 200 farms means just 992 producers are eligible for participation in the petition process, say CDFA officials.

 

Petitioners for a referendum submitted 283 signatures this spring. However, 40 of those were ruled invalid. Of the remaining 243, 46 had common ownership. That meant that just 197 were valid signatures, or 19.9% of eligible producer voters.

 

“Therefore, the petition will not be referred to the Producer Review Board,” states the CDFA notice.

 

This likely does not end the controversy, however. To make quota payments to those producers holding quota, CDFA deducts about 38¢/cwt (the exact amount is based on the amount of SNF a farmer sells each month). For a dairy milking 1,000 cows per month shipping 2 million pounds of milk, the quota deduction could amount to a $7,600/month payment, or more than $90,000 annually. Those holding quota then get a payment of $1.43 to $1.70/cwt, depending on where their dairy is located within the state.

 

“A process is needed that will enable the California producer community to evaluate its options for the future regards to quota,” says Geoff Vanden Heuvel, director of regulatory and economic affairs for the California Milk Producers Council.

 

State dairy co-ops and trade associations are reluctant to get involved because they have members on both sides of the debate. “It would be in the best interest of the industry if a process emerged that would facilitate a long-term resolution of this issue. Ultimately this is a producer issue and for many producers a very personal one,” Vanden Heuvel says.

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