Federal Milk Marketing Order recommendations “a mixed bag”

An American Farm Bureau Federation economist says USDA’s proposed changes to the Federal Milk Marketing Orders are not all good.

Danny Munch tells Brownfield USDA addressed the “higher of” Class I milk price mover. “The biggest takeaway is that they do recommend a switch back to the “higher of” Class I mover, which was one of our biggest priorities. We are disappointed, though, that they did not decide to switch back to the “higher of” on an emergency basis.” And, he says not making the immediate emergency change will continue to cost farmers a lot of money.

Munch is also disappointed in the proposed five to seven cent-per-pound increase in processor make allowances. “When we loop that into a per-hundredweight value, that means farmers will be seeing 75 cents to 87 cents less per hundredweight on their milk checks because of the increased make allowance.”

Munch says the data used for the make allowances was based on voluntary cost of production surveys, which he says does not accurately show what it costs to make cheese, butter, and other dairy products.  He says it would have been better to consider make allowance increases after mandatory cost of production surveys could begin.

Munch says Farm Bureau is pleased with the proposal to remove 500-pound cheese barrels from the milk pricing formulas but disappointed the 640-pound blocks were left out.  He says updating the milk component values was good for farmers.

Now, Munch says dairy stakeholders including farmers can comment on the USDA proposals once they are printed in the Federal Register in mid-July. “Once that happens, the clock starts ticking. We’ve got 60 days to comment on the recommended decision in support or opposition of some of those recommended amendments. USDA will then take another 60 days to publish a final rule. That brings us to around mid-November, right after the election.”

Once the comment periods are done, there will be a farmer referendum and Munch says it’s unclear when that might happen.  He’s also concerned about which farmers will be able to vote, because a lot of farmer’s milk is already de-pooled in the upper Midwest where cheese and butter production is strong, and those farmers might not be eligible to vote on federal orders.  Munch is also concerned that processors could de-pool milk to eliminate voting eligibility for some farmers.

AUDIO: Danny Munch from American Farm Bureau Federation discusses USDA’s recommendations for the Federal Milk Marketing Orders with Brownfield’s Larry Lee

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