OKEECHOBEE- The USDA is set to hold a hearing that could potentially provide some much needed relief to dairy farmers across the country.

On Aug. 23 USDA will host a dairy policy meeting to discuss possible revisions to the Federal Milk Marketing Order system that determines the price farmers receive for milk.

FMMOs were first established in the 1930s to create the rules under which dairy processors buy fresh milk from dairy farmers who supply a marketing area. The processes established by FMMOs help to maintain stable marketing relationships for all handlers and producers.

The last major rehaul of milk marketing orders occurred in 2000. With markets still reeling from the after effects of the pandemic and inflation, dairy producers are calling for the system to be updated.

Changes including increases in the costs of transporting milk, consolidation, plant closures, manufacturing costs, and shifts in milk production areas have significantly altered the industry since the last FMMO revision in 2000.

In addition to those factors, a change to the fluid-milk pricing formula in the 2018 Farm Bill led to more than $750 million in lost revenues for dairy producers in the second half of 2020 according to the National Milk Producers Federation (NMPF)

NMPF supports returning to the “higher of” Class 1 mover in a new FMMO. As well as:

• Discontinuing the use of barrel cheese in the protein component price formula;
• Extending the current 30-day reporting limit to 45 days on forward priced sales on nonfat dry milk and dry whey to capture more exports sales in the USDA product price reporting;
• Updating milk component factors for protein, other solids and nonfat solids in the Class III and Class IV skim milk price formulas;
• Developing a process to ensure make-allowances are reviewed more frequently through legislation directing USDA to conduct mandatory plant-cost studies every two years;
• Updating dairy product manufacturing allowances contained in the USDA milk price formulas; and,
• Updating the Class I differential price system to reflect changes in the cost of delivering bulk milk to fluid processing plants.

 The American Dairy Coalition has also indicated support for a change in the price setting formula for milk intended for retail sale, using “higher of” rather than the current “average of” pricing method.

The milk policy hearing is scheduled to begin at 9 a.m. on Aug. 23.