By Jamie Martin
The USDA’s recent Federal Milk Marketing Order (FMMO) reform, approved across all 11 orders, includes significant updates to milk pricing but has sparked controversy over increased make allowances. The reforms aim to improve transparency and fairness in the dairy industry.
The changes restore the “higher of” Class I milk formula, enhance Class I differentials, and improve cheese price discovery. However, AFBF President Zippy Duvall voiced concerns, stating, “The positive changes…will not be uniform for dairy farmers…and will be greatly offset by large, unjustified increases in make allowances.”
A broad industry consensus was reached in a 2022 forum organized by AFBF, advocating for a mandatory, audited survey of milk processing costs. Despite this, USDA opted for an unscientific, voluntary survey, raising concerns about skewed data and reduced milk prices for farmers.
AFBF’s analysis warns that changes without accurate data could harm farmers, contradicting the FMMO system’s purpose. While all 11 orders approved the final decision, farmers faced a tough choice: accept changes or lose federal protections.
Duvall emphasized the need for legislative action, urging Congress to direct USDA to conduct accurate surveys of processing costs to restore fairness. “The FMMO system relies on fairness and transparency,” Duvall added.
AFBF representatives actively participated in the reform process, voicing concerns about make allowance increases in discussions with USDA leaders, including Agriculture Secretary Tom Vilsack. The debate highlights ongoing challenges in achieving equitable milk pricing nationwide.
Photo Credit: usda
Categories: National