Today, American Farm Bureau President Zippy Duvall wrote to Agricultural Secretary Tom Vilsack asking for further comprehensive milk pricing reform.
Duvall outlined in his letter that the current production cost to dairy farmers is $27.50, while returns are a meager $21.23. Continuing, he expresses his concerns that proposals by the International Dairy Foods Association and Wisconsin Cheese Makers Association to change parts of the Federal Milk Marketing Order (FMMO) system will further burden farmers.
According to the letter, proposals request an FMMO hearing to solely increase make allowances.
“This one-sided approach to updating federal order pricing would be devastating to America’s dairy farmers,” Duvall said.
While Farm Bureau does not oppose updating allowances, the letter states that the proposals by IDFA and WCMA do not address wider needs of the dairy industry.
While market challenges are a constant for dairy farmers, especially in “high-cost, high-risk times,” said the letter, trust is a huge part of successfully marketing milk to consumers. Duvall discussed his concern that the current petitions threaten to undercut trust between milk farmers and processors.
Farm Bureau further requested that the make allowances are based on “mandatory audited cost and yield survey,” rather than the current voluntary reporting system. Currently, the U.S. Department of Agriculture does not have authority to undertake a survey, but AFBF is hoping to change that by working with congress to pass bipartisan legislation.
“In addition to potential sample bias in the voluntary survey, the survey results do not take into account the steady increases in plant efficiencies and product yields since the formulas were established,” Duvall wrote.
The letter addresses further shortcomings that Farm Bureau believes are present in the IDFA and WCMA proposals: “Petitions to amend a federal order must contain a description and quantification of the expected impact on all segments of the industry, including dairy farmers, handlers, consumers and small businesses. The proposals submitted by IDFA and WCMA lack this vital information. “