FMMO facelift long overdue

Ag economists are calling on Congress to update the Federal Milk Marketing Order in a way that benefits farmers and processors.

Robert Wills is the president of Cedar Grove Cheese Inc. and Clock Shadow Creamery LLC in Wisconsin.  During the recent Class I Pricing Senate subcommittee hearing, the former ag economist says he fears for the dairy industry under its current pricing rules.

“There’s no other industry that’s priced like this and my recommendation would be to eliminate the pooling rules because I don’t believe they’re actually increasing the value of milk overall,” he says.

Cornell economist Christopher Wolf says when the Federal Milk Marketing Orders were created, most of the milk was used for fluid milk.  Today he says it’s not an accurate reflection of declining beverage consumption and growing cheese, butter, and total dairy production consumption along with rising exports.

“Given the age of the Federal Milk Marketing Order System, length of time since last major reform, and change in the market for both the production and consumption side, it is likely time to reexamine aspects,” he says.

Wolf lists the Class I price mover and make allowances as top priorities that need to be addressed and says the entire system needs to be healthy for it to be successful with any change considering all participants.

Catherine de Ronde, V.P. of Economics and Legislative Affairs for Agri-Mark, echoed his concerns on the ripple effect of changes.

“The current Class I Mover has caused significant depooling and substantially reduced producer revenue which was not intended—this needs to be addressed,” she says.

Economists say extremely fast-rising prices, crashing prices, and the food box program over the course of the pandemic created differences so wide, farmers became disproportionately impacted by the system and updates are desperately needed.

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