By Andi Anderson
Changes have taken effect for dairy producers and handlers following the expiration of the Dairy Forward Pricing Program on October 1, 2026. The program's authority has ended because Congress has not passed a new Farm Bill or other legislation to extend the U.S. Department of Agriculture’s authority to continue operating the program.
The Dairy Forward Pricing Program was designed to provide dairy producers and proprietary handlers with an option to enter into forward pricing contracts for milk. These agreements helped participants manage market uncertainty by allowing milk prices to be set in advance under specific conditions.
With the expiration of the program, the U.S. Department of Agriculture (USDA) can no longer make new commitments under the Dairy Forward Pricing Program. This means that proprietary handlers establishing new forward contracts on or after October 1, 2026, will no longer receive an exemption from paying minimum Federal Milk Marketing Order prices.
The change is particularly important for proprietary handlers that market milk under Federal Milk Marketing Orders. Under the expired program, qualifying forward contracts could provide certain pricing flexibilities. However, new contracts created after the program's expiration must comply with Federal order pricing requirements.
Existing contracts are not affected by the change. Any forward pricing agreements that were established before the expiration date and that expire on or before September 30, 2029, will continue under their original terms. This provision helps ensure stability for producers and handlers who previously entered into approved agreements.
Even though the program has expired, dairy producers still have the option to enter into forward pricing contracts if they wish. Such agreements may continue to serve as a risk management tool for some operations. However, producers should understand that these contracts no longer exempt proprietary handlers from the responsibility of paying Federal order minimum prices on milk pooled under a Federal Milk Marketing Order.
The update highlights the importance of understanding current pricing regulations and contract obligations within the dairy industry. Producers and handlers should carefully review any future agreements to ensure compliance with applicable Federal milk pricing requirements.
The expiration of the Dairy Forward Pricing Program marks an important policy change for the dairy sector. While existing contracts remain protected, new forward pricing arrangements will operate under different rules. Industry participants are encouraged to stay informed about future legislative developments that could affect dairy marketing and pricing programs.
For additional information or clarification regarding these changes, dairy producers and handlers should contact their local Federal Milk Market Order office. Staying informed will help ensure compliance and support effective business planning in a changing dairy market environment.
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Categories: Iowa, Business