Ag Today Monday, June 6, 2016

Ag Today

Monday, June 6, 2016


Fresno Bee

On a hot Fresno night, Hillary Clinton torches Trump

By John Ellis

Democratic presidential candidate Hillary Clinton, who is locked in a heated battle with insurgent Vermont Sen. Bernie Sanders for California delegates, hit Fresno on Saturday evening in a closing campaign blitz ahead of the state’s Tuesday primary.

Speaking in Edison High School’s gymnasium, Clinton drew a crowd of 1,500, which filled the space. Donald Trump, the presumptive Republican nominee, drew 7,000 to Selland Arena in his Fresno visit on May 27. Sanders drew more than 5,000 to his May 29 rally at Fresno Fairground and also had a big crowd earlier the same day for a stop in Visalia.

“I am so happy to be here again with all of you in Fresno,” Clinton told the crowd. “I want to say my husband and I can’t get enough of Fresno.”

Former President Bill Clinton spoke May 23 at Fresno State during a California campaign swing for his wife.

And Clinton did sprinkle some local references into her speech.

On water: “If I am fortunate enough to be your president, we are going to work on water and we are going to get this fixed.”

On immigration: “I will defend and I will work for the rights of all people who have an immigrant past to have an American citizenship future. I will work for comprehensive immigration reform from the very first days that I am in the White House.”

On farmers and farmworkers: “I will make sure that right here in Fresno and the surrounding area, where we see such productive agriculture, where the farmers and the farmworkers produce half of the food that we eat, that 1.2 million farmworkers in California will not be rounded up and deported.”

Clinton’s main target, however, was presumptive Republican nominee Donald Trump, whom she went after early and often in her 23-minute speech.

“We are having an election that is going to determine whether we move forward with confidence and optimism, solving our problems,” Clinton said. “Uniting in the face of whatever challenges confront us. Or whether we become fearful and turn on each other, and disrespect one another. When I pulled up here in the (Edison High) parking lot, I saw this slogan, ‘One tiger, many stripes.’ ”

As she began doing this past week, Clinton stressed that Trump does not have the right temperament to be president, using comments he has made criticizing American allies, his seemingly positive comments on North Korean leader Kim Jong Un and Russian President Vladimir Putin, and advocating killing family members of terrorists.

There is a three-part test a person must pass to show they have the qualifications to be president. She called it “a big job interview.”

It starts with committing to the “three most fundamental pillars” of building families and providing opportunity – jobs, education and health care. Next comes the question of whether one can be commander-in-chief. Finally, can the person bring people together? Can they unite?

The prospect of a Trump presidency, Clinton said, represents “one of the biggest threats to our liberty.”

While Clinton continually went after Trump, she never once mentioned Sanders.

Without a doubt, however, he was on her mind, because the underlying theme of the entire evening was voting in Tuesday’s California primary.

Besides calling on people to cast their ballots, Clinton also touted her endorsement by Gov. Jerry Brown, which came even as he and the Clintons have long had a rocky relationship. It was Brown who stayed around the longest in the 1992 primary election against Bill Clinton, who claimed the Democratic presidential nomination in California.

Hillary Clinton remains the clear Democratic frontrunner, only 59 delegates short of the 2,382 needed to win the nomination after posting a win Saturday in the Virgin Islands caucuses.

In fact, Fresno State political science professor Jeff Cummins says she has “unofficially captured the nomination,” even before Tuesday. Sanders is still the long shot, but as Bill Clinton said in his own recent Fresno visit, his wife needs to go into the party’s national convention this summer in Philadelphia “with the wind at her back.”

Instead, she may head to the City of Brotherly Love a bloodied candidate.

A loss in California will make that even more likely, and could increase the possibility of the entire Democratic Party limping into its national convention bitter and divided.

Sanders, for his part, shows no signs of giving up, vowing to take his bid for the nomination to the convention. He pledged Saturday to make it a “contested convention.”

At stake Tuesday in California are 546 Democratic Party delegates – 475 pledged, the rest superdelegates. Of the 475 pledged delegates, two-thirds are awarded proportionally by congressional district, and the number of delegates up for grabs per district varies from four to nine. The remaining 158 go to the statewide primary election winner.

