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Archive for Edge Dairy Farmer Cooperative

USDA Proposes Major Changes to Federal Milk Marketing Order: Key Updates and Stakeholder Reactions

Wednesday, July 3rd, 2024

Learn about the USDA’s proposed changes to the Federal Milk Marketing Order. What do these updates mean for dairy farmers and the industry? Check out key insights and reactions below.

Imagine a sector where little legislative changes affect millions of customers and producers. This is the domain of dairy. Recent suggestions for the Federal Milk Marketing Order (FMMO) system by the USDA have attracted much attention. A pivotal hearing in Indiana in late autumn and early winter covered many dairy industry issues. The USDA’s new 600-page proposal calls for changes to modernize the FMMO. This paper dissects these important suggestions and their possible influence on the dairy sector. Why is this relevant to you? These developments could impact milk prices and marketing in the United States, influencing processors, farmers, and the dairy products you buy. Still under examination are several industry players like the American Farm Bureau Federation and the American Dairy Coalition. Knowing these developments helps one have an insightful analysis of the dairy industry’s direction.

Navigating Dairy’s Bedrock: The Evolution of the Federal Milk Marketing Order System 

Since the 1930s, the Federal Milk Marketing Order (FMMO) system has been a pillar of the US dairy sector. Designed under the Agricultural Marketing Agreement Act of 1937, it sought to guarantee fair prices for dairy farmers and balance milk markets. It helps to create a transparent and stable milk market even as it develops to meet new demands.

At first, FMMOs set minimum milk prices depending on use, creating controlled settings to protect consumers and farmers from price volatility. This guaranteed fair returns for farmers and a consistent milk supply for processors. This arrangement has helped control underproduction and overproduction, preventing sharp price changes.

By controlling the supply chain from farm to table and promoting economic stability in the agricultural sector, FMMOs help regional markets. Fair milk pricing across different locations helps to minimize inequalities and guarantees that even less competitive places are still fit for dairy production.

Efforts to modernize FMMOs continue to update them to meet technical developments in dairy production and present issues. FMMOs are vital in maintaining the financial viability of the dairy industry by improving milk composition standards and pricing policies.

The USDA’s Proposed Updates Aim for Modernization and Fairness 

The USDA’s proposed changes aim to modernize the Federal Milk Marketing Order (FMMO) system, ensuring it stays fair and relevant for today’s dairy market. Here are the fundamental changes: 

  • Milk Composition: Adjust protein levels from 3.1% to 3.3%, other solids from 5.9% to 6.0%, and nonfat solids from 9.0% to 9.3%.
  • Cheese Price Reporting: Remove 500-pound barrel cheese prices from the Dairy Products Mandatory Reporting Program survey.
  • Make Allowances: Increase allowances for cheese, butter, nonfat dry milk, dry whey, and butterfat recovery.

Stakeholders’ Initial Reactions: Weighing in on USDA’s FMMO Proposals

Stakeholders are reviewing the USDA’s proposed Federal Milk Marketing Order system revisions. Before speaking, critical organizations such as the American Farm Bureau Federation, Wisconsin Farm Bureau, and American Dairy Coalition give much thought to the plan. Laurie Fischer of the American Dairy Coalition raised a significant issue: the possible vote exclusion of sure farmers.

Edge Dairy Farmer Cooperative and the National Milk Producers Federation both recognize the work behind the initiative. Leaders like Tim Trotter value the thorough attention paid to market studies, written replies, and testimonies. Stakeholders are evaluating the suggested changes’ overall possible effects and fairness.

Voices in the Balance: Voting Eligibility and Representation Concerns 

One issue is voting eligibility for the ultimate package. American Dairy Coalition member Laurie Fischer worries that farmers whose milk isn’t pooled under the federal decree won’t be allowed to vote. This regulation raises questions about fairness and might silence numerous producers.

Tim Trotter, CEO of Edge Dairy Farmer Cooperative, shared these same worries. He underlined the necessity of a few days to review the report carefully. He questioned the present voting rules, highlighting the importance of inclusive decision-making.

One must carefully balance thorough representation with a simplified voting system. Organizations like the Wisconsin Farm Bureau and the American Farm Bureau Federation are currently evaluating the ideas; voting rights will probably remain a major topic of debate.

Industry Reactions: Diverse Opinions and Appreciations on USDA’s Proposed Changes

“This rule would bar producers from voting unless their milk is pooled in the federal order, raising fair representation issues for farmers,” Laurie Fischer from the American Dairy Coalition said of voting eligibility.

Edge Dairy Farmer Cooperative CEO Tim Trotter said, “We need a few days to review the report thoroughly, but appreciate the AMS team’s extensive effort in compiling all testimony, responses, and market analysis.”

