In a letter to the Department of Agriculture, the American Farm Bureau Federation asked the agency to hold a hearing on a proposal from the National Milk Producers Federation to modernize Federal Milk Marketing Orders and provide greater transparency for dairy farmers.
Roger Cryan, AFBF Chief Economist, says the proposal includes changes supported by Farm Bureau. “The National Milk Producers Federation sent a letter to USDA asking to have a hearing on Federal Milk Marketing Order pricing. They asked for some things including adjustments to Class I differentials, modest increases in the processors make allowance, updates to the component values that are embedded in the bottling milk price. And particularly, they asked to go back to using the higher of the cheese, milk or butter, powdered milk values for bottled milk. And we sent a letter to USDA asking them to go ahead and have a hearing on that request.”
While AFBF supports the NMPF proposal, Cryan says Farm Bureau would like USDA to go even further to promote a pricing system fair to all dairy farmers.
Cryan says; “One issue is on the make allowance, they are just asking for an increase. We think it’s really important that any make allowance increase should be based on a survey of processors’ costs, which should be mandatory and audited by USDA. In addition to the higher of, we have some other ideas that we’d like to add to the discussion in the hearing, and we’d also like to see increased milk check transparency so farmers know what they’re getting.”
If USDA moves forward with the hearing process, Cryan says it will take some time. “Within 30 days of National Milk’s proposal, which they sent in a couple weeks ago, the department will have to put out some plan. They will likely ask for additional proposals, and after that they may have a pre-hearing listening session. So, maybe a hearing would happen in July or August. And then, they’ll put out a recommended decision. And typically they’ll take comments on that before they put out a final decision that will then have to go to a vote of producers. A process like that, optimistically it’s eight to 12 months.”
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