AMS Pleased With FMMO Approval

Last week, U.S. dairy producers approved the referendum on proposed changes to the Federal Milk Marketing Orders.  Dana Coale, deputy administrator of USDA’s Agricultural Marketing Service, said 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," Coale noted.  "So, we're delighted to have this rule out. It will provide the industry with information going forward as they plan in 2025.”

She said the approval means changes to processors’ make-allowances.

"What we had to do is look at what was proposed. Obviously, nobody got exactly what they asked for. 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.” 

The FMMO changes include: 

• Updating the skim milk composition factors to 3.3% true protein, 6.0% other solids, and 9.3% nonfat solids, with a six-month delayed implementation.
• Removing 500-pound barrel cheddar cheese prices from the Dairy Product Mandatory Reporting Program survey.
• Updating the Class III and Class IV manufacturing allowances to $0.2519 for cheese, $0.2272 for butter, $0.2393 for nonfat dry milk, and $0.2668 for dry whey, all on a per pound basis, and the butterfat recovery factor to 91%.
• Returning the base Class I skim milk price formula to the higher-of the advanced Class III or Class IV skim milk prices for the month. In addition, adoption of a Class I extended shelf life (ESL) adjustment for all ESL products equal to the average-of mover plus a 24-month rolling average adjuster with a 12-month lag.
• Updating the Class I differential values to reflect the increased cost of servicing the Class I market. 

Again, all aspects of the final rule will be implemented on June 1st, except for the milk composition factors, and those changes will be seen beginning December 1st. 

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