California Department of Food and Agriculture

Dairy Marketing Branch (DMB)

Dairy Marketing Branch

The Dairy Marketing Branch (DMB), in working closely with the Milk Pooling Branch, promotes, fosters and encourages sound production and marketing of milk that reflect market conditions by resolving critical policy issues. DMB administers the Marketing and Stabilization Plans for Market Milk in Northern and Southern California (Plans). The Branch is organized into five units, each of which concentrates on a specific area of work that contributes to administration of the Plans. The DMB's five units are Cost of Production, Manufacturing Cost, Enforcement, Statistics and Economics.

The Cost of Production Unit surveys about 275 dairies to obtain costs by the individual cost categories associated with milk production. Cost of production surveys cover the five major milk production areas in the state: Del Norte-Humboldt, North Bay, North Valley, South Valley, and Southern California.

The Manufacturing Cost Unit collects and summarizes cost data from California dairy manufacturing plants. Any plant that produces butter, dry milk products or Cheddar cheese may be asked to participate in the cost studies. The data from the cost studies are used to establish reasonable manufacturing cost allowances, yields and other adjustment factors in the milk pricing formulas.

The Enforcement Unit is responsible for enforcing laws pertaining to marketing and trade practices associated with distribution of milk and dairy products. The Food and Agricultural Code describes regulated business practices and the affected parties, which include manufacturers, distributors, producers, wholesale customers, and brokers. These laws were enacted to maintain an orderly and stable market for milk and dairy products by discouraging marketing tactics that may cause sudden market price fluctuations. The laws also deter the formation of monopolies in the wholesale and retail sectors of the dairy industry, which if left unmonitored, could lead to discriminatory practices and predatory pricing designed to force competitors out of business.

The Statistics Unit collects and compiles information on the production and utilization of dairy products produced in California. This information is supplied on a monthly basis by the milk processors and handlers in the state. Data is analyzed and is used to establish the minimum farm price. Some of the data is summarized and published in publicly available reports.

The Economics Unit works closely with the Cost of Production, Manufacturing Cost and Statistics Units and uses many of information resources provided to develop reports and analyses. The Economics Unit is responsible for establishing the monthly minimum farm prices that are published in the price letter. In addition, the Unit also researches and publishes policy issues and alternatives. During public hearings to amend the Milk Stabilization Plans, personnel from the Economics Unit typically sit on the Hearing Panel and receive testimony from witnesses.