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Federal milk marketing order changes will affect profitability

An economist with the American Farm Bureau Federation (AFBF) says recently approved changes to the federal milk marketing orders will affect dairy producers’ profitability.       

Danny Munch says the newly updated system that regulates minimum payments to dairy producers will be a win for some, but not for others.

“Overall, if you’re in an order or region of the country with high Class 1 utilization, or have high fluid milk utilization, you will end up better off under this new rule,” he says.

He tells Brownfield those would be orders such as the northeast and southeast, but Munch says orders like the Upper Midwest and California saw a detrimental increase in make allowances.

“That has been increased quite substantially in this final rule and results in between an $0.85 and dollar decrease per hundred weight in dairy farmers checks.”  He says, “Those make allowance increases bite into any of the benefits of the fluid milk and end up actually negatively impacting the dairy farmers in those regions.”

Munch says the changes go into effect this June.  He says AFBF is supporting legislation that would require make allowance changes to be based only on mandatory USDA surveying.

Brownfield spoke with Munch at the 2025 Illinois Dairy Summit in Carlyle.

AUDIO: Danny Munch – AFBF