And So It Begins: A Process For Addressing Quota Emerges

Updated: Feb 1

A press release came out this week announcing an organized effort by California producer interests to tackle the quota issue. The effort outlines a multi-phased process that includes three key parts: An idea gathering phase, a producer feedback phase, followed by an analysis phase, where economic impacts and legal pathways to adoption will be identified.


The group has hired Dr. Marin Bozic, a very qualified dairy industry economist, and Matt Gould, a dairy market analyst, to assist in the process of developing a path forward. You can read more about Dr. Bozic and Gould, as well as the proposed process to address the state’s quota program, in the full press release published on page six of today’s Friday Report. The first series of public producer meetings have been scheduled, and producers are encouraged to attend and participate.


Meeting space is limited, so all participants are strongly encouraged to register as soon as possible at www.dairyfamilies.org/events.


Commentary by Geoff Vanden Heuvel:

I have been an active participant in the policy and politics of the California dairy industry since the early 1980s. Many times over these decades,I have been asked by people both inside and outside of California about the future of quota. Folks would point to the growing number of producers with little or no quota and wonder how long the system could continue. My answer has always been the same. As long as overbase producers were simply complaining at the coffee shop about the system, nothing was going change. But if producers with little or no quota ever got organized and demonstrated that they had a plan – and a commitment to carry out that plan – then folks would know that the beginning of the process for fundamental change had started.


Like many, I was surprised how quickly after the implementation of the Federal Milk Marketing Order that an organized effort for change began. But the seeds for change have been in the ground for many years. Now it is here.


I have been impressed by the STOP QIP folks’ ability to get organized and be as effective as they have been. Getting producers to sign petitions is no small feat. And getting as many signed petitions as they did was impressive. But I have been equally impressed by the folks who saw the need to establish a new group specifically dedicated to finding an equitable and reasonable solution to this problem.


The United Dairy Families group has demonstrated amazing skill and competence in putting together a plan and process for how as a producer community we get to an answer that can be supported by a vast majority of California producers. Now that the cooperatives have stepped up to assist, I am very optimistic that a way forward can be found.


You might wonder where Milk Producers Council fits into all of this. Producer trade associations are volunteer organizations and we have members on all sides of the quota issue. We exist to serve all of our members, and to that end, I have been a resource for folks regardless of their particular perspective on this issue. I have shared what I have learned over the years and whatever perspectives I have to those who are interested in that perspective.


The quota issue was always going to be addressed at some point. The way this has played out so far is that it appears both sides are willing to explore meaningful options for change. Certainly, both sides have risks and something to lose. The outcome of a straight-out termination vote carries risks to the quota holders, but losing that vote carries risks and uncertainties for the non-quota holders as well.


Getting Dr. Bozic and Gould involved at the front end of the process is a good idea, but ultimately producers will have to empower their leaders to make a deal. The cooperatives and trade groups stand ready to assist and support the effort. But change is difficult and this issue is not only an economic one, but also an emotional one, so there will likely be bumps in the road. It will go too fast for some and too slow for others, but that tension is to be expected and is unavoidable when a family tackles an issue as big as this one. In the end, I have utmost confidence that we will end up in the right place.


In the meantime, the very first California Quota milk price was announced by the California Department of Food and Agriculture for milk produced in July of 1969, making this month the golden anniversary for the California quota system. Doing the math (3.5 pounds of butterfat and 8.7 pounds of solids nonfat per cwt. of milk), the Quota price in July of 1969 was $5.71 per cwt. and the overbase price was $4.16 per cwt.


In addition to California’s first ever quota price announcement 50 years ago this month, other notable events of July 1969 included: The Apollo 11 spaceflight, where Neil Armstrong would become the first person to ever walk on the moon; the withdrawal of the first 25,000 American troops from the Vietnam War; the release of Johnny Cash’s “A Boy Named Sue” recorded live at San Quentin State Prison; and Senator Edward Kennedy’s guilty plea of leaving the scene of an accident a week following a car accident on Chappaquiddick Island, which took the life of Mary Jo Kopechne.








Geoff Vanden Heuvel

Director of Regulatory and Economic Affairs

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