Bipartisan legislation has been introduced in the U.S. Senate and House of Representatives that would require manufacturers to report their dairy processing costs every two years.
“New York dairy farmers deserve to be paid a fair price for their milk, and they need a milk pricing system that they can count on,” said U.S. Sen. Kristen Gillibrand Thursday in a press release. “Requiring manufacturers to report dairy processing costs on a biennial basis will give dairy producers, processors, and cooperatives the data they need to ensure that their prices accurate reflect the costs of production.”
New York U.S. Reps. Nick Langworthy, a Republican, and Joe Morelle, a Democrat, are sponsoring the Fair Milk Pricing for Farmers Act in the House.
“Volatility in the dairy market causes uncertainty for farmers and consumers alike, leading to unfair prices for both. It’s critical we take action to ensure everyone receives the fairest price possible, which is exactly what this legislation seeks to do,” said Morelle in a press release.
Dairy farmers sell their milk based on a federal pricing structure called the Federal Milk Marketing Orders (FMMO). Beginning in 2023, the U.S. Department of Agriculture conducted hearings to reform the FMMO to a more updated pricing standard.
Make allowances are the approximate costs that processors collect to make dairy products like cheese and butter out of raw milk. They are deducted from the value of raw milk prior to calculating what farmers are paid for their product. Higher allowances result in a lower payout to dairy farmers, the analysis said.
The American Farm Bureau said they do not support changes to these allowances without a mandatory survey of processors’ costs which this legislation would aim to correct. David Fisher, president of the New York Farm Bureau, said they support the proposed legislation.
“It would establish mandatory audited surveys as they relate to ‘make allowances.’ These audits would be a far better indicator of actual costs than current estimates, which are based on voluntary plant participation,” Fisher said in a press release.
Other trade organizations like the National Milk Producers Federation also support the legislation.
“Regular studies on the costs of processing raw milk into manufactured dairy products would make future dairy pricing conversations more accurate based on better information, allowing future adjustments to reflect market conditions,” the organization’s statement said.
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