By Pete Hardin

One more time, California’s 775 Grade A dairy producers will vote in a referendum on continuing the Quote Implementation Program (QIP).   That program is commonly referred to as the state’s “milk quota” program.

The California Department of Food and Agri-culture (CDFA) is poised to announce details of this latest referendum sometime later in June.  This vote would be the second referendum among the state’s Grade A dairies in 2025.  A referendum that concluded in January 2025 narrowly maintained the existing QIP program.  QIP opponents have been banging away at the program for about six years.  Opponents view the program as a “taking” of assets. Supporters of QIP state that they paid to acquire quota and it’s an asset.

Currently, QIP deducts  $.38 per hundredweight from all Grade A milk and pays back quote holders$1.70 in Southern California and $1.40 in northern California.   Quota is based on a pound of butterfat.

Approximately $13 million is deducted from all Grade A producers’ milk income monthly.  That same amount is returned monthly to quota holders.

Historically, QIP (and its pre-2018 predecessor) were valued as rock-solid assets.  “Quota” was actively traded, and even used as collateral for loans.  But protracted challenges have significantly eroded QIP’s aggregate value, which in 2018 totaled about $1.1 billion dollars, or $500/lb.  Currently, it’s estimated total QIP value is around $770 million, or $350/lb.  

Craig Gordon, a dairy producer in Chino, California, has been a ringleader in challenges to QIP. Gordon also operates Gordon Hay.  He agreed to answer the following questions:

Question: Your cohorts have submitted a petition to CDFA for another referendum.  What specifically are your colleagues seeking in another vote on QIP? 

Craig Gordon’s Answer:  We are asking for a referendum, for the industry to decide if they want to continue with the QIP program., or terminate the pro-gram.  If a super majority votes to not terminate the QIP, it would remain a tax on the industry, and if they don’t get 65% the votes to not terminate, the QIP the Secretary will terminate the program.

Question:  You indicate that CDFA will announce details in June.  What’s your basis for that statement?

Craig Gordon’s Answer:  It is our understand-ing  since the petition was approved by the  Producer Review board, and CDFA , we were told we could expect the  referendum  to start in June of 2025.

Question: Historically, how long do Grade A dairy producers have to get their ballots returned to CDFA?  

Craig Gordon’s Answer:  Sixty days and the Secretary can add on another 30 days if  she feels it is needed, but no more than 90 days.

Question: For a QIP referendum to succeed, both a percentage of voting producers and a per-cent of the milk they represent must be achieved. What percentages are needed for a QIP referendum to succeed?  

Craig Gordon’s Answer:  For a referendum to count,  the industry must make a quorum of 51% or better of the eligible producers in the state must vote. So let’s say the number of eligible producers is 775, then it would take 395 producers voting to make the referendum count.   Then you need 65% of the eligible producers who voted or 65% of the milk volume of producers who voted.  

Example: Only the 395 producers voted in the referendum and that gives the referendum legitimacy, and 300 voted to not terminate and 95 voted to terminate.  That is 75% and more then enough for the QIP to continue on, but if 245 producers voted not to terminate and 150 producers voted to Terminate, the Secretary would have to terminate the QP, because only 62% of the industry  wants the QIP and it falls short of the necessary 65% of the producers  who voted. So depending on how they write the ballot will determine who has to get the 65% to prevail, and  to be within the QIP guidelines that called for any changes to the  QIP program, must be in the same like manner  as when the QIP came into existence. The Secretary has made it very clear that any marketing program must be wanted by a super majority and not a simple majority.  I wrote the petition and the language that I thought should be used on the ballot is exactly like the same manner when the QIP came in, but one word.  Should the QIP remain effective while the Federal Order is promulgated in California, and it would take 65% of who voted to keep the QIP.

Question:  You have criticized CDFA for a lack of transparency in handling prior QIP referenda.  Can you summarize two or three examples? 

Craig Gordon’s Answer:  Yes, it has been a real problem trying to get a vote that we can say is legitimate:

1) We had over 39 addresses from the  list that CDFA provided to us, that the post office told  us that those addresses do not exist in our postal system?    

2) We have had 15 to 30 different producers who did not receive their ballot.

3) They have declared up to 93 petitions or bal-lots  did not have valid signatures, but  they won’t tell us who they are, so we could correct the problem, and the list has dead producers on it.

Question: the QIP critics prevail in the up-coming referendum, how promptly would the pro-gram cease operation?  

Craig Gordon’s Answer:  I have been told, it would take about a one month to shut it down.

This article was originally printed in the June 2025 edition of The Milkweed. You can visit their website by visiting themilkweed.com