Clinton could claim the title of presumptive Democratic presidential nominee in California or any of the five other states that also have their primaries Tuesday – Montana, New Jersey, North Dakota, South Dakota and New Mexico. There are 694 pledged delegates on the line Tuesday, and an additional 112 superdelegates in the six states that essentially close out the primary election season. After the six states Tuesday, only the June 14 Washington, D.C., primary remains.

Realistically, Clinton could get very close Sunday, or possibly even claim the nomination, when Puerto Rico holds its primary. In total, the island has 60 delegates and seven superdelegates up for grabs.

Still, there is the question of momentum.

A few months ago, Democratic Party leaders thought California and its treasure trove of delegates would be Clinton’s coronation, not a pitched battle. Instead, polls show the party’s two contenders dead even.

With that in mind, Clinton came to Edison High’s gym not so much on a quest to win the nomination, but to regain the wind at her back. Her 23-minute stay on the dais was preceded by introductions from Fresno Rep. Jim Costa and comments from retired Fresno County Superior Court Judge Armando Rodriguez.

Fresno was the final stop on a day of campaigning that took her first to Sylmar for an immigration discussion, then to a campaign rally in Oxnard and finally to Santa Barbara for a “conversation on women and families.”

On Sunday, Clinton will talk with community leaders in Vallejo before holding a campaign rally later in the day in Sacramento.

The Clinton campaign said her speeches would tell people why she is the best candidate in four key areas – raising incomes for Californians, lowering health care costs, improving education and breaking barriers that hold many Americans back.

In her Fresno speech, Clinton sounded many themes common to Democratic candidates: equal pay for women, early childhood education, clean energy, abortion rights, support of education and marriage equality. She talked about not only growing the economy, but making it fair. She will work to “improve the Affordable Care Act,” also known as Obamacare.

“I have no doubt that America’s best years are ahead of us,” she said.

John Ellis: 559-441-6320, @johnellis24,



Washington Post

Why Bernie Sanders is all about Cesar Chavez these days

By Janell Ross

All politicians do it. Over the course of navigating the United States’s uniquely long presidential campaign cycle, they settle on some themes and lines that they repeat at one campaign stop after another. Those that generate laughter, applause or other forms of group praise are most likely to be repeated.

So there’s really nothing unusual about Bernie Sanders’s repeated mentions of Cesar Chavez, the late California-based agricultural workers rights activist and civil rights leader. There’s nothing unusual about the fact that Sanders held a rally in Cesar Chavez Park in San Jose on Friday. And given the way that lots of candidates compete for minority votes, there’s not even anything all that unusual about this: Chavez’s son and son-in-law have publicly disagreed about which of the two remaining Democratic candidates Chavez would have supported.

But what is notable here is that Sanders so regularly invokes the name of Chavez. And the crowds that Sanders is attracting in California are, it seems, into it. When Sanders says Chavez’s name, the cheers are big, as The Fix’s Callum Borchers observed at his California rallies last weekend.

During his swing through California, Sanders has spent some time gathering information about the conditions under which a lot of agricultural workers labor and visited a historic site where Chavez once did some of his organizing work. Sanders has also said some things about pesticide exposure, clean drinking water and low pay in the agricultural industry that those who agree or cope with these conditions firsthand like to hear.

But not everyone is impressed. The L.A. Times described Sanders’s tour of California’s agriculture-dominated Central Valley as “heavy with imagery of the past” and light on specifics about what he might do to elevate wages or address industrial pollution in an area of the country where agriculture provides a large volume of jobs and serves as a major economic engine.

Others are giving Sanders the benefit of the doubt.

“I’d say this is pragmatic and smart, rather than anything approaching pandering,” said Efrén Pérez, a Vanderbilt University political scientist, California native and expert in Latino political behavior.

Sanders is turning to a kind of respectful symbolism, Perez said, in an attempt to cover a whole slate of policy positions that may not be as attractive to California Democrats, many of whom are Latino.

“It’s a very basic sort of psychology,” Perez said. “I think he sees the handwriting on the wall in terms of what the California electorate looks like; it’s not only Latino — heavily Latino — but largely Mexican American. Chavez is like Martin Luther King — an icon — so he is trafficking in symbolism that has meaning. He is  trying to say, by referring  to Cesar Chavez, ‘I understand and respect voters like you. I understand your history, and can you take a second look at me?'”

