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Economist says milk price hearing will set precedent for years to come

An ag economist says some proposed changes to the Federal Milk Marketing Order system need about fifteen months to properly enact.

Dr. Marin Bozic with Edge Dairy Farmer Cooperative says standard component tests and changes to make allowances have been proposed, and what happens now sets the precedent for future updates. “There are already actions afoot to create a system where they would be regularly updated, so what we, how we handle make allowances and any potential implementation timeline here sets the precedent for how they will be handled once we have mandatory surveys, regular hearings, etc.”

Bozic testified during the Federal Milk Marketing Order hearing Friday, saying he is less concerned about 2025 than he is for years and potentially decades to come.  He also told the hearing he prefers all changes affecting risk management markets to take effect in January of 2026 to give time for hedgers and market makers to adjust. “Anything that can breed hedging gains for one side of the transaction and hedging losses in another that has not for a transaction that has taken place before regulations can be promulgated, if we don’t start this hearing from the outset thinking about that, what we are doing is already reducing liquidity in 2025 on CME (Chicago Mercantile Exchange).”

Bozic says 2026 is already going to be a difficult year for dairy producers, as he’s expecting cheese volumes to increase 7% year-over-year, and he says the last thing farmers need is to hamper the risk management markets.