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What’s Going on With Quota?

Updated: Feb 1, 2022

There is a lot of discussion going on right now among California producers about quota. It is an issue where producers have different views and a lot of money and history is involved. The Board of Milk Producers Council is discussing this as well. The Board membership reflects the broader producer community with some Board members owning a lot quota and some owning no quota and many somewhere in between. There are those who would prefer that no changes ever be made to the existing program, and there are those who think change is appropriate. If you are open to change, the question then becomes what kind of change and how fast. I am sure this conversation is going to continue for some time, but for today, what I want to offer up for your consideration are some reading materials.

Here are a number of documents that are worth looking at. First is a History of the California Milk Pooling Program last updated by CDFA in October of 2012. You can read it here. The second is a document written in 1972 that gives the comprehensive history of what led up to the development of the pooling/quota system. You can read that here. The third covers some of the same ground in a very thorough Legislative analysis done in 1975. You can read that here.

There is more history of important things that happened after these documents were written. There was "equalization" that took place in 1978 where a large amount of "blue sky" quota was issued to certain producers who were still short of quota nine years after the program started. Then there is the history of the $1.70 fixed differential that came into effect in 1994. I was very involved in that effort and at some point in the future I may write a history of what led up to that important change. But I am going to leave that for another day.

For right now, it is important to acknowledge that the milk pooling/pricing/quota systems that are currently in place are there because producers acted collectively to put them there. Changes have been made to these programs when enough pressure emerged to make changes, but it was never a quick process. We have just undergone a very major change in the adoption of a Federal Milk Marketing Order. Now there is agitation for further major change. This time the discussion is "in the family" and there are producers on all sides. The benefit of reading the history is to understand that our industry has faced these challenges before and has found solutions that most producers supported. It’s worth a little investment of time to get that perspective. Happy reading.

Geoff Vanden Heuvel

Director of Regulatory and Economic Affairs

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