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AB-31 Milk products: milk prices: dairy industry sustainability.(2013-2014)

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Amended  IN  Assembly  May 07, 2013

CALIFORNIA LEGISLATURE— 2013–2014 REGULAR SESSION

Assembly Bill
No. 31


Introduced by Assembly Member Pan

December 03, 2012


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


LEGISLATIVE COUNSEL'S DIGEST


AB 31, as amended, Pan. Stabilization and marketing plan for market milk. Milk products: milk prices: dairy industry sustainability.
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 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 make specified legislative findings and declarations regarding challenges faced by the dairy industry and would state specified intents of the Legislature.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YESNO   Local Program: NO  

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


SECTION 1.

 (a) The Legislature finds and declares both of the following:
(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.
(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.
(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.
(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.
(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.
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.