The National Milk Producers Federation (NMPF) says it will submit to USDA a proposal to revise federal milk pricing through changes to the Federal Milk Marketing Order (FMMO) system. The association says, if approved, it would be the most significant update to the program since 2000.
Components of the NMPF’s proposal include:
- A return to the “higher of” Class I mover that’s fairer for farmers than the current system that seemed reasonable when it was included in the 2018 Farm Bill, but which the COVID-19 pandemic showed exposes farmers to disproportionate price risks during market disruptions.
- Updated milk component factors for protein, other solids and nonfat solids in the Class III and Class IV skim milk price formulas, recognizing that these components have increased in the U.S. farm milk supply since the current formulas were established.
- Specific make allowance adjustment numbers for the four products contained in the Class III/IV pricing formulas – cheese, dry whey, butter and nonfat dry milk – to help address increases in processing costs, as well as creating a mechanism to keep those calculations up-to-date.
- Updated Class I differential prices that reflect changes in the cost of delivering bulk milk to fluid processing plants.
The full list of adopted changes approved and recommended by the NMPF Board of Directors are listed here.
“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, Missouri. “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. 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.”
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, a move expected in late April. 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,” said Mulhern.
