Tag: Federal Milk Marketing Order

FMMO Victory Caps Successful 2024, Gives 2025 Momentum

Posted on by Theresa Sweeney

Four years of NMPF’s coordinated leadership set a positive tone for 2025, with USDA’s announcement Jan. 16 that all federal orders had accepted its proposal for Federal Milk Marketing Order modernization.

NMPF thanked USDA and the dozens of farmers and cooperative leaders who successfully steered FMMO toward a successful conclusion, with a comprehensive revamp heavily influenced by NMPF priorities and advocacy.

“Dairy farmers and cooperatives have done what they do best – lead their industry for the benefit of all,” said Gregg Doud, president and CEO of NMPF, said in a statement released that day.

“This final plan will provide a firmer footing and fairer milk pricing, which will help the dairy industry thrive for years to come. We appreciate the monumental contributions across government and the dairy industry that made this happen. The industry, and all dairy consumers, owe all of you a debt of gratitude.”

The new FMMO comes after more than 200 NMPF-led meetings to formulate the proposal that contributed heavily to USDA’s final decision, as well as a record-length 49-day federal order hearing and approval from the farmers who are covered under all federal milk marketing orders.

The new federal milk-pricing system, which officially will be published in the Federal Register tomorrow, will mostly take effect June 1 – coincidentally, World Milk Day – and is closely aligned with the principles of NMPF’s member-led recommendations, a process that began nearly four years ago.

Highlights include:

  • Returning the base Class I skim milk price formula to the higher-of the advanced Class III or Class IV skim milk prices for the month. In addition, adoption of a Class I extended shelf life (ESL) adjustment for all ESL products equal to the average-of mover plus a 24-month rolling average adjuster with a 12-month lag.
  • Updating Class III and IV manufacturing allowances for cheese, butter, nonfat dry milk and dry whey, and the butterfat recovery factor.
  • Updating the Class I differential values to reflect the increased cost of servicing the Class I market.
  • Updating skim milk composition factors, with implementation delayed six months until Dec. 1.
  • Removing 500-pound barrel cheddar cheese prices from the Dairy Product Mandatory Reporting Program survey.

NMPF has more resources to understand FMMO modernization and the road taken to get there. Farmers and cooperatives will have opportunities to learn more about the new system through webinars and other materials offered in coming weeks.

NMPF will also continue pushing for elements of its proposal that require congressional authorization, including mandatory dairy manufacturing cost reporting to provide accurate, transparent data to inform future milk pricing discussions.

NMPF Thanks Members, USDA for FMMO Leadership

Posted on by Theresa Sweeney

NMPF thanked USDA and the dozens of farmers and cooperative leaders who successfully steered Federal Milk Marketing Order modernization to a successful conclusion.

“Dairy farmers and cooperatives have done what they do best – lead their industry for the benefit of all,” said Gregg Doud, president and CEO of NMPF. “This final plan will provide a firmer footing and fairer milk pricing, which will help the dairy industry thrive for years to come. We appreciate the monumental contributions across government and the dairy industry that made this happen. The industry, and all dairy consumers, owe all of you a debt of gratitude.”

The new FMMO comes after more than 200 NMPF-led meetings to formulate the proposal that contributed heavily to USDA’s final decision, as well as a record-length 49-day federal order hearing and approval from the farmers who are covered under all federal milk marketing orders.

The new federal milk-pricing system, which officially will be published in the Federal Register tomorrow, will mostly take effect June 1 – coincidentally, World Milk Day – and is closely aligned with the principles of NMPF’s member-led recommendations, a process that began nearly four years ago.

Highlights include:

  • Returning the base Class I skim milk price formula to the higher-of the advanced Class III or Class IV skim milk prices for the month. In addition, adoption of a Class I extended shelf life (ESL) adjustment for all ESL products equal to the average-of mover plus a 24-month rolling average adjuster with a 12-month lag.
  • Updating the Class III and IV manufacturing allowances for cheese, butter, nonfat dry milk and dry whey, and the butterfat recovery factor.
  • Updating the Class I differential values to reflect the increased cost of servicing the Class I market.
  • Updating skim milk composition factors, with implementation delayed six months until Dec. 1.
  • Removing 500-pound barrel cheddar cheese prices from the Dairy Product Mandatory Reporting Program survey.

NMPF has more resources to understand FMMO modernization and the road taken to get there. Farmers and cooperatives will have opportunities to learn more about the new system through webinars and other materials offered in coming weeks. NMPF will also continue pushing for elements of its proposal that require congressional authorization, including mandatory dairy manufacturing cost reporting to provide accurate, transparent data to inform future milk pricing discussions.

NMPF’s Galen Offers Highlights of 2024 Annual Meeting in Phoenix

Posted on by Chris Galen

NMPF’s Senior Vice President Chris Galen reviews highlights of National Milk’s 2024 annual meeting in Phoenix for the listeners of Dairy Radio Now. The annual conference, which just concluded Oct. 23, reviewed NMPF’s work this year on FMMO modernization, the farm bill, and dealing with HPAI in dairy cows.

 

How the World Dairy Expo Shows NMPF’s Breadth

Posted on by Alan Bjerga

Alan Bjerga, NMPF Executive Vice President of Communications, discusses how NMPF’s strong presence at the World Dairy Expo shows the breadth of the organization’s service to its members in an interview with WEKZ, Janesville, WI. NMPF-affiliated offerings include a panel on Federal Milk Marketing Order modernization, a seminar on succession planning, a look at women’s leadership in dairy and H5N1 biosecurity management on dairy farms. The National Dairy FARM Program will also be out in full force, Bjerga noted.

