Dairy leaders are pushing for dairy farmers in the United States as the Federal Milk Marketing Order (FMMO) hearings continue. The National Milk Producers Federation (NMPF) takes a broader strategy, covering all aspects of the sector while revising Class I differentials and making concessions. Mike Brown, chief economist for the International Dairy Foods Association (IDFA), feels that the dairy business has fundamentally altered since 2008, and that present FMMO pricing formulae need to be updated to reflect new market dynamics.
The USDA is reviewing almost 12,000 pages of testimony as it develops its proposal for FMMO modernization. Peter Vitaliano, NMPF’s vice president for economic strategy and market research, claimed that neither party will receive all they want, but the end outcome will be a market improvement over what we now have. Greg Doud, president and CEO of NMPF, said that the current formula has cost dairy farmers around 1.2 billion dollars and should be restored back to the original ‘higher-of’ system, which suited farmers best.
Stakeholders submitted fourteen suggestions to USDA for review, 21 of which were selected for inclusion in the hearing process. Two IDFA proposals have been included in the hearing process: one requesting that USDA update make allowances, which are woefully out of date after nearly 20 years of rising manufacturing costs, and a second proposal on Class I milk pricing, which puts more dollars in dairy farmers’ pockets than they would receive under the ‘higher of’ mover while allowing dairy processors to effectively manage price risk.
The following stages involve interested parties submitting a correction by 4:30 ET on April 1. The USDA is anticipated to release a proposed judgment by June 30.
