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New Producer-Handler Rules Take Effect June 1

May 4, 2010


New Producer-Handler Rules Take Effect June 1

The new rules for producer-handlers were published in the Federal Register on April 23, following successful producer referenda in all Federal Order markets, and will take effect on June 1. Under the new rule, vertically integrated bottlers with over three million pounds of fluid milk sales will be required to participate in the Federal order pool just like any other large bottler.

Before this, subject to certain conditions, a large bottler with its own farm production could avoid contributing to the Federal Order pool in its market, and thus received a significant pricing advantage against other bottlers. The new rules are based on proposals made by the National Milk Producers Federation and the International Dairy Foods Association last year. A successful result on this issue was one of NMPF’s major goals of 2009. This change will add millions of dollars to the Federal Order producer pools. More importantly, it will prevent further erosion of producer prices through what had become a loophole for large producer-handlers.

The new rules can be found at this site: /sites/default/files/2010-9402.pdf. If you have questions, please call Roger Cryan in the NMPF offices.