In a meeting on May 7, the Producer Review Board voted to recommend to CDFA Secretary Karen Ross a higher assessment for the California Quota program.
CDFA’s Donald Shippelhoute, the administrator of the Quota Implementation Program, reported that the fund balance was being depleted. The balance carried over from November 2018 when the Federal Milk Marketing Order was implemented. The QIP requires that all grade A producers be assessed the amount necessary to pay the costs of the program.
He said there have been problems collecting funds owed by some processors and one such effort is in litigation. He said there was the likelihood that the program would be operating at a deficit as early as August if the assessment remained at $0.325 per cwt of Grade A milk produced.
When the California FMMO went into effect, the assessment had been $0.38 / cwt, before being lowered to $0.325 on September 1 last year. The QIP requires that sufficient funds be collected to cover the costs of the program, both administratively within CDFA and for payments to quota holders.
One of the PRB members, Craig Gordon, early in the meeting proposed a resolution asking the Secretary to suspend both the collection of the assessment and payouts to quota holders in light of the low milk prices caused by the impact of the coronavirus. His motion was defeated by a vote of 12 – 2. Gordon is a leader of the so-called “Stop QIP” movement. He asked that his complaint be put in the record that the PRB is not representative of California producers because he claims too many members are quota holders. The attorney for the Stop QIP effort, Chip English, was also on the call and during time for public comment, he registered the opinion that the assessment is not legal and therefore the Board could make no recommendation. Stop QIP has brought a lawsuit against CDFA on this matter.
Fred Douma who conducted the meeting was reelected chairman while Arie de Jong was reelected vice chairman. The meeting was held via Zoom and teleconference with all members in attendance except Chuck Ahlem.