The National Milk Producers Federation (NMPF) and American Farm Bureau Federation (AFBF) have asked the USDA to reject dairy processor petitions for a Federal Milk Marketing Order (FMMO) hearing focused strictly on manufacturing or “make” allowances. Instead, the two producer organizations are seeking a more comprehensive hearing covering a wide range of FMMO issues.
On March 28, the International Dairy Foods Association (IDFA) and Wisconsin Cheese Makers Association (WCMA) submitted petitions requesting a FMMO hearing to Dana Coale, deputy administrator of USDA Agricultural Marketing Service (AMS) dairy programs. The USDA has 30 days to either deny, issue an action plan or request additional information for any petitions seeking to amend a current FMMO.
Read: Processor groups kick off FMMO hearing request
In separate response letters to U.S. Secretary of Agriculture Tom Vilsack and USDA AMS Administrator Bruce Summers, respectively, the heads of AFBF and NMPF opposed the single-issue hearing petitions, saying a wider range of issues should be considered to address the needs of dairy producers.
While both letters expressed support for updating make allowances used in milk pricing formulas, they charged that the IDFA and WCMA proposals for data collection would be biased toward processors and substantially reduce milk prices paid to dairy producers.
In the letter to Vilsack, AFBF President Zippy Duvall said the “one-sided approach to updating federal order pricing would be devastating to America’s dairy farmers.”
Separate from the FMMO hearing process, Duvall said, creation of the framework for a mandatory, audited cost and yield survey used to calculate make allowances would first require congressional approval.
“Like NMPF, we are also concerned about the limited scope of the hearing requested by IDFA and WCMA,” Duvall wrote. “The last major update to the FMMO system occurred in 2000. We believe it is time to consider improvements that better reflect today’s milk markets across a much wider range of topics than just make allowances.”
In the letter to Summers, Jim Mulhern, NMPF president and CEO, said make allowance calculations using the IDFA proposal could reduce the U.S. average all-milk price by $1.42 per hundredweight.
“Milk price reductions of this magnitude, especially if not offset by other FMMO program updates, would be devastating to many dairy farmers across the country,” Mulhern wrote.
Mulhern said NMPF would be submitting a hearing request to the USDA in April that will include specific make allowance adjustment numbers for the four products contained in the Class III/IV pricing formulas – cheese, dry whey, butter and nonfat dry milk – as well as other “urgently needed” order modernization proposals.
“It would be economically harmful to the nation’s dairy producers to address this single issue in isolation without consideration of a number of other provisions of the current FMMO program in need of review and update,” Mulhern wrote.
Read also: Milk pricing modernization now at a pivotal point
