Federal Order meeting.
February 24, 2017

USDA Public Meeting Clarifies Proposed California Federal Order Provisions

 |  By: Jim Dickrell

A four-hour public meeting was held in Clovis, Calif. this week to clarify provisions of the recommended decision on creating a Federal Milk Marketing Order encompassing the state of California.

The meeting was held to answer “what and how” questions, not “why” questions, says Dana Coale, Deputy Administrator of USDA’s Agricultural Marketing Service’s Dairy Program. “This will impact the California dairy industry and we want to make sure you understand it,” she says.

For the most part, the public meeting went over specifics of the 213-page recommended decision published in the Federal register Feb. 14. How quota would be handled and how milk would be pooled and priced were the main focus of the meeting.

Because California’s Department of Food and Agriculture (CDFA) did not receive prior notice of the decision due to Federal rulemaking restrictions, the CDFA is now studying the proposal to determine how it would administer the state’s quota program. Quota accounts for about 20% of California’s milk supply. Under the recommended decision, the Federal Order would allow deductions from a dairy producer’s Federal Order price and not violate Federal Order minimum prices that must be paid.

Comments on the recommended decision are due May 15. One questioner asked if additional time for comments would be allowed if CDFA does not issue its findings for several months. Coale says USDA has already granted a 90-day comment period, 30 days longer than what is normally given. But processors or producers could ask for an extension but must give specific reasons for doing so. USDA would consider such a request.

Coale also clarified how voting is conducted under Federal Orders. A two-thirds majority of producers voting or a two-thirds majority of the milk volume represented by the producers voting would result in passage of the order. Under Federal Order rules, bloc voting by qualified cooperatives is allowed. The bloc vote represents all the members of the co-op, even if individual members of the co-op do not agree with the vote. Grade B producers are not allowed to vote since their milk does not qualify for Federal Orders.

Coale also said USDA is awaiting Federal guidance on President Trump’s executive order regarding new regulations. Note: Under that order, new regulations cannot be enacted unless two regulations are eliminated.

Assuming the Federal Order process can move forward, USDA will spend the summer evaluating comments submitted by the May 15 deadline. The hope is that a final decision will be issued in the fall of 2017. Then, a series of informational meetings will be held for producers and processors to ensure they understand the provisions of the final decision. Only then will a vote be held.  If the Federal Order for California is approved, Coale anticipates a three- to six-month transition period for the state to move from the California state order into a Federal Milk Marketing Order.

Listen to the public meeting here.