Chavez, born to a farming family in Arizona in the late 1920s, saw his family’s fortunes fall dramatically during the Great Depression. After losing its farm, the family joined many others migrating from state to state following crop development cycles and doing the hard labor of removing fruits and vegetables from plant stalks. Chavez left school in eighth grade because his family needed the wages Chavez could earn with full-time work. He later joined the U.S. Navy, became an organizer for a civil rights group and then, while only in his mid-30s, founded the National Farm Workers Association. That union later merged with the Agricultural Workers Organizing Committee and subsequently became a part of the United Farm Workers.

Chavez leaned on some of the tactics employed by civil rights activists, including marches, boycotts and nonviolent resistance, and often drew connections between the movements. Chavez even managed to persuade some middle- and upper-class Americans who had never picked a fruit or vegetable in their lives to stop buying certain products in protest. He also voiced opposition to foreign guest-worker programs and reported illegal workers to federal immigration authorities.

That combination, Chavez believed, bolstered the ability of legal workers to demand better work conditions. And he was involved in successful efforts to boost agricultural worker wages and demand safer and more sanitary working and living conditions. Chavez died in 1993 and was posthumously awarded the Presidential Medal of Freedom the following year.

And, for Sanders, maybe it’s just that simple.

Chavez is a giant figure in the labor movement and well known to lots of people in California. While only exit polls and voting returns after the Tuesday primary will reveal how racially and ethnically diverse Sanders’s support is in California, the state’s population — the people likely to show up at those California rallies — is fundamentally different than that of other states where Sanders has done well. More than 60 percent of the state population and a significant share of the state’s electorate are Latino, Asian, black or Native American.

However, despite Sanders’s many mentions of Chavez, the United Farm Workers of America has officially endorsed Hillary Clinton. And the board’s explanation seems to include some references to those consistency and racial-justice matters that have dogged Sanders throughout the primary season.

…Hillary Clinton has consistently stood with farm workers and immigrants, fought on behalf of and voted for comprehensive immigration reform, repeatedly sponsored the UFW-negotiated AgJobs legislation as a senator, supported farm workers in their fights for union contracts and worked to end discrimination against them.

The consistent respect Hillary Clinton has shown farm workers over her career, her willingness to answer tough questions, her commitment and work to end prejudice and her determination in the pursuit of progressive change have earned our support.

Now, some agriculture workers and labor activists have objected publicly to the Clinton endorsement, insisting that Sanders’s focus on economic inequality is of greater import. But in February, the United Farm Workers president wrote in a piece published by the Huffington Post that the organization had some outstanding questions for Sanders that explain the union’s ultimate choice.

Sen. Sanders voted against the Kennedy-McCain bill and led the push for amendments that killed the measure because he opposed the conditions pushed by business interests for guest workers, he said during the Feb. 11 debate.

But Sen. Sanders’ opposition to abusive guest worker programs didn’t extend to a bill he cosponsored in 2011, to allow agricultural guest workers into his home state’s largest farm sector — Vermont’s dairy industry.

Sanders probably hasn’t offended anybody with his copious mentions of Chavez. But Clinton has had longtime and high-level Latino political operatives on her staff with years of expertise courting and winning Latino voters. Clinton has long-standing relationships with lots of Latino elected officials and policy positions that have earned her the support of a lot of Latino voters over the course of the past few months.

In addition to that, the Republican race has put matters of race and ethnicity, the basic ability to feel safe and equal, at the center of the 2016 campaign. So, Sanders’s economic-inequality-first message may have just had a harder time breaking through.

Sanders has tried different tactics before to expand his appeal among blacks and Latinos, with little to show for it. If he can do better with Latinos in California on Tuesday, Chavez might have had something to do with it.



Fresno Bee

Note to Donald Trump: Why the California drought is real

By Robert Rodriguez

When Republican presidential candidate Donald Trump was in Fresno on May 27, he declared to a crowd of several thousand people that California does not have a drought.