These points of view reflect the many perspectives in the dairy sector, the need for thorough analysis, and the involvement of stakeholders as the USDA implements its recommendations.

National Milk Producers Federation Embraces USDA’s FMMO Updates with Cautious Optimism

The proposed USDA amendments excite the National Milk Producers Federation (NMPF). With his optimistic view, NMPF President and CEO Gregg Doud honored the diligence behind these suggestions. “We are glad to see much of what we suggested included in the USDA’s Federal Milk Marketing Order modernization plan,” Doud added. This answer shows that NMPF is dedicated to a fair and contemporary FMMO that advances the dairy industry.

USDA’s Proposals: A Comprehensive Overhaul with Potential Industry-Wide Impacts 

The suggested modifications by the USDA will affect the whole dairy sector.

Refined milk composition elements would help manufacturers improve milk quality and value. However, issues about voting rights might cause more small, non-pooled producers to be overlooked.

Processors may respond differently. Eliminating 500-pound barrel cheese pricing from surveys would streamline reporting, but more allowances translate into more running expenses. Until retail prices increase or efficiency improves, this might strain profits.

Higher manufacturing costs might cause dairy product consumers to pay a premium. However, they could savor more nutrient-dense and better-tasting milk options.

Seeking justice and openness, these suggested improvements seek to modernize the Federal Milk Marketing Order system. The influence will rely on the balance of healthy interests among several sectors.

The Bottom Line

The USDA’s suggested modifications to the Federal Milk Marketing Order system, which address the technical and democratic sides of the dairy supply chain, are a significant step towards modernizing dairy sector rules and guaranteeing a fair market. These adjustments include adjusting milk composition parameters, changing allowances, and considering voting exclusions.

Reactions among stakeholders are varied. While some value the careful study, others worry about farmer representation and voting eligibility. Reflecting years of policy discussion and testimony, these improvements are not just regulatory changes but might also change the dairy business’s economic environment.

The USDA seeks to establish a more open and effective system that benefits consumers and farmers. All industry views must be listened to to guarantee that the final regulation serves the larger society. Stay active, provide comments, and get in touch with your neighborhood dairy groups. Your participation depends on writing a sustainable future for dairy farming.

Key Takeaways:

  • The USDA has proposed changes to the Federal Milk Marketing Order system aiming to modernize and ensure fairness.
  • Adjustments include changes in milk composition factors and an increase in make allowances for Class III and Class IV dairy products.
  • Removal of 500-pound barrel cheese prices from the Dairy Product Mandatory Reporting Program survey is proposed.
  • Stakeholders, including major dairy organizations, are still reviewing the recommendations before commenting.
  • Voting eligibility concerns arise, particularly around the rule barring producers from voting unless their milk is pooled in the federal order.
  • The National Milk Producers Federation shows hope, reflecting the results from extensive policy development and stakeholder input.
  • This overhaul could have significant and wide-ranging impacts across the dairy industry.

Summary:

The USDA has released its recommendations for changes to the Federal Milk Marketing Order system, which includes adjustments to milk composition factors such as protein, other solids, and nonfat solids. The document also proposes removing 500-pound barrel cheese prices from the Dairy Product Mandatory Reporting Program survey and raising Class III and Class IV make allowances for cheese, butter, nonfat dry milk, dry whey, and butterfat recovery. Many dairy stakeholders, including the American Farm Bureau Federation, Wisconsin Farm Bureau, and the American Dairy Coalition, are still reviewing the proposals before commenting. One concern is the question of who farmers will get to vote on the final package, as the rule would bar producers from voting unless their milk is pooled in the federal order. The National Milk Producers Federation President and CEO Gregg Doud expressed hope that much of their proposed changes will be reflected in the USDA’s recommended Federal Milk Marketing Order modernization plan.

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Dairy Cooperative Pushes for Timely Payment Rule in Farm Bill to Protect Farmers

Thursday, June 27th, 2024

Can timely milk payments protect dairy farmers? Discover why Edge Dairy Farmer Cooperative is pushing for new rules in the farm bill to safeguard their livelihoods.

Imagine the dedication of a dairy farmer, tending to a herd of cows before sunrise every day, regardless of the season. This commitment is not just a personal choice but a crucial part of maintaining the stability of the dairy industry. Dairy cooperatives play a significant role in this, providing regular payments and assisting farmers in selling their milk, thereby ensuring the industry’s stability.

Processors under the Federal Milk Marketing Orders (FMMO) must pay farmers at least twice a month. Still, not all milk is insured by the FMMO, which increases financial risk.

Tim Trotter of Edge Dairy Farmer Cooperative says, “The risk we have right now, especially in the upper Midwest, is there’s an increasing amount of milk deployed and not covered by the FMMO.”

