USDA Starts Consideration of Dairy Modernization Requests

The U.S. Agriculture Department will now consider updates to the Federal Milk Marketing Order. The deadline for modernization briefs was April 1st.

Stephen Cain an economist with the National Milk Producers Federation says there is a huge list of requested changes and the post-hearing gave all interested parties a chance to speak.

“To effectively summarize their arguments and give USDA a concise document that outlines why they think the federal order should be amended this way or that way, so really what it was, was a summarization of what we’ve been working on for the last six months.” 

That means a close look at what is done with federal orders and making sure it’s doing the best work it can for dairy producers.

One primary issue is returning to the “higher of” Class 1 mover.

“We made a change a few years ago, turns out to not be the best decision there, so we’re looking to return to the ‘higher of’ mover, which worked for many years, maybe decades.” 

Costs have gone up in 20 years, the last time the order was updated. Other requests look at making sure the system and formulas within orders are reflective of current milk production.

“We took a step back, looked at the federal order system and said, ‘Alright great, these need to be updated, but we can’t just update one piece over there, this will benefit just one side of the industry.’ We took a holistic approach and updated changes that are beneficial for the entire industry.” 

Processor representatives have been at these hearings as well, Cain has disagreed with much of what those groups put forth. However, one of the areas they could agree on, were changes needed to make sure there is enough investment in processing, which also has not been updated in decades.

“The make allowances were a really big piece there looking to make some adjustments there to move those up to make sure we have a healthy processing industry as well as healthy dairy farmers.” 

The modernization ideas and suggestions will take a while before implementation. USDA recommendations will come in July, with finalization at the end of the year. Most decisions won’t take effect until quarter one of 2025.