The American Farm Bureau Federation began presenting its case for changes to the Federal Milk Marketing orders. Hearings began last week in Carmel, Indiana. On Monday, AFBF chief economist Roger Cryan was the first Farm Bureau official to testify. He discussed the bureau’s support for revising the component values in the Class III and Class IV skim price formulas.

Farm Bureau officials contend revising those formulas will create a more accurate pricing model. The AFBF proposal aligns with the National Milk Producers Federation’ plan, which would also incorporate updated component values into the Class III and IV price formulas.

 “Adjusting these values will more accurately define the market value of skim milk used in the skim/butterfat markets and in Class I in all markets,” Cryan says. “In component markets, it will ensure that Class I milk prices reflect at least the national average component value, rather than a low outdated value, which undermines the premium for Class I milk intended by FMMO pricing formulas.”’

USDA is currently considering changes to six FMMO subject areas. They include milk composition, surveyed commodity products, Class II and Class IV formula factors, base Class skim milk prices, Class I and Class II differential and changes to the Agricultural Marketing Services to accommodate additional proposals. Dairy farmers, producers and trade organization representatives are slated to testify during the hearings, which are expected to last multiple weeks.

Related:Federal Milk Marketing Order hearings begin

AFBF submitted proposals for survey commodity prices, base Class I skim milk price and the Class I and Class II differential category.  The bureau is also supporting four of the five proposals submitted by the NMPF.  Multiple Farm Bureau officials are expected to testify throughout the hearings.