New York ranks among the top five dairy-producing states in the country, and its farmers depend on the FMMO system to establish minimum milk prices and ensure orderly marketing of fluid milk. Prior to the 2018 Farm Bill, Class 1 milk prices were determined using the higher value between Class 3 and Class 4 milk. However, the 2018 Farm Bill replaced this approach with an averaging formula that added 74 cents to the average of Class 3 and Class 4 prices.

This change, compounded by disruptions from COVID-19, has cost dairy farmers across the country over $1 billion in Class 1 skim milk revenue, resulting in significant financial challenges and lost income for producers. Returning to the “higher of” formula will help restore stability and fairer pricing, reversing the underperformance of the current “average-of” formula since its inclusion in the 2018 Farm Bill.

Class 1 covers milk used for fluid, or beverage, milk products. Class 2 refers to milk going into ‘soft’ manufactured products such as sour cream, cottage cheese, ice cream, and yogurt. Class 3 takes in milk used for making hard cheeses. Class 4 milk is used to make butter and dry products such as non-fat dry milk (NFDM).

Gregg Doud, President and CEO of the National Milk Producers Federation said, “The final Federal Milk Marketing Order modernization plan will provide a firmer footing and fairer milk pricing, which will help the dairy industry thrive for years to come.

Among the improvements is the decision’s return to the previous “higher of” Class I mover formula to ensure the orderly marketing of milk to benefit the entire dairy supply chain from farmer to manufacturer to consumer. We thank Representative Nick Langworthy, R-NY, for his strong, effective advocacy for enacting this change for dairy farmers.”

“We are pleased with many of the final provisions in the Federal Milk Marketing Order,” said David Fisher, president of the New York Farm Bureau. Many of the changes have been much-needed for our farmers in New York, such as updating milk composition factors and increasing county-specific Class I differentials.

However, New York Farm Bureau has led advocacy efforts to return to the “higher of” Class I mover formula to ensure dairy farmers receive a fair price. We thank Representative Nick Langworthy, R-NY, for his advocacy and efforts to ensure that was achieved.”