The U.S. Department of Agriculture’s hearing to consider proposals to establish a Federal Milk Marketing Order for California began on September 22 in Clovis, Calif. Bob Yonkers, IDFA vice president and chief economist, is attending the hearing and providing periodic updates for members.
Entering the hearing’s fifth calendar week, Monday was day 18 of the hearing to consider establishing a federal milk marketing order for California. Attendance at the hearing has dwindled from more than 50 people the first day to fewer than 30 most of the time. Many of those participants who have attended most days of the hearing estimate the hearing is about half way done.
Official hearing transcripts and exhibits are being posted on the U.S. Department of Agriculture/Agricultural Marketing Service’s website subject to an approximate two-week delay. In addition, the hearing may be heard on live audio feed; however this is not being recorded by USDA, as the only official record of the hearing is the official transcript mentioned above.
The hearing began with a total of seven USDA AMS staff members appearing as witnesses during the first few days to describe and be questioned about data and analyses they prepared for this hearing. During week four, one witness from the California Department of Food and Agriculture (CDFA) did the same for data prepared for this hearing.
Important Milestone
Today marked an important hearing milestone: the cooperative proponents of Proposal 1 (Dairy Farmers of America, Inc. (DFA), Land O’Lakes, Inc. (LOL) and California Dairies, Inc. (CDI)) completed their initial direct testimony as well as cross examination in support of that proposal. The major theme presented by proponents of Proposal 1 focused on the language from the 2014 Farm Bill, which gave rise to this hearing process:“Upon the petition and approval of California dairy producers in the manner provided in section 8c of the Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with amendments by the Agricultural Marketing Agreement Act of 1937, the Secretary shall designate the State of California as a separate Federal milk marketing order. The order covering California shall have the right to reblend and distribute order receipts to recognize quota value.”
In an opening statement on behalf of the proponents of Proposal 1, attorney Marvin Beshore indicated that their interpretation of the Farm Bill language does not require that USDA find that disorderly marketing conditions exist in order to establish a FMMO for California. Even so, witnesses testified that differences between regulated FMMO minimum farm milk prices and those under CDFA regulations demonstrate disorderly marketing.
In addition, Mr. Beshore and several other witnesses stated their interpretation also requires that USDA adopt Proposal 1’s provisions to insure that the current CDFA-managed California quota program continues to operate after the establishment of a Federal Order. Finally, Mr. Beshore noted that the provisions in Proposal 1 regarding minimum farm milk prices, pooling and transportation credits were also necessary to meet the intent of Congress.
Key Witnesses for Proposal 1
The key witnesses for Proposal 1 made the following appearances:
- Elvin Hollon (DFA) on differences between FMMO and CDFA farm milk prices and Proposal 1’s uniform FMMO provisions;
- Eric Erba (CDI) and consultant Lon Hatamiya on the California quota program and Proposal 1’s quota provisions;
- Consultant Paul Christ (retired LOL economist) on the history of FMMOs;
- Tom Wegner (LOL) on Proposal 1’s minimum price provisions;
- Elvin Hollon again on Proposal 1’s pooling provisions;
- Dennis Schad (LOL) on Proposal 1’s product classification provisions;
- Elvin Hollon again on Proposal 1’s provisions for producer-handlers; and
- Elvin Hollon again on Proposal 1’s provisions for partially regulated handlers.
In addition, representatives from other dairy producer groups have testified in support of Proposal 1, including witnesses for Western United Dairymen (Annie AcMoody), National Farmers Union (Chandler Goule), Milk Producers Council (Rob Vandenheuvel) and the California Dairy Campaign (Lynne McBride). Along the way, a number of dairy producers who are members of the cooperatives and/or producer organizations also have testified in support of Proposal 1.
With the conclusion of testimony by the key witnesses for Proposal 1, the hearing shifts to the proponents of Proposal 2 submitted by the Dairy Institute (DI) of California. In an opening statement presented back on September 25, attorney Charles (Chip) English noted that members of DI disagreed with the premise that disorderly marketing conditions exist in California and require the establishment of a Federal Order for the state. However, since USDA called a hearing, DI submitted a complete alternative proposal. While many provisions in Proposal 2 are the same or very similar to those found in Proposal 1, key differences exist in pooling and how quota is addressed as well as in the minimum farm milk prices proposed.
First Witness for Proposal 2
At the end of today, the first witness for the proponents of Proposal 2, Bill Schiek (DI staff economist), had taken the stand to begin his testimony. As outlined by English, this is the first of 30 to 40 witness appearances expected in support of Proposal 2, all of whom will be subject to cross examination following their direct testimony. Following that, the proponents of Proposal 3 and 4 expect to have several witnesses take the stand. Finally, any of the proponents of any proposal can have rebuttal witnesses testify before the hearing concludes.