Session #3 of the Western United Dairy Leaders was held in Modesto California at the WUD office. The general topic of this session was California dairy economics and California milk pricing. Annie AcMoody, director of Economic Analysis for WUD, gave the first presentation for the session which was an overview of California pricing and the pooling system. Annie did a great job explaining a complicated system leaving everyone with a better understanding of how the pooling and pricing system works in California.  

Dr. William Schiek from Dairy Institute of California gave a presentation on Domestic and Global Market Outlook. He went over the basics of how the milk price is driven by supply and demand. Following Dr. Schiek’s presentation we met up with Michael Marsh and Ray Souza for dinner at Surlas Restaurant in Modesto. Throughout dinner Ray gave an overview of how the California milk pricing system has change over the years, especially in regards to milk pooling. It was interesting to hear the history of the pricing system from a dairyman who milked cows before milk pooling was around.

The following day we met back up at the WUD office after breakfast. Mike Francesconi gave the first presentation for the day giving an overview of what the Dairy Marketing Branch does within CDFA. Venetta Reed, also from CDFA presented on how cost studies are conducted through processors and how those costs are factored into the pricing system. Amber Rankin gave a presentation on the California hearing process and the difference between the Federal hearing process. Following lunch, Mike Francesconi spoke with us regarding Cost of Production Studies CDFA. This was interesting to see how the studies are conducted with a range of different styles of dairies. This is valuable information for dairymen to compare their numbers with. John Lee, Chief of the CDFA Milk Pooling Branch described his job and an overview of what the duties of the CDFA Milk Pooling Branch are. John Bressett from the producer Security Assurance Team talked about their role within CDFA and how they monitor transactions between milk handlers and producers. Don Shippelhoute wrapped up the second day with an open discussion of milk pooling. This was a very interactive presentation and a good way to end a long day of speakers.

The third and final day of the session we met up at the WUD office once again. Michael Marsh gave an overview of current issues going on in the dairy industry and how WUD is taking a proactive approach. Eric Erba, Senior Vice President from CDI, talked to us about the role co-ops play in transporting milk and making sure that milk has a home. This was an interesting presentation and eye-opening to see all that is involved once milk leaves the dairy. Tiffany LaMendola from Blimling and Associates spoke with us about margin management. This was a great presentation with material that is especially helpful now with markets being so volatile.

This was a very valuable session as milk pricing is a topic that many dairymen are not comfortable with.  The presenters in this session helped with my understanding of the California Pricing system and why things are the way they are.