His comments raised more than a few eyebrows among those who have experienced the devastation that four dry years have done to the state’s grasslands, underground water supply and farm fields.

A recent report by CoBank, a national agricultural lender, put the drought into hard numbers. Last year, the drought caused California growers to fallow 540,000 acres. This year, between 300,000 and 350,000 acres will not be farmed because of a lack of water. Total losses to agriculture are estimated at $1 billion to $1.5 billion.

But Trump’s claims also ignited those who believe that water for agriculture has been shortchanged in favor of environmental policies to protect endangered fish species. They say the drought is more man-made than natural.

As the issue of how to manage California’s water supply continues to be debated, here is what scientists and water experts tell us about the drought.

Q: Are we in a drought?

A: Yes. Scientists with the U.S. Geological Survey report that California is in its fifth year of a severe drought, based on several years of below-average rainfall and snowpack.

Also, the National Drought Mitigation Center at the University of Nebraska shows that a majority of California remains in severe drought conditions, or worse. The national center puts together the often-cited U.S. Drought Monitor map. The map shows that the San Joaquin Valley is under extreme drought conditions, meaning there have been crop/pasture losses and widespread water shortages or restrictions.

Q: California has experienced dry years before – 1976-77, 1987-92 – but there was still water available for farmers. What makes this drought different?

A: Unlike previous droughts, the latest drought that began in 2012 is more widespread than the others. It also included the driest three years in the past 120 years. The year 2014 was also the hottest on record, making conditions even worse, said the Public Policy Institute of California.

Environmental restrictions in the Sacramento-San Joaquin River Delta, where West Side farmers receive their surface water, also have increased over the past three decades, said Doug Parker, director of the California Institute for Water Resources.

The need to protect endangered fish species in the Delta has, at times, restricted the movement of water through the environmentally sensitive area.

“And we still have not fixed the problem,” Parker said.

Q: Trump said during his recent stop in Fresno: “You have a water problem that is so insane, so ridiculous, where they are taking the water and shoving it out to sea.” Why is that happening?

A: Freshwater does flow out to the ocean through the Delta. And it’s for a good reason, said Shane Hunt, public affairs officer for the U.S. Bureau of Reclamation. Freshwater is necessary to control the level of salt coming in from the Pacific Ocean. The area is considered an estuary where fresh river water mixes with salty ocean water.

Freshwater also is important to maintain the ecosystem in the Delta. The area is home to hundreds of aquatic and terrestrial species.

Hunt said that without freshwater flowing out through the Delta, salinity levels would rise and the Delta water would not be usable for people to drink or to use on farms.

Hunt acknowledges that there still is much disagreement about how much freshwater is needed for environmental purposes vs. agriculture and cities.

“We are trying to find that balance,” Hunt said. “But people see it differently depending on which side they are on.”

Robert Rodriguez: 559-441-6327, @FresnoBeeBob,




Bakersfield Californian

Toes are getting sensitive as groundwater turf is set

By Lois Henry

If you don’t want to know how the sausage is made, turn the page.

Though the sausage I’ll be discussing today, groundwater management, is vitally important to the future of Kern County, the inner workings ain’t pretty.

First, a glossary:

  • SGMA, Sustainable Groundwater Management Act, passed in 2014.
  • GSA, Groundwater Sustainability Agency, agency created to manage groundwater.
  • GSP, Groundwater Sustainability Plan, plan each GSA must have to, you guessed it, manage groundwater (so that we stop overdrafting the aquifer).
  • KGA, Kern Groundwater Authority, joint powers authority made up of 19 agricultural water districts, Kern County and the City of Shafter.
  • June 30, 2017, deadline for creation of GSAs in each critically overdrafted groundwater basin.
  • Jan. 1, 2020, deadline for GSPs to be submitted to the state Department of Water Resources (DWR) for those critically overdrafted basins such as the San Joaquin Valley Kern County basin..
  • 2040, date all basins must be deemed sustainable, or in balance.

OK, ready?

Everything was chugging along fairly well and we even had three groups file GSA notices with the state in the past few months.

Those include the Buena Vista Water Storage District, the tiny Greenfield County Water District and a partnership made up of Bakersfield, the Kern Delta Water District and Improvement District 4, a division of the Kern County Water Agency. (Amazing as there was no love lost between those three entities prior to this partnership.)

