By Cathleen Galgiani
April 28, 2013 12:00 AM
California is esteemed for many things, but few are as iconic as our "Happy Cows." Few are as treasured as the "grown and produced in California" labels that proudly represent the family farms that helped shape our state's cultural and economic foundations.
Unfortunately, a tangle of antiquated price-setting methods is putting dairy farms small and large in peril. The rules governing the cost paid to farmers for milk allow cheese companies to pay dramatically less for milk in California than in other states and threaten the existence of hundreds of California's local, family-run dairies.
Nearly 400 dairy farms have closed in California in the past five years. Last year alone saw 105 family dairies shuttered. Meanwhile, California's remaining 1,500 dairies are fighting for survival, strapped with soaring feed costs and shackled by an unfair cost structure within the state's milk marketing order.
Assemblyman Richard Pan, D-Sacramento, has proposed legislation to allow the California Department of Food and Agriculture to stabilize the flawed dairy cost structure. Assembly Bill 31 would begin to stabilize the way regulators calculate the minimum price for milk that is produced in California and sold to cheese manufacturers, leveling the playing field for our dairy producers.
California is the only state that does not calculate whey, a residual protein from the manufacture of cheese, when regulating the price of milk. This leaves California milk producers at a serious disadvantage. Now is the time to begin to bring our system into the 21st century.
In March, producers paid $1.46 per gallon for milk used to make cheese in Washington, Oregon, Wisconsin, Minnesota, New York, Pennsylvania, Vermont, Texas, Arizona and other states. California farmers were paid $1.27 for the same milk - 19 cents less per gallon.
In California, many dairy farmers earn less for their milk than it costs them to produce it.
Nineteen cents may sound paltry. But this disadvantage - coupled with the doubling of feed prices in recent years - has forced farmers to shut their doors and lay off workers.
They are losing their businesses and their homes, and in many cases homes that have been in their families for generations. California's dairy production industry has suffered more than $2 billion in financial losses over the past five years.
Dairy farms are not the only segment of our economy affected by the milk price-setting methods we now employ. This inequity threatens those at all levels of our economy. Skilled workers are in danger of losing jobs, feed producers would suffer steep revenue losses, and local communities - particularly small rural towns - would suffer irreparably from losing the dairy farms that support the fabric of their economies.
Veterinarians who keep our dairy cows healthy stand to lose their main clients. Livestock feed companies, dairy design firms, dairy construction contractors and banks will lose huge chunks of their businesses. And in some cases, California's farm land will be irrevocably lost to residential or commercial construction.
If we do not remedy this imbalance, the impact on a California already battered by years of recession will be ominous. If we do not protect our homegrown dairy producers and make sure they can compete, California will be left with a small handful of corporate-run dairies.
The small communities that make up the heart of our San Joaquin Valley will suffer.
This legislation makes sense. It will level the playing field for dairy farmers, protect California's spot as the nation's top milk producer, and preserve our rich history of supporting family-run farms. Our "Happy Cows" depend on it.
Sen. Cathleen Galgiani, D-Stockton, is the chairwoman of the state Senate Agriculture Committee.