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Things are changing in California, where around one-fifth of the milk in the U.S. is produced. Starting Nov. 1, the state’s independent milk marketing order will cease, giving over to the country’s newest Federal Milk Marketing Order. In the second part of this month’s two-part conversation, Ted, T3, Anna and industry expert Mike McCully discuss the changes and predict whether the implementation of a Federal Order in California will have the affect dairy farmers have been hoping for.

Anna: Welcome to The Milk Check, a podcast from T.C. Jacoby & Company, where we share market insights and analysis with dairy farmers in mind. Welcome back to Part 2 of our October 1 discussion with Mike McCully. In Part I, we discussed the new trade agreement between the U.S., Canada and Mexico. Today, in this Part 2, we discuss the new California Milk Marketing Order.

Ted: Mike, Anna printed off a copy of the order here last week, and I took a quick look at it. And you know, in my layman’s view, I don’t see a hell of a lot of difference between the California order and the other orders. We use Richie McKenna here as a consultant on Federal Order issues, and I asked Richie to see if anything jumped out on the pooling provisions and unit pooling and so on. Nothing jumped out to me. You know, we’ve always worked very closely with the MAs, and we’ve had a nice relationship with the MAs representing smaller and independent factors in the order. We know that the big boys get, sometimes, a little overly aggressive and manage to aggravate the federal order officials. So our relationship has been quite good in that area.

So a couple of things I think will determine whether how the Federal Order in California plays out. The first thing is who are the handlers, and how is it structured for pooling purposes? You know, there’s still enough handlers in the Midwest, for example, to be able to cobble together a unit to keep little guys pooled. Even though the big boys sometimes work diligently to try to thwart that effort, we still do it. Do it in California, I don’t really have a good sense of who the Class I handlers are, who the pool distributing plants would be in order to know whether or not there might be the ability to handle unit pooling for people of an independent nature there, of a non-cooperative nature or a proprietary nature is the better way to say it.

What’s your view of how that looks from that perspective? If you’re an independent manufacturer of cheese, for example, and you want to maintain your own milk supply, you know, and of course, minimum price under the order provisions do apply. How is that gonna work out?

Mike: I think there’s…first, the order language is very similar to other orders. And the reason is…MAs have actually told me that a lot of that…not all of it was basically copied over from other orders. The language is very, very similar on those things. And to my knowledge also, I’ve been through it a number of times with the MAs in seminars and so forth, I don’t really think there’s anything that would jump out that would be different. Really, the main issue is what you’ve already brought up is around pooling. And when I went through the Federal Order hearing process, the co-ops and the farmers pushed for mandatory pooling like it is today in the CDFA system and it has been forever, really, in the CDFA system. However, as you know, the market in California is very different than other orders in the U.S. that would have mandatory pooling. And it looks a lot more like the upper Midwest where you’ve got a high percentage of milk that goes into manufacturing. Eighty-plus percent of the milk in California is Class III or Class IV under Federal Order.

So in that case, you’ll see the high manufacturing of milk utilization. You’re gonna have more liberal pooling to be pooling tools, which is what they’ve adopted. And the farmers and the cooperatives do not necessarily like that; that wasn’t their option, that wasn’t their choice, but what that’s what they came up with. So now…

Ted: The order reads…excuse me, Mike, but the order reads 90% in Class I. Or pardon me, 10% in Class I, 90% diversions. So that is very liberal.

Mike: Yeah. It’s only a 10% requirement.

Ted: Yeah.

Mike: So that’s a pretty low bar. We should probably have a call a year from now because it’s probably gonna be that long before we really see how this is actually gonna work out. As you probably know, the USDA has…they’ve done several things…made several, basically, allowances to get this up and going without, you know, trying to minimize the disruption to the marketplace. First of all, on November 1, every dairy farmer in this state will be qualified. So they won’t have to go through touch base provisions or anything, so they don’t have to qualify. Every dairy farmer that’s shifted into a Class I plant in the last year, in the last 12 months. So you don’t have to worry about that.

Secondly, they have established a system through July 31st of 2019. So if you are that independent plant that has shippers or direct-shipped milk, and if you want to pool, you can actually join this system…or be part of the system, and you can be pooled through this system through the middle part of next year.

Now, the key…one of the caveats that is, you’re either all-in or you’re all-out. They’re not gonna allow partial pooling through this system. So it’s either 100% or 0%. So people will have to decide fairly early on if that’s what they want to do.

