USDA Reauthorizes Dairy Forward Pricing Program

The USDA's Agricultural Marketing Service (AMS) has recently published a final rule reauthorizing the Dairy Forward Pricing Program (DFPP), aligning with the American Relief Act, 2025. The authorization allows milk handlers to forge new contracts under the DFPP until September 30, 2025. Contracts made before this deadline carry an expiration date of September 30, 2028. This program facilitates negotiated milk pricing between milk handlers and producers, superseding federal milk marketing order minimum blend prices for non-fluid milk classes.

Initially established by the 2008 farm bill, the DFPP allows milk handlers to offer a negotiated price instead of a standard federal price. However, it does not permit forward contracting for Class I milk. As structured, the program has seen multiple authorizations and expirations, most recently lapsing on September 30, 2024.

Significantly, the USDA and associated personnel do not set contract terms or enforce prices; the regulation focuses on ensuring contractual transparency and compliance. Forward contracts necessitate a prior submission to the market administrator and must include a disclosure statement that clarifies the program's process and payment basis to producers.

These measures are designed to help stabilize the dairy market and provide price security to dairy producers in a fluctuating economic landscape.