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Archive for make allowances

Federal Milk Marketing Order Reform: What Every Dairy Farmer Needs to Know Now

Thursday, September 5th, 2024

Are you ready for the USDA’s new Federal Milk Marketing Order reforms? Find out how these changes could impact your dairy farm. Stay prepared for what’s coming!

Imagine waking up to a world where the regulations governing your milk prices have changed, and you only have a few days to voice your concerns. This is the reality for dairy producers in the United States. The USDA has proposed new Federal Milk Marketing Order (FMMO) pricing formulae, a decision that could reshape the dairy industry’s future. Understanding the potential impact is not just important; it’s crucial. ‘Any dairy farmer who feels these changes might affect them should consider what they mean—not just in terms of price fluctuations but also the potential unintended consequences,’ stated a representative from the USDA. The 60-day public feedback period ends on September 13, 2024. This is your chance to make your voice heard. Don’t miss the opportunity to influence a decision shaping your future. So, what does this mean for you? Let’s delve into the details.

The Future of Milk Pricing: Your Voice Matters as USDA’s Deadline Approaches

The USDA has recently unveiled its recommended judgment on the new Federal Milk Marketing Order (FMMO) pricing formulae. This crucial information has sparked widespread interest in the dairy business. As we approach theSeptember 13, 2024 deadline, stakeholders have a unique opportunity to shape the future. This public comment phase is not just important; it’s pivotal. It empowers industry participants to influence the final decision, whether it becomes part of government directives or operates independently. After reviewing these comments, the USDA will determine the changes to the milk price environment. Your voice matters. Your input can make a difference.

Brace Yourself! Significant Changes to Milk Pricing Ahead 

The proposed reforms carry significant direct implications for the sector. These early effects will primarily manifest in price changes, potentially impacting producers and handlers pooled under the FMMO system. The potential impact of these changes cannot be overstated.

  • Increased Milk Prices
    Updating the milk composition parameters will increase milk pricing in specified orders. Higher expected component levels in skim milk, such as 3.1% protein, 5.9% other solids, and 9% nonfat solids, will raise costs by 3.3%, 6%, and 9.3%, respectively. This mainly helps farmers by increasing the price of their milk.
  • Elimination of Cheddar Barrel Price
    Removing the 500-pound barrel cheddar cheese price from the protein pricing calculation might raise the Class III milk price. If barrels had not been included in the calculation, the average Class III price would have been 47 cents higher during the last five years.
  • Decreased Milk Prices Due to Allowance Adjustments
    Increasing the make allowances reduces milk pricing. If the new USDA-recommended making allowances had been in force from 2019 to 2023, the average Class III milk price would have been 89 cents per hundredweight (cwt) cheaper, while Class IV would have been 74 cents per cwt lower.
  • Higher Base Class I Skim Milk Prices
    Reverting to the “higher of” technique for calculating introductory Class I skim milk pricing will likely raise prices. Over the last five years, this proposed regulation would have resulted in a Class I pricing 21 cents more per cwt than the present “average of” scheme.
  • Impact of Class I Differentials
    Modifying the Class I differential map increases complexity. While it may initially raise milk costs, the extent and effect differ by farm and county. Changes to the difference map may affect where milk is exported, causing additional milk production and driving down prices.

These fundamental consequences, whether higher or lower milk prices, will elicit a wave of reactions from farmers and processors, making it critical to keep aware and active in this changing market.

The Underrated Consequence: Beyond Immediate Price Shifts 

The objective complexity stems from the secondary impacts of the USDA’s proposed adjustments.

To grasp the possible hazards and rewards, go beyond the immediate price changes and study the more significant effects.

The broader ramifications include: 

  • Inconsistent milk flows due to skewed Class I differential maps.
  • Poor investment decisions in processing are driven by fluctuating make allowances.
  • Lower incentives for increasing protein and solids production in specific orders.
  • Persistently high prices that hurt global competitiveness.

These consequences have the potential to drastically change the dairy business environment, influencing everything from milk prices to worldwide competitiveness. As a result, while assessing the new pricing formulae, carefully consider these possible collateral impacts. This insight might be the difference between successful change and unexpected consequences.

