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Dairy Defined:

Fairness to Farmers Makes Dairy Work

June 10, 2024

Happy National Dairy Month!

It’s hard to have National Dairy Month without dairy, and it’s hard to have dairy without dairy farmers – and that’s why it’s important to treat them well.

But what hasn’t worked out well for milk producers since 2019 is the current formula for the Class I mover – the formula that helps set the price of fluid milk under Federal Milk Marketing Orders — was changed in the 2018 Farm Bill. Under current rules, which were adjusted so that milk processors could better manage pricing risk, dairy producers have lost an estimated $1.2 billion compared to the previous formula.

The losses are occurring because farmers now bear a disproportionate part of the burden when prices turn volatile. That wasn’t foreseen when the change to the formula went into effect. It wasn’t the intention of what was meant to be a revenue-neutral adjustment, and it isn’t fair. And fairness to farmers is what makes dairy work.

Fortunately, momentum for relief is building. NMPF’s proposal before the USDA’s Federal Milk Marketing Order hearing restores the old formula, and the farm bill that passed the House Agriculture Committee also brings it back. That’s more than just relief for farmers – it’s the right thing to do. And it would be a great thing to raise a glass to this Dairy Month.