California dairymen will have to wait even longer to see where things stand on joining the federal milk marketing order system.
USDA has announced it is pausing those proceedings while it awaits the outcome of an unrelated U.S. Supreme Court case, which could call into question the appointment of USDA’s administrative law judge presiding over the FMMO proceedings.
That case, Lucia v. Securities and Exchange Commission, will determine whether administrative law judges appointed by federal agencies are employees of the agencies or “inferior officers” of the government. Inferior officers are subject to the appointment clause in the Constitution and must be appointed by the president, a department head or a court.
USDA has worked under the assumption that its administrative law judges are employees. Depending on the court’s decision, the agency might be required to make some changes. It is delaying the process to preserve the integrity of the proceedings, said a spokesman for the USDA Agricultural Marketing Service.
The court is expected to render a decision on or before the end of its term on June 30.
The news is a double whammy for California dairy farmers, who were just denied a hearing on increasing milk prices by the California Department of Food and Agriculture, which cited the pending federal order.
Producers have been awaiting a final decision by USDA on a California FMMO, hoping to bring their milk prices up to par with other major milk-producing states.
“We need to get USDA’s final decision for a California FMMO out and its fate into the hands of producers who are suffering under the uncertainty the delay in this process is creating,” said Annie AcMoody, director of economic policy for Western United Dairymen.
“This delay is very disappointing because it seems neither government agency will be able (USDA) or willing (CDFA) to assist struggling California dairy families soon,” she said.
California Dairy Campaign and Milk Producers Council are likewise disappointed by the delay.
“We’re really disheartened by it; we thought we were pretty close to getting a final decision,” said Lynne McBride, CDC executive director.
Dairy producers want to move ahead with the process. It’s disappointing that the industry will now have to sit back until an unrelated court case is decided, given the current economic situation. Milk prices are $13 a hundredweight, and cost of production is $18, she said.
“Dairymen are incurring really significant losses and questioning how long they can stay in business,” she said.
Geoff Vandenhuevel, MPC board member and economic consultant, said he thinks USDA is being overly cautious in delaying the process.
“It a disappointment. We’re ready to go, and I think USDA is ready to go. You hate to see the lawyers hold it up,” he said.
He doesn’t see any similarity between the court case and USDA’s process. In that case, the SEC administrative law judge levied an enforcement action and the other side is trying to get out of it with the appointment issue, he said.
It’s hard to imagine how that applies to the California FMMO, where the administrative law judge only gathered information and doesn’t make any decisions, he said.
“I think you’ve got lawyers being very, very cautious. Unfortunately, we’re stuck in the middle of it,” he said.