News

OBBBA includes dairy processor survey mandate

An economist says the One Big Beautiful Bill Act has something many dairy farmers have been pushing for.

Danny Munch with American Farm Bureau Federation tells Brownfield the new law calls for mandatory cost of production surveys on dairy processors to justify the nearly dollar-a-hundredweight make allowance deductions from farmers’ milk checks. “It’s supposed to be biennial, so it happens every other year but we don’t know when USDA is going to publish a rule and a timeline, and begin data collection.”

Munch says having this requirement in the new law does not mean processors will immediately begin reporting cost of production data. “You know, they’re going to have to set up a methodology. They’re going to have to have, you know, staff and researchers set aside for this and with some of the limitations right now, and you have the government shutdown right now as well, That’s definitely put on delay. I don’t expect it to happen anytime soon.”

Munch says once the cost of production data comes in, there is not automatic adjustment up or down in make allowances deductions. “That’s not the case. We would have to set this up. There’s still the traditional federal milk marketing order hearing process in place to make those amendments, so we would have to have a dairy industry stakeholder, you know, claim that there’s a problem, mention that problem, and initiate a whole other hearing.”

Munch says the new surveys are supposed to bring transparency to the make allowance deductions but it’s unclear when USDA will be able to move forward with the required processor surveys.

AUDIO: Danny Munch discusses cost of production surveys with Brownfield’s Larry Lee at World Dairy Expo.