Over the last 20 years, the dairy industry has experienced massive changes and evolution between exports, dairy genetics, and more. With these advances comes the need to thoroughly reevaluate how milk pricing is determined.
The Federal Milk Marketing Order hearing process kicked off five to seven weeks of testimonies and discussions in Indiana yesterday. The hearings mark a once-in-a-generation opportunity to update the milk pricing system determining how dairy farmers get paid.
Allowing for a comprehensive evaluation of the pricing practices, formulas that help decide the importance of milk components, pricing differentials, transportation costs, and more, these discussions are crucial to farmers.
“Thanks to the tireless efforts of dairy farmers and their cooperatives, this industry is poised for progress as Federal Milk Marketing Order modernization is now in sight,” Mulhern said as dairy experts and government officials gathered in Carmel, IN, for what’s expected to be five to seven weeks of testimony and discussion of proposals to update and improve the FMMO system, which last saw a major revision in 2000. “NMPF’s comprehensive proposal for improvements to the system forms the basis of this hearing, and through our members’ depth of expertise and an unmatched team of dairy farmers and cooperative analysts, we are prepared to advance our industry’s need for these updates.”
Following the U.S. Department of Agriculture’s initial presentations, the hearing will then launch into discussions of specific issues placed within the scope of the hearing, including milk composition, surveyed commodity products, Class III and Class IV formula factors; the Base Class I skim milk price; and Class I and Class II price differentials.
After the hearing’s conclusion, entities involved in the hearing then have a period of time to respond to the testimony, followed by a USDA draft decision, then more discussion, and ultimately a vote among dairy farmers on a final proposal, likely in the second half of 2024.
Because of the hearing’s complexity and the multi-step process of formulating and approving a final plan afterward, Mulhern noted that the hearing itself is far from the culmination of the process. Still, as the centerpiece of milk-pricing efforts, the next few weeks will be the most intense for public discussion of creating a better milk-price system for dairy farmers — a moment NMPF has spent years waiting for.
“Though far from the final word, this national hearing stage is a critical phase that starts a foreseeable timeline for a new system to become real,” Mulhern said. “That’s exciting for our industry. It took a long time and incredible effort to get to where we are today. With the leadership I know our member cooperatives will provide, it can only lead to a brighter tomorrow.”
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