California milk jug bottle cap.
December 15, 2018

Tulare, Calif. Dairy Farmers Get 36¢ Bump From New Federal Order

 |  By: Jim Dickrell

California dairy farmers got their first glimpse of what the new Federal Milk Marketing Order will do for them this week. In Tulare in California’s Central Valley, it amounts to 36¢/cwt.


“A switch to the Federal Milk Marketing Order means producers are seeing 36¢ (in Tulare) to 86¢ (in Los Angeles) more for their November milk,” says Geoff Vanden Heuvel, director of regulatory and economic affairs for the California Milk Producers Council.


The announced Statistical Uniform Price for Tulare was $14.94/cwt and for Los Angeles, $15.44. The Producer Price Differential for California in November was $1.


Note that under Federal Order rules, processors only are required to pool Class I milk. Under the state order, all milk was required to be pooled.


In November 2018, 1.1 billion fewer pounds of milk was pooled under the Federal Order than was pooled under the state order in November 2017, about 35% less milk overall. A significant amount of Class IV milk was not pooled, says Vanden Heuvel, and Class IV made up only 8.9% of the pooled Federal Order milk. Last year, it made up 32.5% of pooled milk. “Keep in mind, this is just one month of data and processors have the option to pool or depool monthly,” says Vanden Heuvel.


To see USDA’s full price announcement for California, click here.