Each GSA, so far, has been very careful that its boundaries don’t include any other entities that might want to be their own GSA.

Overlapping boundaries is a no-no under SGMA. The state won’t accept such GSAs and everyone has to go back to the drawing board.

Then — BLAMO — Kern County sent out a notice that it would hold a hearing June 7 to consider becoming a GSA for the entire groundwater basin in the valley portion of Kern.

Talk about overlap.

Reaction was swift and ballistic.

“It’s the nuclear option,” said Bakersfield City Attorney Ginny Gennaro.

“We’re still scratching our heads trying to understand what the county is doing,” said Mark Mulkay, general manager of Kern Delta.

“It’s funny, they say they’re doing this to avoid costly litigation when this will actually create costly litigation,” said Maurice Etchechury, general manager of Buena Vista.

“(SGMA) actually created positive new partnerships, now the county’s coming in and knocking down all the pins,” said Steve Teglia, assistant city manager.

So, what, exactly, is the county aiming at with this proposal?

To chat.

No ulterior motive, said Supervisor David Couch, who sits on the KGA and has been the supervisor most closely involved with SGMA.

“There’s been a lot of miscommunication,” he said. “It’s been getting better but we still need to have far more conversations to address specific nuances.

“I think this (proposal) shows how much the county is grappling with what its role should be under SGMA.”

In the staff letter outlining the proposal to be heard Tuesday, the county also raises concerns about whether the various GSAs could impinge on Kern’s authority over land use, well permitting and groundwater transfers.

The letter suggests it would be beneficial for GSAs to have the county as a member to coordinate those issues.

Others say the county is overreaching. It doesn’t need a seat on every GSA to work those things out and could more easily deal with those concerns through legal agreements.

Hence, the hearing on Tuesday will likely be long, observed Etchechury.

SGMA doesn’t provide a single template for how water basins should be managed, leaving it to locals to hash out.

In some basins, counties have filed to be the single GSA. Other counties are letting water districts take the lead and will handle any leftover lands that aren’t covered by those districts, explained Mark Nordberg, the GSA program manager for DWR.

“The key phrase is adaptive management,” he said of how SGMA is envisioned to work.

Even after a GSA is filed and accepted, things aren’t set in stone. There are plenty of avenues for continued input, he said.

That’s because SGMA requires agreement by all stakeholders.

Since we all need water to survive and grow, we’re all stakeholders.

So, if Kern County officials see something in a GSP (the actual water plan) that would shaft residents of an unincorporated community, say Buttonwillow or Lamont, they will have the opportunity to object and DWR won’t accept that plan until there’s agreement on all sides.

I don’t see how a water district could go rogue under SGMA.

Given the stakes, though, I understand the county’s unease.

Even so, we’re nowhere near the GSP stage yet.

We’re still struggling to create the agencies that will create the plans.

“Ultimately, this is just a sideshow,” said Eric Averett, director of the KGA, of the county’s GSA dustup. “The real issue is the GSP.

“The GSA determines who’s going to be in charge, but it doesn’t change what has to happen and that’s preparing a water budget. That’s when it gets real.”

No doubt.


Go here for all the SGMA info your heart desires:

Opinions expressed in this column are those of Lois Henry. Her column runs Wednesdays and Sundays. Comment at, call her at 395-7373 or email


Read archived columns by Lois Henry at

Lois Henry appears on “First Look with Scott Cox” every Wednesday on KERN 1180 AM and 96.1 FM from 9 to 10 a.m. The show is also broadcast live on You can get your 2 cents in by calling 842-KERN.



Salinas Californian

Lawmakers kill farm labor overtime bill

By David Castellon

After the California Assembly narrowly vote down a bill to grant overtime pay to farm workers, a United Farm Worker official said the union isn’t done with the issue.

“We knew this was going to be a tough battle, no matter what,” Armando Elenes, third vice president of the UFW, said after the Assembly vote Thursday.

Elenes said the agricultural industry has a history of fighting legislation that benefits farm laborers, including requirements to provide shade and access to clean water for field workers. A similar overtime bill was opposed by the industry and killed by state legislators in 2010, he noted.

