California milk jug bottle cap.
March 31, 2018

USDA Releases Final Rule on California Federal Order

 |  By: Jim Dickrell

The United States Department of Agriculture released its final rule on the proposed California Federal Milk Marketing Order (FMMO) on March 30th, and has already set dates for the dairy farmer referendum on its enactment.

The final rule is exactly the same as the proposed rule. Its release was held up for months, however, due to an unrelated Supreme Court case that involved whether the administrative law judge was legally eligible to preside over the 40-day hearing two years ago. Once USDA’s Judicial Officer William Jensen read and ratified the hearing record in early March, the agency was then free to issue the final ruling.

On April 10, USDA will conduct a public meeting in Clovis, Calif., to explain the final rule and answer questions from farmers and other interested partners.

“In essence,  a California FMMO will share all the common characteristics of the other 10 FMMOs in the United States,” says Geoff Vanden Heuvel, a California Milk Producers Council board member and economics consultant. “What that means is that our pricing formulas will be identical in form and fashion to the other FMMOs, but the pooling rules will be tailored to our region.”

Those pooling rules will likely be the center of the discussion at the USDA public hearing in Clovis, he says. Note: California producers have already approved the continuation of the state’s quota program, which will operate alongside the Federal Order if it is approved.

Western United Dairymen (WUD) has commissioned two outside experts to assess the impact of enacting a Federal Order in California. It will also hold three informational meetings in April to answer producer questions. Those meetings will be held April 16 in Petaluma, April 17 in Modesto and April 18 in Tulare.

The producer referendum on the California Order will run from April 2 through May 5. The order will become effective if approved by two-thirds of producers or approved by producers who market two thirds of the milk in California.

California cooperatives will be contacted in the coming days to determine if they will block vote for their members. Producers who are members of cooperatives which do not block vote or producers who are not members of cooperatives will receive ballots. Those ballots must be returned by May 5.

To read the final rule, click here.