USDA Proposes Updates to Federal Milk Marketing Orders After Extensive Review
Source: The DairyNews
After a thorough examination of over 12,000 pages of testimony and consideration of 21 proposals, the USDA's Agricultural Marketing Service (AMS) has issued its Recommended Decision to revise the pricing formulas across all 11 Federal Milk Marketing Orders (FMMOs). This decision follows a 49-day national hearing in Carmel, Indiana, marking a significant step in modernizing milk pricing mechanisms.
The Recommended Decision introduces several key changes aimed at updating the milk composition factors and pricing formulas based on the substantial evidence gathered during the proceedings. Notable recommendations include setting true protein at 3.3%, other solids at 6.0%, and nonfat solids at 9.3%. Additionally, the decision suggests removing the 500-pound barrel cheddar cheese prices from the Dairy Product Mandatory Reporting Program survey, opting instead to use the 40-pound block cheddar cheese price exclusively for determining the monthly average cheese price.
Manufacturing allowances for various products such as cheese, butter, nonfat dry milk (NFDM), and dry whey have also been updated, along with a revision of the butterfat recovery factor to 91%. Changes to the base Class I skim milk price formula and Class I differentials aim to enhance pricing equity and reflect the increased costs associated with serving the Class I market.
Industry response has been cautiously optimistic. Gregg Doud, president and CEO of the National Milk Producers Federation, expressed satisfaction that the USDA's proposal aligns closely with the industry's comprehensive policy development efforts over the past three years. Tim Trotter, CEO of the Edge Dairy Farmer Cooperative, acknowledged the need for detailed analysis of the 332-page document but appreciated the meticulous effort by the AMS in consolidating the extensive data and testimonies.
The publication of the Recommended Decision in the Federal Register is expected in early July 2024, which will open a public comment period. This phase is crucial as it allows stakeholders to provide feedback before a final decision is made. Following the comment period, a farmer vote will be organized to determine the acceptance of the proposed changes, with the vote expected to occur in early 2025.
Lucas Sjostrom, Edge Managing Director, emphasized the importance of the upcoming publication and the subsequent feedback period, marking a critical timeline for the dairy industry to engage with the proposed changes actively.
Manufacturing allowances for various products such as cheese, butter, nonfat dry milk (NFDM), and dry whey have also been updated, along with a revision of the butterfat recovery factor to 91%. Changes to the base Class I skim milk price formula and Class I differentials aim to enhance pricing equity and reflect the increased costs associated with serving the Class I market.
Industry response has been cautiously optimistic. Gregg Doud, president and CEO of the National Milk Producers Federation, expressed satisfaction that the USDA's proposal aligns closely with the industry's comprehensive policy development efforts over the past three years. Tim Trotter, CEO of the Edge Dairy Farmer Cooperative, acknowledged the need for detailed analysis of the 332-page document but appreciated the meticulous effort by the AMS in consolidating the extensive data and testimonies.
The publication of the Recommended Decision in the Federal Register is expected in early July 2024, which will open a public comment period. This phase is crucial as it allows stakeholders to provide feedback before a final decision is made. Following the comment period, a farmer vote will be organized to determine the acceptance of the proposed changes, with the vote expected to occur in early 2025.
Lucas Sjostrom, Edge Managing Director, emphasized the importance of the upcoming publication and the subsequent feedback period, marking a critical timeline for the dairy industry to engage with the proposed changes actively.