The latest overtime legislation, Assembly Bill 2757, the “Phase-In Overtime for Agricultural Workers Act of 2016,” stems from agricultural workers being exempted from the 1938 federal Fair Labor Standards Act, which established the minimum wage, along with record-keeping rules, child labor standards and overtime pay eligibility for most industries.

For industries except farm labor, overtime pay starts after employees work eight hours any day within a 40-hour-standard work week.

That changed in California in 1976, when Jerry Brown — in his first round as governor — approved a modified standard that allowed farm worker overtime pay to begin after laborers work 10 hours a day in a 60-hour-standard week.

In the new legislation, sponsored by the UFW and authored by Assemblywoman Lorena Gonzalez, D-San Diego, the eight-hours of work in a 40-hour week standard would apply to farm workers as well.

When it came up for a vote on Thursday, the majority of the 73 Assembly members who cast votes on the bill actually supported it, with 38 aye and 35 nay votes.

Seven Assembly members abstained from casting votes.

But to pass, AB 2757 needed a majority of the full Assembly to approve it — at least 41 votes, regardless of the abstentions — so it failed.

Among those who votes no were Devon Mathis, R-Visalia, and Jim Patterson, R-Fresno, who represents Tulare County, the nation’s top-producing county for agricultural goods.

Mathis was among the members who spoke about the bill prior to the vote, telling his fellow legislators, “The problem with the bill … they’re trying to put ag work in the box of a 9-to-5 [job].”

In an interview on Friday, Mathis said that agricultural workers can have periods where they’re working 40-hour weeks, but frequently — because of weather, harvest periods and other issues out of their control — farmers need their employees to work well beyond eight-hour days.

“They’re getting paid for the job,” and for all the hours they work, he said, adding that “they get paid quite well. In our area, they get paid more than minimum wage.”

“We’re happy that the overtime rules are remaining as they were. We’re pleased to see the Assembly recognizes the ag sector is different from the other sectors in California,” added Norm Groot, executive director of the Monterey County Farm Bureau.

Monterey County is the fourth top-producing county of agricultural goods in the nation.

“The nature of our specialty crops indicates short harvest cycles, and we need to be in the fields and the groves when the crops are ready to go, and most workers depend on 10-hour work days and six-day work cycles,” Groot said.

And if the overtime bill had passed the Assembly and Senate and had been signed by the governor, the resultant added labor costs likely would have forced many farming operations to restrict overtime wherever possible or bring in additional workers.

Brian Little, director of employment policy for the California Farm Bureau Federation, which was among industry organizations that opposed AB 2757, agreed.

He noted that higher overtime costs combined with California already in the process of raising its minimum wage to $15 an hour probably would force some farmers to not pick some crops or do other tasks, as the added costs might become too prohibitive.

Officials with the state Farm Bureau also maintained that the added costs of additional overtime pay, combined with the higher minimum wage and various other costs to meet regulatory requirements in California, likely would drive some farming operations out of the state.

But the farm industry made similar arguments claims of financial calamities that would stem from changing their labor practices – including the shade and water requirements – and they continue to perform, Elenes said.

“They said it hasn’t been the right time,” he said “It hasn’t been the right time for 80 years, and, unfortunately, people continued to vote for discriminating against farm workers.”

Concessions were made in AB 2757 to address some industry concerns, including phasing in the additional overtime pay over four years rather than all at once, Elenes noted.

“Anybody who handles the food in the supply chain has the right to overtime,” he said.

Although Assemblyman Mark Stone was aware of the cost concerns among farming interests, he voted in support of the bill, as did Luis Alejo, D-Salinas.

Neither man could be reached for comment on Friday, but Stone’s legislative director, Arianna Smith, said her boss has a long history on supporting fair-wage legislation, and “he felt it was necessary to provide overtime for agricultural workers.”

“I believe the bill should have passed,” said Graciela Martinez, a former director of the American Friends Service Committee’s now defunct Proyecto Campesino, a former Tulare County-based program to provide advocacy and education for farm workers.

She noted that farm workers don’t make a lot an hour, and there often are periods of weeks or months between harvest cycles when there’s little or no work available for them.