The issue of timely payments is not just a financial concern but a matter of urgency. Farmers in Minnesota, Wisconsin, northern Iowa, northern Illinois, and eastern North and South Dakota areas, where most of the country’s milk is outside the marketing pool, live in financial instability without the legal mandate for timely payments. Immediate action is needed to address this pressing issue.

Delayed payments affect individual farmers and have a ripple effect on the community’s well-being and agricultural operations. To prevent such social and economic disruptions, the farm bill needs to clearly outline and enforce conditions regarding timely milk payments.

The Untold Challenges of Depooling: Navigating the Complexities of Federal Milk Marketing Orders (FMMOs) 

Federal Milk Marketing Orders (FMMOs) guarantee producers are paid fairly and help maintain steady milk prices. These rules help manage cash flow and financial stability by requiring milk processors to pay dairy farms at least twice a month.

But “depooling” ruins this mechanism. Milk is taken from the controlled price pool depools, exempting it from the FMMO payment schedule. This might result in uneven and delayed payments, significantly affecting farmers in places where much milk is deployed.

Risk of Financial Instability for Dairy Farmers in Federal Order #30: The Urgency for Timely Payment Requirements

For farmers, particularly those under Federal Order #30 covering portions of Minnesota, Wisconsin, Iowa, Illinois, North Dakota, and South Dakota, the absence of prompt payment obligations for deployed milk exposes particular dangers. Although processors pay farmers twice a month under FMMOs, this regulation does not cover deployed milk, exposing producers to payment delays.

This financial volatility is problematic, given that 30% of the country’s milk comes outside the marketing pool and might cause cash flow problems. Delayed payments impede everyday spending, long-term sustainability, and farm upkeep.

Producing most of the deployed milk, farmers under Federal Order #30 need more with quick payment assurances. Legislative action mandating prompt payment for all milk might provide more security and assist in operational management and growth by farmers.

Advocating for Dairy Farmer Security: Why Timely Milk Payment is Crucial for Federal Order #30 Farmers

Under Tim Trotter’s direction, The Edge Dairy Farmer Cooperative seeks timely milk payments included in the farm bill. They contend this will financially safeguard dairy producers, particularly in milk deploying cases from Federal Milk Marketing Orders (FMMOs). Historically, processors have paid on time, but this is only assured with a legislative mandate. About thirty percent of the milk in the country is outside the marketing pool. Hence, prompt payment policies are significant for farmers—especially those under Federal Order #30—to minimize financial uncertainty.

Unbiased Milk Quality Assessments: The Imperative of Third-Party Verification Services for Accurate Component Testing

Verification services guarantee accurate and consistent milk component testing. These outside assessments validate the tools used to evaluate milk components like lactose, fat, and protein. This ensures exact measurements, which directly impact financial stability and payment computations. These services should be codified in the agriculture bill. It guarantees precise and objective quality tests for every dairy farmer, even those with deployed milk, safeguarding their income and encouraging industry openness.

The Bottom Line

Protecting dairy producers impacted by milk depooling depends on the farm bill, which includes prompt payment rules and verification tools. Verifying third-party milk quality and requiring processors to pay twice monthly helps lower financial risks and ensure correct pay. These steps support a consistent agricultural economy and guarantee the stability of the more significant dairy sector.

Key Takeaways:

  • Federal Milk Marketing Orders currently require processors to pay dairy farmers at least twice a month.
  • Farmers face a growing risk, particularly in the upper Midwest, as more milk is depooled and falls outside the protection of FMMOs.
  • Approximately 30% of the nation’s milk is outside the marketing pool, with many affected farmers in Federal Order #30 covering parts of the Midwest.
  • The cooperative seeks to ensure the payment requirement is legally mandated to guarantee its continuance.
  • Third-party verification services for component testing are also needed to ensure accurate milk checks, especially for depooled milk.

Summary:

Dairy farmers are vital to the dairy industry’s stability, providing regular payments and assisting in milk sales. However, not all milk is insured by the Federal Milk Marketing Orders (FMMO), leading to financial risk. Farmers in certain areas, such as Minnesota, Wisconsin, northern Iowa, northern Illinois, and eastern North and South Dakota, face financial instability without legal mandates for timely payments. Depooling disrupts the FMMO mechanism, causing uneven and delayed payments and impacting cash flow and farm upkeep. The Edge Dairy Farmer Cooperative advocates for timely milk payments in the farm bill to safeguard dairy producers, especially those under Federal Order #30. Codifying verification services in the agriculture bill would ensure accurate and consistent quality tests for every dairy farmer, safeguarding their income and encouraging industry openness. Protecting dairy producers impacted by milk depooling depends on the farm bill, which includes prompt payment rules and verification tools. Ensuring third-party milk quality and requiring processors to pay twice monthly can lower financial risks, support a consistent agricultural economy, and provide dairy sector stability.

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