By Paul Sousa, Director of Regulatory and Environmental Affairs

On Monday, February 2, Punxsutawney Phil predicted six more weeks of winter. While Phil was focused on the weather, the California Department of Food and Agriculture (CDFA) was busy holding two virtual meetings on California dairy issues.

The first meeting was a Producer Review Board (PRB) meeting. After the meeting was called to order, CDFA addressed board vacancies. The call for nominations remains open due to multiple vacancies, some resulting from recent resignations. Members of the dairy community were encouraged to apply or nominate qualified candidates.

The discussion then turned to remaining funds in the former Pooling and Marketing branches of the state milk marketing order, which were left over after the transition to the California Federal Milk Marketing Order. CDFA has been providing updates on these funds for several years in preparation for their eventual release. At this meeting, CDFA reported that updated accounting showed lower balances than previously announced: approximately $2.053 million in the former Pooling Division and $2.6 million in the former Marketing Division, down from earlier estimates of about $3.5 million in each account.

CDFA explained that it is conducting a transaction-by-transaction audit of the originating accounts to confirm the final balances, but indicated that the figures presented at this meeting were believed to be accurate. The PRB focused on the former Pooling Division funds, while the Marketing Division funds were scheduled to be discussed in a separate meeting later that afternoon.

Related to this discussion, CDFA announced that the Quota Implementation Program (QIP) administrative fee was reinstated effective February 1, 2026, due to low account balances and the need to fund administrative operations, including development of a new QIP software tool.

CDFA presented two options for use of the former Pooling Division funds. One option, previously discussed, was to refund the funds directly to individual dairy producers, though CDFA noted that administrative costs would significantly reduce the amount returned. A second option, newly identified by CDFA, but offered by Western United Dairies Board in January of 2024, would use the former Pooling Division funds to cover QIP administrative costs, eliminating the need to charge producers the QIP administrative fee for more than a year.

The PRB adopted resolutions recommending that the Secretary of Agriculture move the former state pooling funds into a separate account to improve transparency and use the funds to support QIP administration. Later in the meeting, the board also approved a resolution to suspend the QIP administrative fee assessment effective March 1, meaning producers will be assessed the fee for February only.

The agenda then moved to hardship petitions, with 16 requests before the board. CDFA legal staff recommended tabling hardship requests from four dairies involved in ongoing litigation against the Department and individual board members; the board approved this recommendation.

The board denied the first hardship request, submitted by a raw milk producer citing bird flu impacts. At this point, several other petitioners, or their attorneys, requested continuances to allow more time for preparation, which the board approved. As the meeting approached 1:00 p.m.—when the next CDFA meeting was scheduled—the board moved more quickly through the remaining items and another hardship was denied. CDFA had deemed four of the hardship requests incomplete. The board took up all four in one motion and denied them due to insufficient information. Another request was tabled due to time constraints, and the meeting adjourned at 1:05 p.m.

The second meeting focused on funds from the former Marketing Division. CDFA referenced a prior meeting in which approximately $3.5 million had been discussed as potential funding for industry grants benefiting both producers and processors. At that earlier meeting, there was broad agreement by the industry that the California Dairy Research Foundation (CDRF) would be an appropriate entity to administer those funds.

At this meeting, CDFA clarified that the available funding was actually $2.6 million, reflecting the updated accounting. CDFA also explained that it could not issue the funds to CDRF as a block grant because CDFA grants must be issued on a reimbursement basis for projects already underway or completed. Meeting participants suggested that the funds be treated as a refund to the industry rather than a grant, since the money originated from producer and processor assessments. CDFA expressed openness to this approach but indicated that further review would be needed. CDFA concluded by stating that it will continue working with industry representatives to determine the most appropriate and effective use of the former Marketing Division funds, with further discussion to follow.

Punxsutawney Phil may be calling for six more weeks of winter, but he does not have the insight of seeing the bees show up in California from all over the nation as an indicator that Spring is just around the corner and almond blossoms will soon be here.