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USDA Releases Recommendations for Federal Milk Marketing Order Overhaul

USA 03.07.2024
Source: The DairyNews
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The United States Department of Agriculture (USDA) has unveiled its comprehensive recommendations for changes to the Federal Milk Marketing Order (FMMO) system.
USDA Releases Recommendations for Federal Milk Marketing Order Overhaul
The proposals, encapsulated in a document exceeding 300 pages, were released on Monday afternoon and address various issues deliberated during the USDA hearing held last fall and early winter in Indiana.

Key Recommendations
The USDA's recommendations encompass several adjustments aimed at modernizing the FMMO system. These include:
  • Milk Composition Adjustments: Increasing the protein content fr om 3.1% to 3.3%, other solids from 5.9% to 6.0%, and nonfat solids from 9.0% to 9.3%.
  • Cheese Pricing Changes: Removing the 500-pound barrel cheese prices from the Dairy Product Mandatory Reporting Program survey and using only the 40-pound cheddar block price to determine the monthly average cheese price in the formulas.
  • Class III and Class IV Make Allowances: Raising allowances for cheese, butter, nonfat dry milk, dry whey, and butterfat recovery.
Stakeholder Reactions
Various dairy industry stakeholders, including the American Farm Bureau Federation, Wisconsin Farm Bureau, and the American Dairy Coalition, are currently reviewing the USDA's proposals before issuing their comments. A critical aspect under scrutiny is the eligibility of farmers to vote on the final package. Laurie Fischer of the American Dairy Coalition expressed concerns that the rule might bar producers from voting unless their milk is pooled in the federal order, potentially excluding more than 30% of milk, particularly from Federal Order #30, which covers much of Wisconsin and Minnesota.

Tim Trotter, CEO of Edge Dairy Farmer Cooperative, issued a statement on Monday, saying, “We will need a few days to analyze today’s report thoroughly, but what we can say is we appreciate the thorough and dedicated work the AMS team did in curating all the testimony, written responses, and market analysis done to get us wh ere we are today.” Trotter highlighted that USDA’s proposed changes include an innovative proposal by Edge Dairy Farmer Cooperative for the expanding Extended Shelf Life (ESL) fluid milk sector.

National Milk Producers Federation Response

Gregg Doud, President and CEO of the National Milk Producers Federation (NMPF), also responded positively to the USDA’s recommendations. "Based on our initial reading, NMPF is heartened that much of what we proposed after more than two years of policy development, and another year of testimony and explanation, is reflected in USDA’s recommended Federal Milk Marketing Order modernization plan," said Doud. He emphasized the complexity of crafting an effective milk-pricing system and expressed optimism about the comprehensive approach taken by the USDA, which aligns largely with the proposals developed by dairy farmers and cooperatives over the past three years.

With the USDA's recommendations now public, the next phase will involve gathering feedback from stakeholders and ultimately conducting a farmer vote to determine the acceptance of the USDA proposal. This crucial process will shape the future of milk pricing and marketing in the United States, aiming to balance the diverse needs of dairy farmers nationwide.
July 2024
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