After July 2019, there will either be a base system put in place by some parties out there. I know that the cooperatives, they have looked at systems. They have also looked a federation to be able to put…instead of create a system, they can just create a federation, and, you know, settle the co-ops. And you can also, if you have…you know, if you have that independent plant and you want to, you know, pay the co-ops a little to handle, or, you know, pool that milk if it’s non-member milk, that would be an option for, you know, discussions with some of these other independent plants out there that could find some of those Class I plants to create a system to ship into.

There are four producer handlers in the state that are gonna see some pretty significant changes to their business. So those are ones that, you know, probably, I know, are getting talked to and getting phone calls from some of these independents if they can ship milk into them. There’s a fair bit of stuff going on right now and some discussions on our rank right now, but I think that those discussions are gonna continue on out into 2019 as, you know, the system and the federation and some of these things come into place.

Ted: Who are the Class I handlers in California? You’ve got Safeway, Altadena…

Mike: Safeway, Dean’s, Kroger…yeah, Safeway, Albertsons, Kroger…gonna be a couple of your integrated ones. HP Hood has some milk there. The producer handlers…producers’ dairies’ is pretty good size. Foster Farms, Rocky Farms, and Hollandia down in Southern California. Those are gonna be the major ones.

Ted: Well, it’s hard to visualize the independents, Kroger, Safeway, Dean. They would probably contract with CDI or whoever. Basically, CDI pretty much calls the shots. You’ve got Land O’Lakes, you’ve got DFA.

Mike: It’s really…CDI…to my knowledge, CDI and DFA are the ones with the majority in the Class I milk sales…or sales in the Class I plant. What I heard is Land O’Lakes has minimal, if any…or maybe no, at this point, Class I markets. So it’s really the two major co-ops are the ones that have most of the sales in the Class I plants. But then there’s, like I said, there’s also the…those independent producer handlers that are gonna be…reform or gonna become regulated. And maybe they also buy milk from the outside, whether it’s independent milk or co-op milk.

Ted: Is the producer handler limited to three million pounds a month still?

Mike: That’s the threshold, same as every other order. So there are small producer-handlers that won’t come into regulation, but those four bigger ones are all gonna become fully regulated.

Ted: So they were bigger than three million?

Mike: Yes, they’re all over. Yep, they’re all over three million.

Ted: Yeah.

Mike: The producers, Foster’s, Rockview, and Hollandia.

Ted: Yeah.

T3: What about the transportation credits? How is that gonna play out?

Mike: That’s a big deal for Southern California. So what effectively has happened in the past is that the co-ops who would market the milk in Southern California would take the local milk…most of the local milk would go into the cheese plants and maybe some into the fluid plants. But since they were able to get the transportation credit…a fair bit of that Class I milk would come down from Kern County or maybe even Tulare County. And then, you know, they would offset the transportation costs of the transportation credit that came out of the pool. As of November 1, transportation credit goes away. So all of a sudden, there is a real cost, obviously, of hauling milk down. You’re looking at $1.00, $1.20 a hundredweight to haul milk from, you know, southern Kern County all the way up to Tulare to get it down into L.A. to those plants. So what has gone back to those plants…actually, all plants in Southern California are now getting hit with a transporation charge. All of a sudden, the cheese plants are getting a hit from a couple different directions. They’re gonna have…their regulated milk price is gonna go up. So they go from a 4B to a Class III. Then they also get a new transportation charge which they hadn’t had before.

So basically, the elimination of transportation credit to the Southern California plants…the pain of that is now being shared across all plants.

T3: When you say “shared across all plants,” what do you mean?

Mike: What’s getting charged back now in the contract negotiations is the…the elimination of transportation credit, since there is a cost of hauling milk down, the co-ops are gonna pass some of that increased cost on to the plants. So each of the plants in Southern California are now getting a new…which they hadn’t seen before, they’re now getting a new transportation charge on their milk.

T3: I see. So that milk is gonna be more expensive going into those plants in Southern California?

Mike: Yes, yep. And for the Class I plants, they’re able to pass a fair bit, if not most of that, along. Whereas the cheese plants can’t. So that’s gonna be a real challenge for the cheese plants in Southern California to deal with both the higher regulated milk price, as well as the higher…with the additional transportation cost. So in the next…a couple of them, you know, may not take very long, but over the next year or two, there will likely be plants that’ll either idle back production or potentially close.

Ted: What is the expected difference between the old 4B and the Class III?