Decoding USDA’s Proposed Changes

  • Milk Composition Factors
    The USDA advises changing the milk composition variables to 3.3% natural protein, 6% other solids, and 9.3% nonfat solids. This adjustment addresses the increasing trend in milk component levels. This change will cause increased milk prices in locations where payments are based on fixed assumptions about these characteristics. While this benefits cheese makers by allowing them to create more cheese from high-component raw milk, fluid milk producers may struggle to pass on these costs due to the nature of liquid milk production.
  • Surveyed Commodity Products
    The USDA suggests eliminating the 500-pound barrel cheddar cheese price from calculations and instead relying entirely on the 40-pound block cheddar price. Historically, decreased barrel prices have often reduced the protein price of Class III milk. Eliminating barrels from the equation will likely hike Class III pricing, with an average rise of 47 cents over the last five years.
  • Class III and Class IV Formula Factors
    The USDA’s new formula components include higher make allowances for cheese, butter, nonfat dry milk, and dry whey, as well as a minor rise in butterfat recovery and yield. This significant step accommodates growing production costs while lowering milk payouts. If these concessions had been in effect from 2019 to 2023, the Class III pricing would have been 89 cents cheaper, while the Class IV price would have been 74 cents lower per hundredweight. This update supports dairy groups’ suggestions while balancing conflicting ideas.
  • Base Class, I Skim Milk Price
    The “higher of” method for determining the introductory Class I skim milk price, along with a Class I extended shelf life (ESL) adjustment, is intended to assure higher pricing during times of price divergence between Class III and Class IV. Historically, employing the “higher of” approach would have raised Class I pricing by 21 cents in the last five years. The innovative ESL adjustment aims to lessen price volatility and better correlate it with ESL milk market realities.
  • Class I and Class II Differentials
    The USDA advocates for an updated Class I differential map that reflects current market conditions and milk-producing areas. This would give more meaningful incentives for efficient milk movement from surplus to deficit areas while avoiding excessive hardship for regions dealing with rising production prices. The USDA expects the dairy market to become more balanced and responsive by updating these maps.

A 2019 Lesson: When ‘Well-Intentioned’ Goes Awry 

Consider the 2019 Class I milk price formula modification from a real-world perspective. Initially, the adjustment seemed simple: switch from the “higher” price to the “average of” Class III and IV skim milk pricing, with a 74-cent increase. It was supposed to stabilize and make prices more accessible to hedgers, but it did not work out as expected.

The unanticipated market disruptions caused by COVID-19 put a kink in this otherwise well-intended adjustment. Strong price fluctuations and a significant gap between Class III and IV resulted in extraordinary volatility. The result? Producers’ pay rates are far lower than they would have earned under the prior arrangement.

For example, Class IV prices fell at the height of the pandemic, although Class III prices rose owing to increased demand for cheese and butter over fluid milk. The “average of” calculation, tied to trailing Class IV prices, produced smaller rewards than the “higher of” approach. Unintended repercussions resulted in an average deficit, considerably affecting manufacturers’ bottom lines.

This historical lesson emphasizes a vital point: changes to the FMMO may have long-term consequences that affect market stability and producer livelihoods. These instances highlight the significance of carefully considering possible secondary consequences alongside fundamental price swings.

Real-world examples demonstrate that well-intentioned regulatory changes may occasionally result in less-than-ideal consequences, emphasizing the need for thorough study and feedback during decision-making.

Ripple Effects: How Federal Order Changes Could Reshape the Dairy Landscape 

When evaluating the impact of changes to Federal Milk Marketing Orders (FMMOs), it is critical to examine the ripple effects. For example, changing the Class I differential map might affect milk flow between areas. Suppose particular places become more appealing owing to increasing differentials. In that case, milk distribution may alter in ways not justified by actual demand or production capacity. This might result in inefficiencies, with milk being delivered farther than required, raising costs and environmental implications.

Investment in processing facilities is another primary sector impacted by these developments. Adjusting allowances to reflect current production costs may encourage processors to invest in new technologies and facilities. On the other hand, if these allowances do not keep up with actual expenses, investment may stall, possibly impeding industry innovation and development. This balance is critical for sustaining a dynamic and adaptive processing industry.

Global competitiveness is the most significant strategic factor. The US dairy sector’s capacity to compete worldwide depends on competitive pricing structures in international markets. If our milk costs are artificially increased, our goods will become less appealing to overseas customers. On the other hand, competitive pricing can open up new markets while expanding current ones, boosting economic development and industry stability. The fragile balance has significant consequences for the future of dairy production and processing in the United States.

Are You Ready to Make Your Voice Heard? 

The USDA’s public comment period is your opportunity to affect the future of milk prices. This is a critical moment to speak out and share your thoughts. Whether you’re a producer, processor, or just interested in dairy, speaking out now may help influence the ultimate decision. Remember that the deadline is September 13. Please don’t pass up this chance to significantly affect the future of our industry.

The Bottom Line

As we navigate these revolutionary times in the dairy sector, it is critical to remember the larger picture. The USDA’s proposed revisions are intended to modernize the Federal Milk Marketing Order (FMMO) system, update critical formulae, and remove previously undetected inefficiencies. While the main price effects may seem insignificant, we must consider the indirect consequences. These may significantly impact anything from milk flow and processing investment to worldwide competitiveness and overall market health.

