Organic Dairy Farmers Challenge Federal Milk Marketing Order System

The Coalition for Organic Dairy Exemption (CODE) has initiated legal proceedings against the U.S. government, aiming to exempt organic dairy from the Federal Milk Marketing Order (FMMO) program. The lawsuits argue that the current system, a relic of Depression-era policies, compels organic dairy producers to contribute financially to a pool that benefits conventional dairy producers, without proportional benefits to organic farmers.

According to Elvin Ranck, an organic dairy farmer plaintiff, the FMMO system "siphons revenue generated from organic dairy sales and redistributes it to non-organic dairy producers." This legal action includes a class action takings claim, seeking compensation for six years of payments into the system deemed unconstitutional by the plaintiffs.

Organic dairy, which now comprises over 10% of U.S. dairy farms, has seen consumer demand grow significantly. In 2006, organic milk sales accounted for 1.9% of all fluid milk sales, a figure expected to reach 7.0% by 2025. Despite this growth, the FMMO program has not adapted to distinguish between organic and conventional dairy in its pricing and pooling mechanisms.

The litigation is not aimed at dismantling the FMMO program entirely but seeks to highlight the need for a system that acknowledges the distinct nature of organic dairy. CODE's efforts have included proposals and administrative challenges since 2015, all of which have been rejected by the USDA.

Organic dairy farmers face higher production costs and stricter regulations compared to conventional dairy. These challenges are compounded by the FMMO's failure to differentiate between the two markets, despite USDA's own standards recognizing organic dairy as distinct. "Federal law already recognizes organic as different," assert CODE members, emphasizing the need for FMMOs to reflect this legal and market distinction.