Mike: Depending on what time periods you look at, it can be pretty significant. If you look at the last three years…this is from the middle of 2013 to the middle of 2018, so a five-year average. So the increase on Class III would be 83 cents a hundredweight. And then on Class 4, it’d be 24 cents a hundredweight. The most…or the fourth…the last four or most of that increase is on the back. It’s about a 5.9 cents per pound increase on the fat costs, about half a cent on SNF. And on Class III, it’s the same as about a six-cent increase cost on the fat, and a little over seven cents on the SNF.

So 83 cents a hundredweight…you take that and you’re at another 50 cents-plus to transportation, you’re looking at cheese plants in Southern California looking at additional $1.30, $1.40 in their milk costs. You do the upcharge, the price, and the transportation.

T3: For those plants in Southern California?

Mike: Yes.

T3: For those plants in the Central Valley, it’s probably going to be what?

Mike: It’s gonna be…so while we’re talking about the California order, I would actually half-jokingly, half-seriously said there is really two orders in California. The Southern California market, over time, is gonna look like the Southeast order or Southern order where it’s largely Class I utilization. The cheese plants won’t be able to compete with this…you know, you’ve got declining local milk supplies, you’ve got increased costs now for cheese plants, higher transportation that they can’t really offset. And it’s…as I said, about 40 years ago, there were cheese plants in Tennessee and the Southeast and they aren’t there anymore.

So the same thing will happen over time in Southern California, and it was gonna happen no matter what system was in place. This just speeds up that process. Once you get up in the Valley…the other thing with Southern California, with the $2.10 differential, cheese plants likely down there…even with Class III being above Class IV, the value of the pool will still be high enough that you’ll probably want to pool Class III milk in Southern California most of the time. Very different situation when you move up into the Valley. Now, you’re looking at a $1.60 Class I differential. And for most times, you would see Class 3 be pooling.

So now all of a sudden, maybe you don’t have to…you know, now, you’re not bound to the Class III regulated price. Now, your reference point is where the blend price is. And you know, if the blend price…if the gap is, you know, 75 cents or a dollar less than Class III, those cheese plants might have to pay that regulated Class III price if you paid something less…if they de-pool their milk.

T3: And that starts to bring up the issue that’s been in the back of my head for…ever since people started talking about a Federal Order in California, which is…it seems to me that most of the farmers in California believe that by moving to a Federal Order system, there’s magically gonna be an extra dollar or so in their milk check. Whereas, you know, our experience is the market is what the market is. And the reason that dollar wasn’t there already was because the market couldn’t bear it.

Ted: I think Mike’s analysis is very astute, and looking at is as basically similar to our situation vis-a-vis the Southeast. What is the rationale for driving the manufacturing industry out in areas of high Class I utilization? Why does DFA particularly, and evidently CDI in this case, feel that’s to the advantage of the co-op or the milk producer? I mean, I don’t see it. I never felt that driving the manufacturing industry out of the Southeast was profitable for anybody.

Anna: But it drives your blend price up. I mean, that’s the basic thing that everyone’s gonna see there on the producer side.

T3: I tend to look at…yeah.

Ted: It does drive your blend price up, but it drives your pay prices down.

Anna: And your balancing costs up, yeah.

Ted: And your balancing costs through the roof.

Anna: Absolutely.

T3: I tend to look at it a little bit like labor unions. You know, they get so focused on getting the wages up as high as they can, they lose sight of the fact that if you get those wages up too high, the jobs go away altogether.

Mike: Yeah. I say…my short answer would be…I guess, you know, maybe a bit cynically with my 20-plus years in dairy, I joke that a lot of decisions are made on what it does to next month’s milk check, and not necessarily the milk check five years out or ten years out.

Ted: And I think you’re exactly right. That’s evidently what’s gonna happen in California.

Mike: I think…you know, as I look at it, I mean, the whole idea that it started was the farmers wanted a higher milk price. They saw the federal order price, the Class III price especially, and thought they were getting screwed. So we needed to go to this Federal Order system. And the farmers even…you know, not very months ago were saying “Well, of course the cheese plants are gonna pay the Class III price.” And they just are fundamentally…they’ve never understood the concept of depooling.

So this is gonna be a real learning experience for them, and you know, how I got out on this is I think the clear winner will be the dairy farms in Southern California. They’re gonna have plants chasing after their milk. And, you know, while it’s a declining milk shed, they’re gonna have, you know, more demand that what there is to find there, so they’re gonna win. And farmers, in general, are going to at least…to start with, they’re gonna end up ahead because that transportation credit won’t be coming out of the pool anymore. So they’re at least gonna get that money back to them to start with.

