Could California’s civil war over quota have a somewhat civil sunset?

The potential does exist. That’s because principles for the California Department of Food & Agriculture ruled that the United Dairy Families of California (UDFC) had achieved the necessary threshold required to conduct a review of their petition.

What was that threshold?

It required signatures from over 28% of market milk producers operating in California in May 2020.

The sunset plan
The petition, which took over a year to develop, calls for a five-year sunset to the Quota Implementation Plan (QIP). If ultimately approved, QIP would terminate on March 1, 2025.

During the ensuing five years, those holding the quota would receive $1.43 per hundredweight (cwt.). Under current rules, quota varies between $1.43 and $1.70 per cwt.

The proposal also would provide a cumulative payment of $300 per pound of quota, distributed over 60 months.

As for the next steps, the California Department of Food & Agriculture anticipates holding a Producer Review Board meeting in August to review the petition. That would be followed by a public hearing to consider the petition.

QIP’s birth
QIP was born in 1970. There were approximately 2.15 million pounds of pool solids in California, and it was given to the state’s roughly 2,700 Grade A producers. It was created as an incentive to help ensure that Class I beverage market demand would always be met.

Over the years, some farmers sold their quota, which had become an asset. Those farmers no longer receive a premium and still must pay into the Class I pool. In their minds, QIP is taking money straight out of their milk checks and giving that money to other dairy farmers.

Simply not happy
The Stop QIP group clearly wasn’t pleased with the administrative law judge’s decision as outlined in "California dairy petition ruled ‘defective.’” In fact, the group disagreed so much so that Stop QIP filed a motion to reconsider that decision on August 5. Whether that petition gets a serious look remains to be seen.

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(c) Hoard's Dairyman Intel 2020
August 6, 2020
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