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Dairy-backed sales limits OK'd in House

By Michael Doyle
March 29, 2006

WASHINGTON - The House on Tuesday tried to settle a long-running California dairy dispute by passing a bill stopping the shipment of so-called "unregulated milk" into states. Authored by Rep. Devin Nunes, R-Tulare, the bill disciplines a handful of dairy processors that have been escaping some state and federal controls. With its final congressional green light, the legislation now goes to the White House for President Bush's expected signature.

"This has unanimous support across California," said Nunes. "This isn't just about dairy farmers. This is dairy processors; this is grocery stores." But Nunes also encountered more opposition than he may have expected, as several powerful members of Congress tried to block the bill. The legislation slipped by on a 285-128 margin, slightly more than the two-thirds needed to win under special rules operating Tuesday.

"The bill objects to a producer in Arizona doing to California what producers in California are already doing to the rest of the country," charged Rep. David Obey, D-Wis.

The Milk Regulatory Equity Act, already approved by the Senate, deals with the state and federal marketing orders that govern dairy production. California has its own marketing order; other states are covered in 10 existing federal marketing orders.

Currently, a provision that Nunes called a "loophole" allows dairy processors in states covered by the federal milk marketing order to sell milk into states governed by state orders - without complying with either state or federal rules.

"One group should not have an unfair advantage over another," said Rep. Dennis Cardoza, D-Atwater.

Rep. Jim Costa, D-Fresno, added that "some of the most productive dairies are being undermined" by the current system.

Specifically, the legislation targets Arizona-based Sara Farms.

Ranked as the nation's second-largest dairy operation, according to a 1995 Successful Farming magazine survey, Sara Farms is part of an empire that includes dairy farms in Southern California and a big bottling plant in Arizona.

San Joaquin Valley farmers say the company has an unfair advantage over California dairy producers bound by the state's milk marketing program. The Sara Farms operation can buy low-priced milk in California, bottle it in Arizona, and then bring it back to California.

Because the bottled milk is identified as coming from another state, it doesn't have to meet California's requirements. It doesn't have to be pooled with other milk produced in California, nor does it have to meet the state's minimum price requirements.