It’s a different situation once you get up into the Valley as the cheese plants start looking at this and say “Well, I really don’t need to pay regular price. I’m gonna depool and I’m gonna pay, you know, somewhere near the blend price.” My comment was I think that the Central Valley farmers net out pretty close to where they’re at today.

Ted: So the PPD…if you get that low utilization, the PPD is gonna be what? It sounds sort of like Order 30 where you’re in the 15, 20 cent range.

Mike: Negative. Over the last couple of years, it’s been negative up in the Valley.

Ted: Based on what Federal Order extrapolations have been done?

Mike: Yeah, you know…and that’s assuming all the milk is pooled, which, of course, it won’t be. But if you take a bunch of [inaudible] you’re gonna drop even more. If you make an assumption that powder eventually bounces back and gets over a dollar, then maybe there’s a little more of a hope for that…for it to be, you know, over three at times. Over the last couple years, it’s only happened two months out of the last couple of years. And over the last five years…you’ve got to back to ’14 with high powder prices, there were a number of months in ’13-’14 when IV was higher than III, which would say you would pool your Class III milk at that time. But over the last couple of years, that hasn’t been the case.

Ted: If pooling is particularly difficult…it isn’t particularly difficult, and if the PPD is irrelevant in the upper Valley. So it sounds like the Federal Order will be superfluous to the manufacturing industry in the upper Valley.

T3: I think you’re right.

Ted: Which would mean that the proprietaries in that area probably would continue business as usual. In Mike’s observation, that the real beneficiary would be those that are located south in the high-population density areas.

Richie: The farmers, right.

Ted: Yeah.

T3: The farmers, you know, in the Imperial Valley and, you know, any remaining in, you know, near L.A.

Ted: Yeah.

T3: …would definitely benefit. As they should. Just like farmers in the Southeast benefit as well. Now, granted, they have higher production costs, as I would assume that they also do in Southern California.

Ted: Well, we do run pooling programs, for example…that pool on some of the Southeastern orders. And we benefit from those programs.

T3: But the cost of that is transportation cost.

Ted: It is, mostly. And you get what you pay for.

T3: Right.

Ted: So you don’t really…you pay into the pool and then you get it back if and when you ship. Not a lot of incentive. Unless there’s a PPD difference, and if your PPD difference is nominal, what’s the point?

Mike: I think over time, if you’re an independent…if you’ve got, let’s say, a cheese plant in the Central Valley and you’ve got independent shippers, over time, you’re probably…you could probably go on your own like a Wisconsin cheese plant might be, you know, be able to do. You don’t have to worry about pooling. You just maintain your direct ship milk and go about your business. And there’s probably gonna be times…or there will be times that you could be uncompetitive. And maybe at that point, you get forced into doing something a little different. But if you look at the last couple of years…and that’s one of the things that the market administrators made very clear in the July seminars they put on is they’ve effectively deregulated, you know, 90% of the market in the state.

Ted: Well, it’s certainly gonna be interesting to see how this plays out. But it’ll take a year…

Mike: Here’s a couple other things…just to mention, the PPD I wanted to bring up. Because one of the changes will be what a farmer’s milk check looks like. And there’s two important things that they have not seen before, and it’ll be a question of how they like this. The first thing will be a PPD. They’ve never…first, they don’t know what it is. Secondly, they’ve never seen it before. And third, it’s probably gonna be negative. And if their first milk check comes with their new Federal Order and they’ve got a minus on there for something they don’t know, they’re probably not gonna be very happy about that.

The second thing, which is a much bigger dollar value, which is also gonna be new, is the quota deduction. Today, and within the time the quota system has been in place, that money to pay the quota holders has to be deducted from the pool before anything was paid out. So if all this happens, there’s not gonna be anything really new to change from today to when the Federal Order hits, but it’s gonna be visible. Today, it runs, but it’s kind of out in space somewhere that you really don’t see. You maybe know it’s there, but you don’t see it. Starting with the Federal Order, there’s a separate program now to implement that quota. And the quota is gonna be deducted from the milk check. I think that it might be shown as a deduction off the milk check.

What that means, if you’re a 1,300-cow dairy, which is not very far off an average dairy in California, that’s gonna be about $10,000 a month that is going to be deducted. And when it was originally agreed to last year, what the farmers in mind is about 37 cents a hundredweight for that quota deduction. CDFA is gonna take a couple cents that I think will be for implementation costs. So they have in mind… it’s a hundredweight. The deduction is actually off SNF pounds. So if you’re now a high component…if you have high-component milk, now you’re not paying 37 cents a hundredweight, you’re probably paying 47 cents a hundredweight. You’re gonna pay even more into this deal. And particularly for farms that don’t have any quota, $10,000 a month is…that’s kind of important, particularly in this environment where margins are pretty tight.

