The extensive reform process culminated from intensive stakeholder hearings conducted throughout 2023 and 2024 in Indiana, where dairy farmers, cooperatives, and processors submitted detailed testimony to USDA advocating for systematic changes to federal milk marketing regulations. Industry participants across the value chain acknowledged that the existing framework had become obsolete and required substantial updates to reflect contemporary market realities, processing costs, and transportation logistics that have evolved dramatically since the previous regulatory structure was established decades ago.

Five major modifications formed the core of the updated Federal Milk Marketing Orders, including increased make allowances representing processor conversion costs, restoration of the higher-of fluid milk pricing formula, removal of barrel cheese from protein price surveys, enhanced fluid milk differentials reflecting modern transportation expenses, and adjusted composition factors accounting for actual protein and solids content in milk. While these changes were intended to create a more equitable and realistic pricing framework, the implementation has created uneven impacts across different segments of the dairy industry.

The most financially damaging change for producers centers on increased make allowances, which directly reduce the prices farmers receive for their milk by accounting for higher processor conversion costs. American Farm Bureau Federation analysis indicates that dairy farmers expressed significant concern about this specific modification during the hearing process, particularly because the underlying cost data used to justify the increases was incomplete and potentially inaccurate, creating regulatory decisions based on insufficient economic evidence that now threatens farm profitability nationwide.