Per today’s Federal Register, the USDA recommends establishment of a California Federal Milk Marketing Order (FMMO).  FMMOs regulate the purchase of milk between dairy farmers and the first buyer.

The California dairy industry petitioned USDA to join the federal milk marketing order (FMMO) back in 2015. Two months of hearings followed, including testimony for and against plans by California’s three producer cooperatives and other dairy groups. According to Western Farm Press, the central issue spurring dairy industry petitions was “the California Discount,” or the price state cheese makers pay for milk compared to what processors pay for the same milk under federal orders. USDA officials considered the economic impact the recommended California FMMO could have on the milk supply, product demand, product prices, and milk allocation within California and throughout the country.

Per today’s USDA press release, the recommended California FMMO would adopt uniform order provisions contained in 10 other FMMOs.  These uniform provisions include “dairy product classification, end-product price formulas and the producer-handler definition.” The proposed order would also recognize the unique market structure of the California dairy industry through “tailored performance-based standards to determine eligibility for pool participation.”  Additionally, as proposed, the order provides for the recognition of producer quota as administered by the California Department of Food and Agriculture (CDFA).

USDA will hold a public meeting on Wednesday, Feb. 22, 2017, in Clovis, Calif., to answer questions relating to how the proposed California FMMO would operate and how the public can submit comments for USDA consideration.

More information and USDA analysis is available here.