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Next step in milk marketing order change should help farmers

Dairy farmers have expressed concerns about the new and much higher make allowance deductions from milk checks that resulted from the USDA’s federal milk marketing order hearing, but an economist says some good news might be coming for farmers.

Lucas Fuess with RaboBank tells Brownfield farmers saw a negative impact because of the new milk price formulas but they should see a smaller deduction next year. “There is one more phase of that to come which does take effect into December. There’s another slight tweak there which should finalize that process, and that will add a little bit of value back into those Class III and IV milk prices.”

Fuess says with the first six months of the new federal order done, USDA’s last adjustment will be made giving producers a smaller deduction. “If you look at the new formula versus the old formula on Class III and Class IV, that was around an 80-cent negetive impact. We should be getting 30-40 cents of that back here into December.”

Fuess says Class III and Class IV prices paid to farmers for making cheese and butter went down under the new federal orders, but fluid milk payments were up.  Fuess says USDA tried to find some balance for the various classes of milk.