Will This Put an End to All of the California Dairy Bankruptcies?

The Business Journal calls it a “Milk Mutiny.” The three largest milk co-ops in California have signed on to a proposal to work under the federal dairy marketing plan, as opposed to the California plan. For the last four years, California dairy farmers have seen record low income and many have had to file bankruptcy petitions. I have personally filed a fair share of dairy bankruptcy cases over the last four years. What became readily clear is that the California system for determining milk prices was not working well for dairy farmers.

This proposal to put California dairy farmers under the federal system is surely a shot across the bow of the California milk price regulators, and it is well-deserved. It is estimated that since 2010, California dairy farmers have been paid $1.5 billion less than they would have been paid if they were under a federal marketing order, instead of the California system. And there is no doubt that many of those dairies that had to file bankruptcy would not have had to do so if they had been operating under a federal marketing order.

We will see what happens with the proposal made to the USDA. But if it is successful, this may spell the end of the glut of dairy bankruptcies we have experienced over the last few years.