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USDA announces final amendments to Federal Milk Marketing Orders
Dairy producers have until New Year’s Eve to vote on new FMMO guidelines.
3 Min Read
Getty Images/Richard Hamilton Smith
USDA’s Agricultural Marketing Service announced final proposed changes to pricing formulas for the 11 federal milk marketing orders. AMS officials say the amendments are mostly in line with recommendations published in the Federal Register on July 15. Still, there are a few changes.
“We changed a few of the Class I differentials that we had proposed initially, we made some modifications to the make allowance for non-fat dry milk in particular, and we incorporated a marketing cost factor into those make allowances as well,” AMS deputy administrator Dana Coale says.
The final proposed amendments are written as follows:
Milk Composition Factors: Update the factors to 3.3% true protein, 6% other solids, and 9.3% nonfat solids.
Surveyed Commodity Products: Remove 500-pound barrel cheddar cheese prices from the Dairy Products Mandatory Reporting Program survey and rely solely on the 40-pound block cheddar cheese price to determine the monthly average cheese price used in the formulas.
Class III and Class IV Formula Factors: Update the manufacturing allowances to: Cheese: $0.2519; Butter: $0.2272; Nonfat Dry Milk: $0.2393; and Dry Whey: $0.2668. This decision also proposes updating the butterfat recovery factor to 91%.
Base Class I Skim Milk Price: Update the formula as follows: the base Class I skim milk price would be the higher-of the advanced Class III or Class IV skim milk prices for the month. In addition, adopt a Class I extended shelf life adjustment equating to a Class I price for all ESL products equal to the average-of mover, plus a 24-month rolling average adjuster with a 12-month lag.
Class I and Class II differentials: Keep the $1.60 base differential and adopt modified location specific Class I differential values.
Those FMMO amendments will go into effect if two-thirds of dairy farmers approve them. USDA officials will soon mail ballots to eligible independent producers and dairy cooperatives. Those ballots must be returned no later than Dec. 31. USDA will continue accepting votes through Jan. 15, provided they are postmarked before 2025.
Sen. Kirsten Gillibrand, D-N.Y., who chairs the Senate Agriculture Subcommittee on Livestock, Dairy, Poultry, Local Food Systems, and Food Safety and Security, applauded USDA for reinstating the “higher-of “pricing formula. She notes the “higher of” Class I mover was in place for nearly two decades before being modified in the last farm bill. According to her, the current formula was written with good intentions but has not performed as intended. This, she says, has cost dairy farmers over a billion dollars nationwide.
“I have been fighting since 2021 to restore the previous ‘higher of’ Class I mover after our dairy farmers’ severe economic losses due to the 2018 Farm Bill pricing change,” Gillibrand says. “I am proud that my work on the Senate Agriculture Committee will finally rectify this mistake, keeping more money in the pockets of New York’s dairy farmers.”
AMS will host webinars on Nov. 19, Nov. 21 and Nov. 25 for stakeholders looking to learn more about the amendments. More information may be found at https://www.ams.usda.gov/rules-regulations/moa/dairy/hearings. That website also provides additional information about the proposals.
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