BILL ANALYSIS Ó
AB 629
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Date of Hearing: May 13, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
629 (Perea) - As Amended May 6, 2015
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|Policy |Agriculture |Vote:|9 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill requires the Secretary of the Department of Food and
Agriculture (DFA) to inform milk producers and handlers, on a
monthly basis, the minimum prices for the various components of
market milk, and permits the Secretary to do so via written
notice or publication online.
FISCAL EFFECT:
Negligible fiscal impact to DFA, potential minor administrative
cost savings if DFA were to cease providing written updates on
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market milk component pricing and only publish online.
COMMENTS:
1)Purpose. According to the author, dairymen frequently use
forward pricing and other hedging strategies to manage their
businesses, and this bill provides producers and processors
with important information on the component pricing of market
milk.
2)End of a Milk Era? California's milk industry may be
embarking on historic structural changes. Processors in
California currently pay on five different classes of milk,
compared with four for federal milk pools. For several years,
prices for the cheese class of milk in California have
consistently underperformed the federal cheese class, as
cheese falls into different classes at the state and federal
level, and is aggregated with higher value milk products in
the federal classification.
As a result, California's three milk cooperative petitioned
the US Department of Agriculture (USDA) to form a federal milk
pool, and the USDA accepted the petition and will begin
informational hearings next month. If the cooperatives are
successful in creating a federal pool, DFA's role in
establishing milk prices would be diminished or eliminated.
Analysis Prepared by:Joel Tashjian / APPR. / (916)
319-2081
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