So where I’m going with all of this, I think that is gonna drive another discussion at some point around the value of that quota program, and it really exacerbates the friction between the haves and the have nots in there. So those are a couple important things that are gonna change just from a milk check standpoint when we get this new Federal Order.

Ted: Mike, how does the quota apply to an individual dairyman in this situation? How does he control how much Class I quota he gets it?

Anna: You buy it. You either have it or you buy it.

Ted: You’ve just got to buy it?

Mike: Yep. So ten…12, 13, years ago, there was a pretty extensive study done on this, and there was actually a quota committee which went nowhere. But at that time, the quota held by Dairy Farmers of California was valued at over $1 billion. My understanding is that somebody told me it would be…is approaching $2 billion. So there is a huge asset on farms’ balance sheets, and that’s why this is such an emotional issue about “Well, we’ll just do away with it.” Well, for some people, it’s a huge amount of money.

So you could actually go and buy it. You can actually trade or…there is a possibility you could actually go and buy it. But if you don’t have quota, you still have to pay into the system. And this is another important difference here is Grade “A” milk. This is Grade “A” milk. So if you’re a Grade “B” shipper, technically, that Grade “B” milk would not go into a Class I plant, and you would not be…you would not have a quota deduction off of your milk if you’re Grade “B.” So now, we get back to, well, if you’re a cheese plant and you don’t need Grade “A” milk, boy, you can maybe go out and go take farms to Grade “B” and save them 40 cents a hundredweight.

Now, there’s some discussions around whether they’re actually going to allow that to happen longer-term, whether they’re gonna change some of the rules at CDFA to keep from that happening. I think, somehow, the quota deduction is gonna come off all milk, regardless of Grade “A” or Grade “B.” I think, technically, in the legal language, that it’s only on Grade “A.” So you could go Grade “B” and miss…skip out on that in today’s language. But I know there’s some movement afoot to try to change that.

Anna: Do you think there’s anyone that can actually get away with that? That doesn’t care if their outputs…like, their cream is Grade “B”?

Mike: That’s the issue. If a Grade “B” messes up your cream or your whey stream, then it doesn’t work. But if you don’t have an issue with that, that would be an option that’s available, at least in today’s rules.

T3: You know, take someone…that would mean it would probably be harder for a Leprino than a Hilmar because a mozz plant spins off a lot more cream than a cheddar plant. But take someone like a Hilmar. I mean, they can put their own internal quality standards up as high as they want. But then they can say “We’re only gonna take Grade ‘B’ milk.” And so, all their farmers…it could be technically Grade “B” milk coming in, even though the quality standards are high enough. And then they use all that milk to make cheese. They don’t spin off a lot of cream in a cheddar plant.

And I don’t know…and honestly, I’m not sure how much…how important the Grade “A” status is for the whey industry, and generally speaking, my belief is it’s not.

Mike: Yeah, I think you’ve got…you know, we’ve had some discussions around, you know, Grade “A” on dry whey…whether they’re any value to that or not. But I think once you get beyond, there’s very little dry weight, and I would say most if it is in the high-protein products, 30, 40, 80, 90, and what have you. And to my knowledge, there’s really not a lot of…and to your point, it’s more around quality specs and things like that versus a Grade “A” qualification on it.

Ted: You know, that would support the use of UF skim.

T3: It would.

Ted: In a major way.

T3: It would.

Ted: To chew up the available butterfat. And that’s maybe one of the reasons why some people are looking more heavily at doing that now in the last couple of years, in the last year or so than we’ve seen prior to that.

T3: Well…

Ted: Particularly in the mozzarella area.

T3: I’m not so sure. I think that has more to do with an actual quality standard.

Ted: It does improve the quality. But people were resisting in the Italian cheese area going that way for quite a while. And now, all of a sudden, they’re not resisting anymore. So anyway, things are changing. And this will really cause the balls to go back in the air in a lot of ways, so it’ll be interesting to watch.

T3: It will be. It will be. But I can’t help…this whole conversation about the farmers’ milk check in California, it makes me…it reminds me of that 16-year-old who get his first summer job and comes home with his very first paycheck and he goes “Who the hell’s FICA and why is he taking all my money?”

Mike: Yep.

