The USDA announces a final decision on amending the federal milk marketing order pricing formulas, affecting milk pricing, marketing cost allowances, and producer referendums.
The United States Department of Agriculture (USDA), through its Agricultural Marketing Service (AMS), has issued a final decision on amendments to the uniform pricing formulas for all 11 federal milk marketing orders. The decision follows a public comment period and is aimed at updating the milk pricing system for the U.S. dairy industry.
The amendments proposed by USDA include several changes to the formulas used for milk pricing. The notable adjustments are as follows:
- Reduction in Delayed Implementation: The delayed implementation of the revised skim milk composition factors will now be reduced from 12 months to six months, allowing producers to adapt more quickly to the new regulations.
- Inclusion of Marketing Cost Factor: A new $0.0015 marketing cost factor will be included in all make allowances, which are the costs for processors to make dairy products.
- Modification of Nonfat Dry Milk Make Allowance: A change has been made to the methodology used to determine the nonfat dry milk make allowance, which affects the pricing of nonfat dry milk.
- Changes to County-Specific Class I Differentials: There will be limited adjustments to the county-specific Class I differentials, which relate to the pricing of milk for fluid consumption.
Once the final rule is published in the Federal Register, USDA will begin conducting referendums among eligible dairy producers. These producers must have had milk pooled on an order in January and will be given the opportunity to vote in favor of or against the proposed amendments. Ballots will be mailed to independent producers and qualified cooperative associations, with votes due by January 15, 2025.
As part of the process, USDA has also scheduled three webinars to provide further information about the proposed amendments and the referendum process. These webinars are set for:
- November 19, 2024, at 11 a.m.
- November 21, 2024, at 3 p.m.
- November 25, 2024, at 11 a.m.
Interested participants can access the webinar link at lanc.farm/fmmo-hearing.
The final decision follows a 49-day national hearing held between August 23, 2023, and January 30, 2024, in Carmel, Indiana. During this hearing, USDA gathered testimony and evidence regarding 21 proposals submitted by the dairy industry. Following the hearing,
USDA published a recommended decision in July 2024, which received 128 public comments.
This final decision marks an important step in shaping the future of the U.S. dairy industry, with significant implications for milk pricing, marketing costs, and overall market efficiency.
