The plan to reinvigorate the FMMO system that guides milk pricing reflects an industry that’s evolved significantly since the last comprehensive revamp in 2000. “It’s a proposal all dairy can get behind,” said Randy Mooney, chairman of NMPF’s board of directors and a dairy farmer from Rogersville, MO.
“After gathering dairy’s best minds and consulting with partners across the industry, today we are moving forward with a comprehensive FMMO proposal the entire industry can get behind,” Mooney said. “We look forward to leading a thorough, deliberative process as we submit this proposal to USDA and partner with our allies to modernize milk pricing in ways that serve dairy farmers and the entire industry.”
The board reviewed a package of changes initially developed and proposed by a task force of NMPF cooperative experts and later approved by the organization’s Economic Policy Committee.
With the board’s approval, NMPF’s next step is to move toward submitting the proposal to USDA as the basis for a federal order hearing while continuing conversations with other dairy stakeholder partners. NMPF President and CEO Jim Mulhern said the organization stands ready to assist farmers, the dairy industry and federal officials in any way it can as the process unfolds.
“We believe in a better future for this industry, and this proposal will help build that future,” he said.
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Federal Milk Marketing Order revisions
The last comprehensive revision occurred in 2000, but a log has changed in the dairy industry since then — from product preferences and plant costs, to milk composition itself. NMPF says that the adopted changes, reflects the industry’s evolution while benefiting the farmers who form the bedrock of U.S. dairy.
Proposed changes to the Federal Milk Marketing Order System include:
- Returning to the “higher of” Class I mover
- Discontinuing the use of barrel cheese in the protein component price formula
- Extending the current 30-day reporting limit to 45 days on forward priced sales on nonfat dry milk and dry whey to capture more exports sales in the USDA product price reporting
- Updating milk component factors for protein, other solids and nonfat solids in the Class III and Class IV skim milk price formulas
- Developing a process to ensure make-allowances are reviewed more frequently through legislation directing USDA to conduct mandatory plant-cost studies every two years
- Updating dairy product manufacturing allowances contained in the USDA milk price formulas
- Updating the Class I differential price system to reflect changes in the cost of delivering bulk milk to fluid processing plants.
This proposal will be submitted to the USDA for a FMMO hearing and a potential producer referendum on Federal Milk Marketing Order modernization in 2023.