After more than seven weeks of discussion, USDA’s Federal Milk Marketing Order hearing is on recess. American Farm Bureau Federation Chief Economist Roger Cryan explains the issues being discussed during the hearings.
Cryan says, “How big the margin should be that’s allowed to dairy plants between the milk price and the cheese and whey and the butter and powder prices so the plants are encouraged to take farmer’s milk but still give farmers a fair share. Changing the formula price for bottling milk so that the market pooling of those milk values is fair and more consistent to avoid some of the market chaos that farmers experienced in the middle of 2020. And now, Farm Bureau is getting deeply involved in federal milk orders really for the first time in a long time to fix some of these things.”
Cryan outlines what changes Farm Bureau supports. He says, “We support the cooperatives’ efforts to update a lot of the formulas to raise milk prices, but the co-ops and the processors also want to increase the processors’ margins. We don’t want to see that happen until USDA can collect data from all the processors and their costs and their yields. We also want to end the advanced pricing of bottling milk, and we also want to increase the price for milk used to make cream and ice cream and sour cream and we want to put more products in the product price survey USDA uses to set milk prices.”
Cryan says the hearing will reconvene after Thanksgiving, however, it may not end until early next year. He says, “After that, it’ll be six or seven months until USDA proposes something, and then three to four months or maybe five months for public comments and USDA’s rewrite, then there’ll be a producer vote. So, it may be that a rule won’t be made official until the beginning of 2025, and even longer for full implementation since USDA is considering delaying the implementation of some elements to avoid disruption of the futures markets.”