Finding a balance is essential to solving the problem. We must guarantee that changes promote a fair, efficient market for farmers, processors, and consumers. The secondary impacts, albeit more difficult to forecast, will substantially impact the industry’s long-term survival. By carefully evaluating these possible consequences, we can build a future in which the US dairy sector flourishes and successfully fulfills local and global demands.

So, as you prepare to speak out during the public comment period, examine the more significant implications of these proposed changes. A thoughtful approach to modernization may pave the way for long-term prosperity and stability in our sector. Your contribution is crucial to ensuring that the future of dairy farming is as solid and resilient as the hardworking people who power it.

Key Takeaways:

  • The USDA has released new FMMO price formulas; feedback is due by September 13.
  • Changes affect more than just milk prices—they impact milk flow, plant investment, and global competitiveness.
  • Updates include new milk composition parameters and removing 500-pound barrel cheddar cheese from pricing calculations.
  • Reverting to the “higher of” method could raise Class I skim milk prices and influence exports and production costs.
  • Careful evaluation of these changes is essential for the U.S. dairy industry’s growth and ability to meet local and global demands.

Summary: 

Significant changes are on the horizon, and it’s time to pay attention. The USDA has released new recommendations for Federal Milk Marketing Order (FMMO) price formulas, and the impact goes far beyond just a bump or drop in milk prices. With a deadline of September 13 for public feedback, now is your chance to voice your concerns and shape the future of milk pricing. This isn’t just about immediate price shifts—long-term consequences could affect everything from milk flow and plant investment to global competitiveness. The proposed reforms include updating milk composition parameters, increasing milk pricing in specified orders, and removing 500-pound barrel cheddar cheese from the protein price calculation. The new USDA-recommended make allowances could have significantly altered Class III and IV milk prices. Reverting to the “higher of” method for calculating introductory Class I skim milk pricing could raise prices, potentially affecting milk exports, causing additional milk production, and driving down prices. By carefully evaluating these possible consequences, the US dairy sector can flourish and fulfill local and global demands. Ready to dive in and make your voice heard?

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Proposed Federal Milk Marketing Order (FMO) Update “Make Allowances” Could Drastically Cut Dairy Farmers’ Profits

Monday, August 19th, 2024

How will the new USDA rule on milk processing allowances affect your dairy farm profits? Are you ready for changes in milk prices?

Summary: As the USDA proposes to adjust the ‘make allowances’ under Federal Order 30, dairy farmers might see lower milk prices. This change aims to help processors cover their increased manufacturing costs but risks cutting farmers’ margins. The interconnectedness of dairy producers, processors, and consumers makes this balance crucial. Federal Milk Marketing Orders have historically played a key role in stabilizing the industry, ensuring fair prices for all parties to sustain the future of dairy farming. According to the National Milk Producers Federation, processing milk costs have risen by 50% since 2008. Processors argue that the current allowances do not match today’s economic conditions and need updating. If processors get more funds to cover expenses, farmers might get less for their raw milk, putting pressure on farmers juggling fluctuating milk prices and sustainability issues. Lower earnings could hinder their ability to invest in better equipment or sustainable practices.

  • USDA’s proposed adjustment to ‘make allowances’ could lower milk prices for dairy farmers.
  • This change is intended to aid processors in covering escalating manufacturing costs.
  • Balance between dairy producers and processors is essential for fair profit distribution in the industry.
  • Federal Milk Marketing Orders have historically stabilized the dairy industry, ensuring fair pricing.
  • Milk processing costs have surged by 50% since 2008, according to the National Milk Producers Federation.
  • Updating make allowances could burden farmers, impacting their ability to invest in equipment and sustainable practices.
USDA regulation, dairy farmers, earnings, milk processors, make allowances, increased production costs, raw milk, National Milk Producers Federation, processing milk, economic reality, financial impact, milk prices, sustainability, product offerings, energy efficiency, milk quality, federal milk marketing orders, industry developments, fair future.

Are you a dairy farmer trying to make ends meet? Brace yourself since a new USDA regulation may reduce your hard-earned earnings. This directive seeks to increase milk processors’ make allowances.’ But how does this affect you? Why should you care? Let us break it down. Let’s discuss what these planned changes imply for you, the dairy industry’s heart and soul. We’ll look at whether the new ‘ make allowances’ under Federal Order 30 protects the interests of processors at the cost of farmers. Does this approach result in cheaper milk costs for you? The critical point here is fairness—whether this shift disproportionately advantages one side of the business. We’ll talk about the logic behind the additional allowances, the financial burden farmers may experience, and the significant consequences for the dairy industry. 

Now, Let’s Break Down What ‘Make Allowances’ Actually Are 

Now, let’s define ‘ make accommodations.’ In layman’s words, make allowances are the expenditures that processors pay while turning raw milk into various products such as cheese, yogurt, and other dairy goods. Consider it the amount they charge for their services. This price covers a variety of expenditures associated with raw milk processing, such as personnel, equipment, and other operational costs. The plan intends to provide processors greater latitude in covering increased production costs by raising these allowances. However, this might imply that less money is available for the farmers who supply the raw milk in the first place.

