Four Midwestern dairy groups this week announced a Federal Milk Marketing Orders proposal. The proposal aims to create long-term stability in fluid milk pricing and reducing the likelihood of negative producer price differentials that cut into farmers’ revenue last year during the pandemic.
The proposal from the Dairy Business Association, Edge Dairy Farmer Cooperative, Minnesota Milk and Nebraska State Dairy Association comes after the groups began studying options early this year. They say the proposal, which they are calling “Class III Plus,” aims to build upon the current pricing system, recent proposals by dairy cooperatives, and dairy farmer petitions to define a better Class I pricing system. The Class III Plus proposal would, among other things, tie the Class I fluid skim milk price to the Class III cheese skim milk price plus an adjuster and do away with advanced pricing, a cause of the negative Producer Price Differentials last year. The proposal is also revenue-neutral, therefore more equitable among farmers, processors and customers.