What Does A Federal Milk Marketing Order Look Like?

The American Farm Bureau Federation expects a major hearing on the Federal Milk Marketing Order this year.  The Federation recently set its policy priorities for the year, at the 2023 AFBF Annual Convention.  The Farm Bureau was armed with the outcome of the AFBF Federal Milk Marketing Order Forum that took place last fall in Kansas City, MO.  AFBF Economist Daniel Munch said USDA wants the industry to reach a consensus on what happens with the Federal Milk Marketing Order.

“Secretary Vilsack challenged the dairy industry and he said I’m not going to do anything with the USDA hearing on Federal Milk Marketing Orders until you get everybody in the industry in one room and you hash out these issues.  In order for a hearing process to take place, people need to submit items to the record," Munch said.  "He wanted a precursor meeting for everybody to get involved and talk about dairy issues. So, our dairy working group said, hey, we want to do this.”

So, where does the dairy industry go from here?

“We expect to submit a petition," noted AFBF Chief Economist Dr. Roger Cryan.  "I think, ideally, it’s on the same day that the National Milk Producers Federation submits, if the International Dairy Foods Association submits the same day, that’s even better. That means everyone is demonstrating to the Secretary that there’s a consensus that we need to do something. And to the extent that there is overlap among those three proposals, that’s fantastic. That’ll make most of those things kind of a no-brainer. And there will be differences, and we’ll have to make the case for the details and the policy on how they work, how they are different, why it is important to do things one way or another way.”

Cryan said there seems to be a consensus to go forward regarding the class price formulas and the Class I differentials to try find some balance in the value that’s affected by the different formulas.  He added the road to reform is a long process that starts with the petitions.

“The Department then will announce a timeline of the number of events. Usually, they first ask for additional proposals, then a hearing is scheduled, and it’s actually done in person. After the hearing, there’s an opportunity for post-hearing briefs, and then the Department will typically issue a recommended decision, which is essentially their draft proposed rule for the changes.”
  

From there, USDA will host a comment period and then issue a final rule that must be voted on by producers in each market.

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