A proposal for modernizing the Federal Milk Marketing Order (FMMO) system has been submitted by the National Milk Producers Federation (NMPF). It has been more than 20 years since the FMMO system has received any significant updates. The NMPF proposal is the result of more than 150 industry meetings and two years of development.
“Dairy farmers and their cooperatives need a modernized Federal Milk Marketing Order system that works better for producers,” NMPF President and CEO Jim Mulhern said in a news release. “By updating the pricing formulas to better reflect the value of the high-quality products made from farmers’ milk, by rebalancing pricing risks that have shifted unfairly onto farmers, and by creating a pathway to better reflect processing costs going forward, we are excited to submit this plan as a path toward a brighter future for dairy.”
The U.S. Department of Agriculture (USDA) will have 30 days to review the proposal and make a decision on whether to move forward with a hearing. NMPF highlighted five specific recommendations for amending the FMMO system in the comprehensive proposal that was submitted. One suggestion is to increase the make allowances within milk pricing formulas. Another component of the proposal is requesting a return to the “higher-of” Class I mover.
NMPF notes the organization represents two-thirds of commercial dairy farmers in the U.S., and that updates to the FMMO system are desperately needed to better reflect current industry needs. Other recommendations in the proposal include discontinuing the use of barrel cheese in the protein component price formula. Additionally, NMPF seeks updates to the milk component factors for protein, other solids, and nonfat solids in the Class III and Class IV skim milk pricing formulas. Finally, the proposal also calls for updates to the Class I differential price system in response to changing delivery costs to fluid processing plants.
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