Five Midwestern dairy groups that are evaluating solutions to federal milk pricing issues, which had been aggravated by the pandemic, expressed the need for the attention of Agriculture Secretary Tom Vilsack.
The groups — the Dairy Business Association, Edge Dairy Farmer Cooperative, Minnesota Milk Producers Association, Nebraska State Dairy Association and South Dakota Dairy Producers — stated in a letter to Vilsack that if there were to be a Federal Milk Marketing Orders emergency listening to about reform, as some other organizations have called for, it’s essential that it be broad in scope.
In April, the groups put forth a proposal known as Class III Plus, aimed at creating long-term steadiness in fluid milk pricing and reducing the probability of negative producer feedifferentials, which began slicing into farmers’ revenue final year at some point of the pandemic.
In this week’s letter, they said they “are not putting forward Class III Plus out of strong desire to have an FMMO hearing now. Instead, we are sharing it publicly and with USDA to exhibit there are differences of opinion inside the dairy community over how to proceed and due to the fact we think it is a higher and more forward-thinking thinking than what NMPF (National Milk Producers Federation) has said they graph to propose.
NMPF’s plan, announced remaining month, would change the modern-day Class I fluid milk price mover with the aid of adjusting the amount each two years based on stipulations over the prior 24 months, with the current mover ultimate the floor.
The groups say NMPF’s idea would improve a few elements of the current pricing structure, however largely focuses on the quick term and income that farmers did not earn in 2020.
Class III Plus would tie the Class I price to the Class III (cheese) skim milk price plus an adjuster and do away with superior pricing, a cause of the bad PPDs. The proposal is additionallyrevenue-neutral, therefore greater equitable among farmers, processors and customers. The businesses say it provides a way for farmers to recoup some of the income they might have ignored out on in 2020, and also creates steadiness going forward, including safety from negative PPDs and higher risk administration ability.
“We believe in order reform, but we would prefer to tackle more than just Class I pricing if we are going to go to the trouble and effort of having a hearing with national scope,” the corporations said in the letter. “Ultimately, the dairy community might not be ready yet to tackle a hearing with a broad scope, but we are working to prepare ourselves and our members for that discussion if and when it comes.”
