AFBF unhappy with proposed dairy make allowances increases

The USDA’s proposed changes to the Federal Milk Marketing Orders includes make allowance increases of up to seven cents per pound for butterfat, nonfat dry milk, dry whey, and cheese. 

American Farm Bureau Federation economist Danny Munch tells Brownfield if finalized, it would make a big dent in a farmer’s milk check. “When we loop that into a per-hundredweight value, that means farmers will be seeing seventy-five cents to eighty-seven cents less per hundredweight on their milk checks because of anincreased make allowance.”

Munch says the increase is very disappointing because it’s based on voluntary processor cost-of-production surveys and doesn’t necessarily reflect the true cost of production. “We are nervous that this data might overstate the costs that processors are facing, and really hoped that USDA instead waiting until we had a mandatory and audited survey as the farm bill that passed the House Ag Committee would authorize.”

During the Federal Milk Marketing Order hearing last fall and winter, processors argued they needed a larger make allowance to cover the cost of production.  Farmers argued their margins are already tight and cannot afford additional make allowances.

Stakeholders are now preparing their comments on the USDA’s proposed Federal Milk Marketing Order amendments.  Once printed in the federal register, all parties have 60 days to submit comments. 

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