USDA Announces Decisions for Florida, California Federal Milk Marketing Orders

The U.S. Department of Agriculture said last week it is proposing two changes in milk marketing regulations, including the creation of a federal milk marketing order in the nation’s largest dairy state, California.

The USDA also said it is proposing a temporary increase in the Class I milk price in the Florida order to help with damages from last fall’s hurricane. The Florida FMMO action would implement a temporary assessment of no more than $0.09/cwt. for seven months on Class I milk in the order. The assessment will not be deducted from the pool, but instead be passed on to consumers at a rate estimated to be less than $0.01 per gallon during the collection period. The revenues are to be used to reimburse handlers and producers for the marketing losses and expenses they incurred as a result of the Hurricane Irma-related disruptions last September.

The proposed amendments were requested by five NMPF member-cooperatives whose farmer members supply the majority of the milk pooled under the Florida FMMO: Southeast Milk Inc., Dairy Farmers of America, Inc., Premier Milk Inc.; Maryland and Virginia Milk Producers Cooperative Association; and Lone Star Milk Producers.

Meanwhile, the California FMMO proposal would establish a federal order in California with many of the uniform provisions that have been adopted into the 10 current FMMOs, including product classification, end-product price formulas, Class I differential structure, and the producer-handler definition. However, the proposed order also recognizes the quota value specified in the California quota program, but would leave the administration of that program to the California Department of Food and Agriculture (CDFA).

Under the proposed FMMO, regulated minimum prices in California, especially for milk used in cheese manufacturing, are likely to be higher than what handlers pay under the current California State Order. However, the proposed FMMO would allow all handlers to elect not to pool milk used in manufacturing.

The proposed California FMMO was initiated by two NMPF member cooperatives with farmer members and processing facilities in the state: Dairy Farmers of America, Inc. and Land O’Lakes, Inc., together with California Dairies, Inc.

A referendum will be held from April 2-May 5 to determine producer approval. USDA will conduct a public meeting on April 10 in Clovis, California, to explain and answer questions about the proposed California FMMO and the producer referendum process.