As such 10- to 12-hour shifts, which are common during harvest and other “peak” periods in grown seasons are important for farm workers to make ends meet over the year, and a few extra dollars for overtime hours would further help them.

“If, after eight hours, my husband was bringing in two-and-a-half hours [pay at] time and a half, that would allow me to buy an extra chicken, eggs,” said Martinez, herself a former farm laborer. “It would allow us to buy a pair of shoes for our child when they need them. A few extra dollars can help. Some of these people are living really, really tight.”

But the fight over farm labor overtime probably isn’t over, as an aide for Gonzalez said Friday that she probably will look at introducing another bill in a future legislative session.

As for the UFW, Elenes said, “We’re going to consider our options and see what we can do to continue pushing forward.”



Stockton Record

New formula keeps milk prices bottled up

By Reed Fujii

California’s agriculture secretary has changed how the state sets minimum prices for milk paid to dairy farmers, aiming to “provide a needed increase in revenue to producers to promote a stable milk supply.”

But because current market prices for dairy products are so low, the new formula put into effect Wednesday provides no immediate boost for farmers, industry officials said.

Milk is a leading San Joaquin County farm commodity, with production in 2014 worth an estimated $541 million, second only to almonds at $579 million.

The California Department of Food and Agriculture sets minimum prices for milk paid to dairy farmers in the state. The federal government does the same for much of the rest of the country.

Established amid the Great Depression, the state’s milk pricing system is complex and highly technical, accounting for differences in quality, usage and market prices.

But it has failed to keep up with changing demands in how milk is processed and consumed, as well as the increasingly global nature of the market for dairy products.

Thus, Agricultural Secretary Karen Ross, in announcing her order, said “I still believe adjustments to the pricing formulas are inadequate to address long-term structural challenges facing the dairy industry.”

Bu given such adjustments are their only available tools, she made permanent a change in the price of milk used for cheese. More specifically, it changes the value of whey — the liquid containing lactose, proteins and minerals that is left over from cheese making.

Whey value has been sharply debated between dairy farmers and milk processors. It also prompted an ongoing drive by California producers to switch to the federal system, or milk marketing order, which from 2012 through 2014 had provided a much higher value for whey.

Since then, however, whey prices have crashed, and both federal and state pricing systems currently give it very little value.

Anja Raudabaugh, chief executive of Western United, said the price formula change may boost farmers’ income, but only once market prices recover.

“The secretary is really trying to respond to the changing condition with the best tools available to her,” she said. “But at this time it’s not going to affect dairy families.”

They could use some help. Numerous factors have combined to depress global prices for all types of dairy products.

Raudabaugh said European officials lifted quotas on their dairy farms, which boosted production and flooded that market. Russia has embargoed U.S. food imports since 2014. New Zealand is producing an excess of dairy, competing with U.S. products in Pacific Rim markets. And more milk is being produced in other U.S. states, as well.

“So you’re seeing market niches filled that California production would normally go in,” she said.

Annie Acmoody, Western United economist, said California minimum milk prices in first half of 2014 averaged $21.58 per 100 pounds. Milk is sold by weight, and the industry standard measure hundredweight, or 100 pounds, is about 11.6 gallons.

In the first half of 2015, the state milk price tumbled to an average $14.09 per hundredweight and for the first six months this year eased to an average $12.71.

The state calculates it costs farmers $18.08 to make a hundred pounds of milk late last year.

“You can see that’s a pretty good difference,” Acmoody said. “That’s why we’re losing a lot of dairies.”

State milk production had fallen in 2015 and is down even more this year.

Bill Schiek, an economist for the Dairy Institute of California, which represents milk processors, worries that some cheese producers could be put out of business once whey prices begin to recover.

“The formula kind of assumes they’re getting revenue from whey,” he said.

The problem with that, Schiek said, is that many processors “don’t have the ability to do anything with the whey they produce.”

Smaller cheese-making operations, in particular, can’t support the expensive whey drying equipment needed to realize full value from the dairy byproduct.

Said Schiek: “The challenge I think we’re going to have going forward is how do we generate the kind of value out of the products we make to support the dairy industry.”

— Contact reporter Reed Fujii at (209) 546-8253 or Follow him on Twitter @ReedBiznews.