This week, the National Milk Producers Federation (NMPF) submitted a comprehensive proposal to USDA for modernizing the Federal Milk Marketing Order (FMMO) system, the product of two years of examination and more than 150 meetings held to build consensus behind updates to a program that last saw significant changes in 2000.

“Dairy farmers and their cooperatives need a modernized Federal Milk Marketing Order system that works better for producers,” said NMPF President and CEO Jim Mulhern. “By updating the pricing formulas to better reflect the value of the high-quality products made from farmers’ milk, by rebalancing pricing risks that have shifted unfairly onto farmers, and by creating a pathway to better reflect processing costs going forward, we are excited to submit this plan as a path toward a brighter future for dairy.”

Upon official acceptance, USDA will have 30 days to review the plan and decide whether and how to move forward with a federal order hearing to review the plan.

AdvertisementHighlights include:

• Updating dairy product manufacturing allowances (the “make allowance”) contained in the USDA milk price formulas;
• Discontinuing the use of barrel cheese in the protein component price formula;
• Returning to the “higher of” Class I mover;
• Updating milk component factors for protein, other solids and nonfat solids in the Class III and Class IV skim milk price formulas; and
• Updating the Class I differential price system to reflect changes in the cost of delivering bulk milk to fluid processing plants.

Mulhern urged USDA to grant a hearing on the entire NMPF proposal, noting how the effectiveness of some components are dependent on the inclusion of others.

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