According to the USDA, existing make allowances have not been adjusted in over a decade despite increased production costs. Processors are trying to balance the books as market prices fluctuate and overheads—such as energy, labor, and transportation—increase. According to the National Milk Producers Federation’s research, the cost of processing milk has grown by about 50% since 2008. With these rising costs, processors claim that the present limits no longer reflect economic reality, requiring the suggested changes.

Are you feeling a Bit Anxious About What These Changes Could Mean for Your Bottom Line? 

Of course, you’re right to be concerned. Any change in make allowances directly impacts the bottom line. Let’s talk numbers. According to the USDA, the proposed changes would increase the make allowances for cheese by $0.10 per pound, butter by $0.15 per pound, and nonfat dry milk by $0.10 per pound. What does that mean for you? Essentially, the processor’s cut increases for every hundredweight (cwt) of milk, which could decrease the amount you get paid by an estimated $0.70 to $1.10 per cwt. That’s not pocket change, especially when dealing with already thin margins. 

It’s worth noting that the average dairy farm, according to recent data, produces about 23,000 pounds of milk per cow per year. So, for a herd of 100 cows, you’re looking at potential annual losses ranging from $16,100 to $25,300. Can you absorb that hit without making some tough choices?

So, What Does All This Mean for You, the Dairy Farmer? 

Whether the make allowances are altered favorably or adversely, the financial rippling impact cannot be overlooked. You may receive less if milk processors get more of the pie to pay their expenses. Yes, we are talking about farmers possibly receiving reduced raw milk prices.

But who bears the burden if processors begin to take a larger share to pay these costs? Often, it is you. This might imply tightening an already tight budget. The real challenge for farmers is balancing this added pressure while already contending with fluctuating milk prices and sustainability considerations  . The potential impact on the dairy industry’s sustainability is a crucial aspect to consider in this discussion.

Consider this: if you’re paid less for your milk, how does that affect your capacity to invest back into your farm, maybe in better equipment or more sustainable practices? Every dollar matters, and with a modified make allowance, those dollars may be fewer and further between.

You’re Not Alone. Here’s How to Prepare for This Possible Shake-Up. 

You are not alone. But don’t fear; there are things you can do to prepare for this possible shake-up.

First, have you considered broadening your product offerings? Consider going beyond milk. Cheese, yogurt, and milk-based drinks may provide additional income streams and reduce your reliance on raw milk costs.

Another wise decision is to decrease expenditures intelligently. Could you improve the energy efficiency of your operations? Invest in technology to lower labor expenses. Sometimes, modest changes might result in huge savings.

It is also critical to be informed and engaged with industry associations. Connect with your local cooperative or industry organization. These groups may provide crucial assistance and campaign for fair treatment on your behalf.

Are you optimizing milk quality? Higher-quality milk may attract higher prices, offsetting the effect of lower base pricing. Quality testing and upgrades may be direct-return investments.

Remember: information is power. The more proactive and prepared you are, the more able you will be to deal with these changes. So, have you considered what measures to take next?

The Historical Backbone: How FMMOs Shaped Dairy Farming Into What It Is Today

The Agricultural Marketing Agreement Act 1937 introduced federal milk marketing orders (FMMOs). Their primary goal was to keep milk prices stable for producers while providing customers with an adequate supply of fresh milk. Over time, these directives have established minimum rates that processors must pay dairy farmers for their milk depending on how it will be utilized, such as in fluid products or processed items like cheese and yogurt. This pricing system seeks to balance the interests of both farmers and processors by reducing the volatility that has long plagued the dairy business.

These orders help farmers plan their activities by establishing a floor price that protects against market price fluctuations. They also provide a more reliable milk supply that meets customer demand across several locations. However, the system is sometimes criticized for its complexity, especially by smaller farmers who may lack the means to traverse price algorithms. Fixed pricing may not accurately represent current market circumstances, resulting in inefficiencies.

Understanding this history explains why modifications to make accommodations are so crucial. Adjusting these allowances might disrupt the delicate balance that FMMOs strive to maintain, thereby complicating life for dairy producers under economic challenges.

The Bottom Line

The adoption of Federal Order 30 intends to increase the ‘ make allowances’ for processors, possibly lowering the prices farmers get for milk. Despite the presence of several specialists and farmers at the proposed hearings, the subject remains controversial. The discussion over fair pricing, profitability, and dairy farming’s sustainability is constantly developing. Farmers must be aware and involved in industry developments to fight for their interests and ensure a fair future. The issue remains: how will you change to maintain your profits?

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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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