MILK PRICES ON HOLD; CALIFORNIA PRICING SYSTEM TO REMAIN UNCHANGED.

Byline: Christine Hanley Associated Press 

A county judge on Thursday ordered California's milk-pricing system to remain unchanged, postponing a scheduled 20 cent per gallon drop in the price paid by creameries to dairy farmers.

The decision by Kern County Superior Court Judge Lee P. Felice was a victory for the Milk Producers Council, a trade group. The group, which represents about 175 farmers, is trying to block a change in the government-run pricing system. That system change would have produced the price drop from $1.69 to $1.49.

Felice's decision was the latest hairpin turn in milk pricing news.

The California Department of Food and Agriculture wants to begin changing prices every month, rather than once every two months.

The goal is to bring more stability to a decades-old system by capturing current market conditions more frequently. That might bring the system more in line with national milk-pricing formulas that factor in supply and demand as well as prices of other dairy products.

The department's plan was put on hold by the courts.

But on Tuesday, Felice lifted that stay, ruling that the Milk Producers Council had not given the 24-hour notice that is required before seeking to block the new system.

The trade group, which represents mostly Southern California farmers, immediately refiled its request for a temporary restraining order.

After hearing arguments Wednesday, the judge agreed the new pricing policy should be put on hold at least until a previously scheduled Nov. 19 hearing is held in his Bakersfield courtroom.

The tug of war over milk prices in California, the nation's largest milk producer with 3.2 billion gallons last year, is rooted in a bigger debate being waged in Congress and courtrooms about the national pricing program.

Because the new California system is designed to mimic changes in the federal system, the Milk Producers Council wants any state change to wait until the federal situation stabilizes.

``It makes absolutely no sense for the state to make conforming changes to a federal system that is in an indefinite state of flux,'' said a statement from the Milk Council.

The U.S. Department of Agriculture's new pricing policy is being debated in Congress, and lawsuits seeking to overturn it are pending in Washington, D.C., and Vermont - where a judge has put the policy on hold.

The council said Felice's most recent ruling would ``allow the courts to consider the changes, while protecting the integrity of the state's milk pricing system.''

Oscar Hidalgo, spokesman for California Food and Agriculture, said ``obviously we disagree with the decision and we're going to pursue every legal option we have to institute the new milk-pricing policy.''

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Photo: (Color) George Longfellow, at Longfellows Dairy in Hanford, is among state dairy farmers affected by Thursday's milk price ruling.

Gary Kazanjian/Associated Press