(WASHINGTON D.C.) — On Thursday, USDA’s Agricultural Marketing Service announced a final rule amending the uniform pricing formulas applicable in all 11 Federal Milk Marketing Orders (FMMOs). The final rule will be published in the Federal Register on Friday, January 17 (today).
The amendment changes included returning the base Class 1 skim milk price formula to the higher-of the advanced Class 3 or 4 skim milk prices. The Class 3 and 4 make allowances are now 25.2 cents for cheese, 22 cents for butter, 24 cents for nonfat dry milk, and 26 cents for dry whey, all on a per-pound basis. USDA also removed the 500-pound barrel cheddar cheese prices from the Dairy Product Mandatory Reporting Program Survey. The skim milk composition factors are updated to 3.3 percent true protein, 6.0 percent other solids, and 9.3 percent nonfat solids, with a six-month implementation delay. The rest of the new rule will be effective June 1, 2025.
Dana Coale, deputy administrator of USDA’s Agricultural Marketing Service, says the agency is happy producers approved the referendum. “The final rule, which contains the regulatory language, has been published in the Federal Register, and it will become effective June 1, with the exception of the milk composition factors, which will become effective on December 1,” according to Coale. “So, we’re delighted to have this rule out. It will provide the industry with information going forward as they plan in 2025.”
The approval means changes to processors’ make-allowances according to Coale. “What we had to do is look at what was proposed. Obviously, nobody got exactly what they asked for,” according to Coale. “So, we looked at both sides and evaluated and weighed out what we thought the sweet spot was going to be, if you will, in making those changes because we recognize the significant impact that it has when we make any changes within the federal order system. So, after extensive analysis and extensive input from the industry, we determined that where we came out is about as good as we can get.”
Tim Trotter, CEO for Edge Dairy Cooperative, says the FMMOs being approved was not a surprise. However, he believes more work needs to be done. “I don’t think there was any surprise that it was approved,” according to Trotter. “I think for the majority of the orders, and I think for where we started and where we ended up, I think most people anticipated this. You know, I think a lot of farmers and processors will be having conversations, what’s the impact gonna be to me and my farm, and I would encourage members to reach out, and I think a lot of them did.”
Trotter added “You know, many of them got ballots in the mail. We’re making a lot of phone calls and making informed decisions. So, in the short, you know, the farmers voted on this, and they said yes. In Federal Order 30 (referring to the Upper Midwest Marketing Area), we have more work to do. Because we’re such a high manufacturing order, the impacts are gonna be very minimal or maybe not overly positive. So, we need to work, you know, harder to get more reforms to make it more viable.”
While speaking at the Dairy Strong Conference in Green Bay, WI this week, Trotter was asked a question from the crowd of whether or not the two-year, FMMO process was worth it. He says, yes, he believes so.
“Oh, I think so. I mean, it’s, again, you know, there’s this, there’s been this nagging thing, and it’s been for 10 years. I’ve been here at EDGE for 10 years, and they’ve always talked about make allowances,” says Trotter. “They always talked about, you know, it’s time for reforms. The disappointing thing, I think, for us, there was a lot of effort put into this, and it was very thoughtful. AMS did a good job running the process, but the limited scope really hurt us because it would’ve been nice to talk more broadly about how the orders could be more beneficial, but it was limited scope.”
Trotter went on to say that “so, you know, was it worth the effort? Yes, you have to be at the table, right? I mean, that’s our job. It’s EDGE’s job to represent our farms, and I’m not gonna cast a cloud that it could’ve been better or worse. I think we’ve got something we can work with, and we’re gonna work to make things better for our members.”
Brian Winnekins at affiliate station WRDN in Durand, WI contributed to this story with comments from the Dairy Strong Conference.