Anna: Are producers prepared for that? Has anyone been kind of mentally and emotionally preparing them for these big deductions for quota and everything that they’re gonna see? I mean, we know they’re gonna see them, but I’m guessing they don’t know.

Ted: I can tell you, no, they’re not. It would be nice…and we’re getting off the track here a little bit, but it would be nice if a little education on the farm end could be done that makes the point that legislating higher prices isn’t gonna work. You know, just because you put in a regulatory system here that says the Class III price is gonna be higher than the Class 4B price, that doesn’t mean that money comes back to the farmer. It could actually be just the opposite. Which is evidently what’s about to happen. We’re gonna redistribute where the money goes; it’s gonna go to the southern part of the state at the expense of the northern part of the state. And at the end of the day, there won’t be any difference.

T3: Mm-hmm. I think you’re right.

Ted: So, you know, we’ll see.

Mike: And we haven’t gotten into talking about the impacts to the plants. All the manufacturing plants are now…they arguably, at least directly, are less competitive than what they have been in the CDFA system. So where the regulated milk prices go up, whether they’re gonna be pooled or not…let’s just say, if they are, particularly the Class IV plants being regulated, the regulated milk costs go up. How are they gonna recover that in the marketplace? And by the way, transportation costs are a big issue right now, too. So then, what do those farmers actually see? Do they…are operations…are operating losses, do they get passed back in the form of re-blends? And one of the cheese plants told me a couple months ago, I said, “Well, all you’ve got to do is just pay a little over the blend.” Their point was “You might not even have to pay the blend if the farms are seeing reblends.”

T3: Especially if a couple plants decide they’re gonna close their doors. Because as we’ve seen over the years, the number one factor in influencing an over order premium is competition for the milk supply. And each plant that closes is one less plant competing for that milk supply.

Ted: That circles back…

Mike: Two closed this year. You’ve got another one…or a couple that are running, you know, less than full, or in some cases, a lot less than full. And rumors are probably one or two shutting down pretty quickly after the first of the year. So there’s…to your point, you’re gonna lose some of that capacity.

Ted: I still don’t see why people seem to have the view that driving the manufacturing business out benefits them. You know, let’s say you’re located in Georgia. If you had a cheese plant down there and you were charged with keeping it full, you know, the volatile supply down there has six months’ of surplus milk and six months’ of shortage. You know, you don’t have the balancing obligations at the cheese plants, you do have some. But you could work around it and the whole industry it would seem to me would benefit. Your balancing costs would be reduced to virtually nothing.

T3: Well, the balancing costs would be internalized by that cheese plant in Georgia.

Ted: Well, by the pool, and the order. He pays a premium, he gets a lower Class III price as opposed to the Class I, but the Class I is not gonna go away. Yeah, it’ll dilute the blend a little bit, but, what, a few cents of dilution of the blend can be made up very quickly by marketing advantages and balancing costs, particularly, with transportation the way it is. And we’re gonna see California…unless somebody comes to their senses, we’re gonna see California play out the same way.

T3: Especially in Southern California, I think you’re right.

Ted: Yeah. They’ve already succeeded…you know, the Chino Valley dairymen started 20, 30 years ago moving out of there and they went into New Mexico and Texas and now up to Michigan and so on. Those guys are gone. But they’ve still got some farms, most of them located in the upper valley.

T3: Right.

Ted: They’re gonna be watching this thing.

Mike: And my point has been, ten years from now, there are gonna be fewer cheese plants in Southern California. Under the CDFA system, you go to a federal order system, it just speeds up the process off forcing some of those out of business or changing the way they do business.

Ted: Yeah.

T3: Right. Okay. Hey, Mike, I just want to say thank you so much for joining us today, we really appreciate it. This was really helpful.

Mike: You’re very welcome.

Ted: Same here, Mike. We appreciate it. Thanks.

Mike: Okay. Thanks.

Ted: Bye-bye.

Mike: Talk to you later.

T3: Take care.

Anna: We welcome your participation in “The Milk Check.” If you have comments to share or questions you want answered, send an email to podcast@jacoby.com. Our theme music is composed and performed by Phil Keaggy. The Milk Check is a production of T.C. Jacoby & Co.

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Dairy cooperative support

We can put our insights to work for your operation. Learn more about dairy cooperative support services from T.C. Jacoby & Co.

Listen to The Milk Check—the most compreshensive podcast in the dairy industry.

Listen to the Milk Check

Read our weekly market reports for the sharpest analysis on industry topics and trends.

Read Recent Reports