Milk | Milk Marketing Makeover: What You need to Know to about new FMMO Reforms

In the coming weeks, a significant decision awaits dairy farmers as they prepare to cast their votes on a critical package of milk marketing reforms.

In the coming weeks, a significant decision awaits dairy farmers as they prepare to cast their votes on a critical package of milk marketing reforms. This package aims to introduce notable changes, including a higher price for marketed milk, which could significantly impact the dairy industry.

Understanding the Proposal

The Agricultural Marketing Service has reached what it considers a final decision, laying the groundwork for a farmer referendum following a 60-day public comment period and thorough assessment of the suggested amendments. At the heart of this reform lies a new method for pricing Class I milk, which is the milk sold in grocery stores. The proposed formula aims to evaluate pricing using either the higher of the Class III or Class IV prices, complemented by a differential specific to Class I production. Currently, the pricing mechanism employs an average across the board. This change could potentially inject an additional $800 million per annum into producers’ coffers.

The Historical Context

The Federal Milk Marketing Order (FMMO) system, which has been in place since 1937, requires a two-thirds majority to approve any changes. This system comprises 11 regions with marketing orders, encompassing most of the U.S. states and accounting for about three-fourths of national milk production.

Voting and Participation

To ensure broad participation, the USDA plans to send ballots directly to independent milk producers and dairy cooperatives. Marking the ballots by December 31 and ensuring they reach the USDA before January 15, 2025, will be crucial for the votes to be counted.

Additional Resources

For those seeking more detailed explanations on the amendments and the voting process, the USDA is organizing public webinars scheduled for November 19, 21, and 25. These webinars will serve as an excellent opportunity for farmers to clarify any doubts and gain a comprehensive understanding of the proposed changes.

This upcoming vote is a pivotal moment for the dairy industry and its stakeholders. The potential financial implications and operational adjustments underscore the importance of each vote. Dairy farmers are encouraged to stay informed and actively participate in shaping the industry’s future through this referendum.

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