Business Digest: Milk prices heading up

The price California dairy farmers receive for their milk will jump 8 percent in June, an increase likely to drive up retail milk prices about 10 cents a gallon, according to data released Friday by the California Department of Food and Agriculture.

Since March, a gallon of reduced-fat milk has been selling for a minimum of $2.70 in Northern California, after a November-to-January plateau of $3.15, according to state figures. Many supermarkets offer that minimum price only for bulk purchases of 2 gallons. Smaller quantities tend to be more expensive.

Dairy processors pay farmers for their milk according to a formula calculated monthly from the international commodity prices for butter, cheese, whey and milk powder. Prices for all four are projected to increase in the coming months.

International demand for butter has been especially strong, with U.S. exports up sevenfold in March from a year earlier.

– Jim Downing

Profit declines at RCB

RCB Corp., the parent of River City Bank, reported net income of $2.2 million for the first quarter, down 11.2 percent from the first three months of 2007.

Quarterly revenue was slightly up this year – $10.5 million vs. $10.4 million in the initial quarter a year ago.

Like other banks, River City has been taking steps to provide reserves for loan losses amid the shaky economy.

The bank reported a provision of $5.9 million at the close of 2007, but it added a comparatively moderate $225,000 to its reserves in the first quarter ended March 31.

"Also, since year-end 2007, total nonperforming loans have decreased by 40 percent to $7.2 million as of March 31, 2008. That is primarily a result of charge-offs recorded during the period due to land values," said Jeanne Reaves, president and chief executive of River City Bank.

– Mark Glover

SureWest concludes sale

Roseville-based SureWest Communications has wrapped up the sale of its wireless division to Verizon Wireless in a $69 million deal. Verizon Wireless picked up SureWest's spectrum licenses and operating assets in the Sacramento area, but SureWest will retain more than 50 communications towers.

Customers will continue on SureWest's wireless plans in the short term, but officials said Verizon will shift some 50,000 customers to its wireless network by late summer.

SureWest's 30 wireless division employees will stay on during the estimated six-month transition to Verizon, but they will have to apply for positions with Verizon once it assumes control, said Verizon spokeswoman Heidi Flato.

– Darrell Smith

In short

• Sacramento-based Pacific Ethanol Inc., which has been struggling lately, is delaying the release of its first-quarter results by a week. The results were scheduled to be released Monday. Pacific Ethanol announced the delay Friday but gave no reason. Shares closed Friday at $3.22, up 9 cents, on the Nasdaq Stock Market.

– Dale Kasler