The Fund was developed under the Gonsalves Milk Pooling Act to protect producers in extraordinary circumstances should their handler ever default on paying them for the contracted milk. CDFA still administers the Fund to reimburse milk producers for milk that is shipped to a handler when the handler defaults on payment.

The Secretary performs this duty by collecting a “security” charge on covered milk (which isn’t all milk) from handlers. If the value of a handler’s monthly milk purchases exceeds a certain amount, a security charge is required of the handler. If a handler fails to pay this charge, they are placed on the “ineligible” handler list cdfa.ca.gov/dairy/pdf/ineligible_list.pdf.

“MPSTF Admin Fee” is how this fund appears on your deductions with your processor and is assessed at $0.0033/cwt (only for qualified handlers under the Fund). The Fund does not cover more than two weeks’ worth of milk production. Its main purpose is to help a producer while the dairy family finds a new home for their milk.

Additionally, producers must have their contracts on file with CDFA -before
the
date
of
shipment of that milk. Put another way: your contract should be on file before a default or payment issues occur, and it’s a good idea to do this annually. Further details and limitations on the Fund can be found on CDFA’s website or in the summary of the law. If you go halfway down the page, you will see a link titled Milk Producer Security Trust Fund. Contracts may be submitted directly to CDFA through [email protected].

If you have any questions about getting your contract to CDFA, please contact Kyle Lutz, [email protected].