Amended in Assembly May 7, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 31

Introduced by Assembly Member Pan

December 3, 2012

An act begin delete to add Section 62076.1 to the Food and Agricultural Code, end delete relating to milk products.

LEGISLATIVE COUNSEL’S DIGEST

AB 31, as amended, Pan. begin delete Stabilization and marketing plan for market milk. end delete begin insert Milk products: milk prices: dairy industry sustainability. end insert

Existing law empowers the Secretary of Food and Agriculture to formulate stabilization and marketing plans that establish the prices to be paid by milk handlers for specified classes of market milk. Existing law requires the secretary to take relevant economic factors into consideration in establishing the price to be paid for class 4b market milk, which comprises all market milk, market skim milk, or market cream used in the manufacture of cheese other than cottage cheese.

This bill would begin delete provide a specific formula that the secretary would be required to use to establish the price for class 4b market milk that includes a dry whey value factor that is no less than 80 percent of the dry whey value used in federal milk marketing orders in establishing minimum producer prices. The bill would authorize each handler’s milk plant that purchases class 4b market milk to deduct a dry whey credit, as specified end delete begin insert make specified legislative findings and declarations regarding challenges faced by the dairy industry and would state specified intents of the Legislature end insert .

Vote: majority. Appropriation: no. Fiscal committee:  begin delete yes end delete begin insert no end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert (a) end insert begin insert   end insert begin insert The Legislature finds and declares both of
the following: end insert

begin insert

(1) The California Dairy industry has been confronted with
numerous challenges in the past several years that have forced
the dairy producers to exit the industry and processors to face
heightened competition.

end insert begin insert

(2) The challenges include dramatic increase in the cost of corn
and other produce used to feed livestock, increasing environmental
and regulatory costs, and decreasing water availability.

end insert begin insert

(b) It is the intent of the Legislature to provide the Department
of Food and Agriculture with temporary authority to consider an
emergency milk price adjustment.

end insert begin insert

(c) It is the intent of the Legislature that the Secretary of Food
and Agriculture actively engage the Dairy Future Task Force to
assist in developing proposals intended to best position both dairy
producers and processors to achieve the goals of long-term success
and sustainability.

end insert begin insert

(d) Further, it is the intent of the Legislature to address
establishing a dry whey value factor in the computation of the
value of class 4b market milk and a dry whey credit for processors.

end insert

begin delete

SECTION 1.  

Section 62076.1 is added to the Food and
Agricultural Code, to read:

62076.1.  

(a) In establishing prices to be paid by handlers to
producers for class 4b market milk, the calculation shall include
a dry whey value factor, computed as the cheese hundredweight
price, as established under the applicable stabilization and
marketing plan, computed by using the dry whey price defined in
the plan, less a manufacturing cost allowance of nineteen and
ninety-one hundredths cents ($0.1991), multiplied by a factor of
4.69, provided that the dry whey value factor shall be no less than
80 percent of the dry whey value used in federal milk marketing
orders to establish minimum producer prices.

(b) Each handler’s plant in California that purchases milk for
class 4b utilization may deduct a dry whey credit for quantities of
solids-not-fat processed for up to 264,480 pounds solids-not-fat
produced per month. The dry whey credit shall be equal to the dry
whey factor established under the applicable stabilization and
marketing plan, divided by 8.7.

end delete