U.S. Senate hearing focused on return to previous Class I dairy pricing formula
The 2018 Farm Bill dairy pricing formula change has been costly for dairy producers with more than $750 million in losses under the new averaging method with 74-cent adjuster compared to the previous use of the higher of Class III or IV to set Class I prices.
The “Farm Bureau Federal Milk Marketing Order Working Group” recommendations were released in October 2019 with several key recommendations, including:
- Give every dairy farmer a voice by eliminating the ability of coops to vote on behalf of member-producers on changes to federal milk marketing orders (bloc voting);
- Improve risk sharing across the supply chain in the product pricing formulas by adjusting the “make allowance” (a fixed deduction or credit for processing milk into finished dairy products) to be variable on a commodity-by-commodity basis;
- Collect more robust pricing information by significantly expanding the Agriculture Department’s mandatory price reporting survey; and
- Simplify milk pricing rules in the Southeast by aligning the qualifying criteria for pooling and eliminating transportation subsidies.
