The USDA yesterday announced a public hearing will be held on September 22 to consider the proposed establishment of a FMMO in California.
Implementation of FMMOs, which are already in place in 10 regions across the US, is overseen by the USDA Agricultural Marketing Service (AMS).
They are designed to provide "orderly marketing conditions" by establishing rules dairy processors must adhere to when purchasing milk from farmers.
The USDA hearing, expected to last several weeks, will consider four proposals for a FMMO in California.
In February 2015, Dairy Farmers of America (DFA), California Dairies Inc (DCI) and Land O’Lakes – California’s three largest dairy cooperatives – petitioned the USDA to introduce a FMMO in the Golden State.
In a joint statement issued at the time, DFA, DCI and Land O'Lakes said implementing a FMMO in California would reduce the price “disparity” between Class III and Californian Class 4b milk, which are used to manufacture cheese and whey products.
The USDA later received additional proposals from the Dairy Institute of California, the California Producer Handlers Association and Ponderosa Dairy.
"Lower than the rest of the country"
California dairy farmers, who produce around 20% of America's milk, currently operate under a state milk pricing system.
Under this pricing plan, Californian milk prices have been "consistently lower than the rest of the country" for the last five years," DFA told DairyReporter.com in February.
But if a FMMO is implemented in California, Class 4b milk prices could "rise to a level equal to that of most of the United States," it said.
"Bringing California dairy producers into the same pricing system as the rest of the country's dairy farmers will put the manufacturers and dairy producers on the same market-based price formulas," DFA said.