The National Milk Producers Federation submitted a plan to USDA it says will modernize the Federal Milk Marketing Order system. According to a release from the federation, this plan is the product of two years of work and more than 150 meetings with various stakeholders.

“Dairy farmers and their cooperatives need a modernized Federal Milk Marketing Order system that works better for producers,” NMPF President and CEO Jim Mulhern says. “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 FMMO system has not been significantly changed since 2000. Among the proposals NMPF officials would like to see adopted are an update to the dairy product manufacturing allowance, or “make allowance,” contained in the USDA milk price formulas. The federation has proposed discontinuing the use of barrel cheese in the protein component price formula and returning to the “higher of” Class I Mover.

NMPF also proposes updating milk component factors for protein, other solids and nonfat solids in the Class III and Class IV skim milk price formulas as well as updating the Class I differential price system to reflect changes in the cost of delivering bulk milk to fluid processing plants.

On May 2, Blake Gendebien, the vice chairman of NMPF member cooperative Agri-Mark, testified before a Senate agriculture subcommittee hearing on commodity programs in the Farm Bill. He touted the need for a strong dairy safety net and called on government officials to pass FMMO proposal.

“We are heartened by the strong support among dairy farmers from coast to coast for this broad proposal,” Gendebien said. “We are hopeful that this comprehensive, thoughtful, measured approach to modernizing the program will be considered as the foundation for a national federal order hearing.”

USDA now has 30 days to review the plan. NMPF officials are hopeful the agency will grant a federal order hearing, which would be the next step toward enacting the proposed changes.