FMMO Persistence Pays off for Farmers

Posted on by Theresa Sweeney
  • USDA’s recommended FMMO decision incorporates NMPF proposals
  • Economics team member provided market outlooks and FMMO process updates across the country

NMPF’s Joint Economics Unit saw intense Federal Milk Marketing Order modernization in 2024, especially in the year’s earlier months. NMPF submitted its final legal brief to USDA in March, emphasizing that farmers are the reason the order system exists and that they should be the priority as USDA considers its final decision.

USDA released its recommended FMMO modernization plan July 1, agreeing in large part with the underlying principles of NMPF’s proposal. USDA’s biggest difference with NMPF was its establishment of a Class I mover for extended shelf-life products, which consists of the average of with an adjustable mover, even as most of the U.S. milk supply would revert to the “higher-of” formula in effect until 2019, as NMPF and its members advocated. NMPF-USDEC Joint Economics team members explain USDA’s recommended decision here.

Members of NMPF’s FMMO task force have reconvened to write comments on the recommended decision, which will be handed in by the Sept. 13 comment deadline for all stakeholders. USDA will review submissions and issue a final decision in November, followed by a producer referendum likely near the end of the year. Any changes will be implemented in early 2025, ending the formal FMMO modernization process.

Even as FMMO consumed team energy, members of the economics team traveled the country in 2024, providing expertise on changing market conditions throughout the year and updates on the FMMO modernization process.

Stephen Cain, senior director of research and economic analysis for NMPF, and Dr. Peter Vitaliano, vice president for economic policy and market research for NMPF, presented updates on the federal order modernization efforts to the NMPF Young Cooperators in February, the Southeast Milk Inc., Leadership Experience (SMILE) in May, and to the NMPF Board of Directors periodically. In August, Cain travelled to Detroit to update Michigan Milk Producers Association on the next steps in the process.

Producers were also updated on current and changing market conditions through 2024. Will Loux, senior vice president of global economic affairs for NMPF and USDEC, presented a domestic and export market outlook to South Dakota Dairy Producers in January and Dairy Farmers of America in July, as well as an update on the state of the dairy industry to the Idaho Milk Processors Association in August.

The economics team also met with the boards of United Dairymen of Arizona, Agri-Mark, Land O’Lakes, and Michigan Milk Producers Association to provide an update on Cooperatives Working Together renewal and modernization efforts. Cain and Dr. Vitaliano also provided outlook presentations for the National Ice Cream Mix Association annual meeting in January and to the American Butter Institute in April. Dr. Vitaliano also gave a butter-specific presentation to the joint American Dairy Products Institute-American Butter Institute annual conference in April.

Amid this backdrop, the dairy economy itself showed signs of improvement. The Dairy Margin Coverage Program, the main federal safety net for U.S. milk producers, saw its fourth highest ever margin in July, at $12.23/cwt, with the all-milk price at $22.80/cwt. End of August dairy and grain futures indicated that the DMC margin would average around $12.25/cwt for all of calendar year 2024.

Much Good, Some Surprises in FMMO Plan, NMPF’s Cain Says

Posted on by Alan Bjerga

Stephen Cain, senior director of economic research and analysis for the National Milk Producers Federation, said NMPF is “very pleased with the recommendation that USDA has come up with” for Federal Milk Marketing Order Modernization. “Fundamentally, USDA agreed with our premise and methodology for all the changes we were asking for,” said Cain in an interview with the National Association of Farm Broadcasters.

 

Economists Find Much to Like in USDA Pricing Plan

Posted on by Theresa Sweeney

USDA’s plan for modernizing the Federal Milk Marketing Order system aligns well with the principles outlined in NMPF’s own proposals, NMPF economists Peter Vitaliano and Stephen Cain said in a Dairy Defined Podcast released today. Still, analysis is ongoing, and NMPF will be suggesting improvements during a public comment period that lasts through mid-September.

“It’s important that we have a national system that helps level the playing field across the country,” said Cain, NMPF’s senior director for economic research and analysis. “We do not want regulation to create winners and losers or incentivize actions that distort the marketplace or market dynamics in any way.

More on NMPF’s federal order efforts can be found on nmpf.org. You can find and subscribe to the Dairy Defined podcast on Apple Podcasts and Spotify under the podcast name “Dairy Defined.”

Media outlets may use clips from the podcast on the condition of attribution to the National Milk Producers Federation.

FMMO Recommendations Build on NMPF Success

Posted on by Theresa Sweeney

USDA’s proposed plan for Federal Milk Marketing Order (FMMO) modernization release July 1 reflected years of painstaking NMPF efforts in crafting a comprehensive plan and building consensus across dairy, leading to recommendations that will set dairy up for success.

The proposal, which is open for comment through August, comes after USDA examined hearing briefs submitted by participants in 2023’s record-long federal order hearing. NMPF again led with its comprehensive approach to improved milk pricing, offering the department detailed proposals that worked to ensure benefits for farms in all regions, of all sizes.

“NMPF is heartened that much of what we proposed after more than two years of policy development, and another year of testimony and explanation, is reflected in USDA’s recommended FMMO modernization plan,” NMPF President and CEO Gregg Doud said in a statement the day the plan was released.

“Crafting an effective milk-pricing system for farmers is complex and requires a careful balance. USDA’s plan acknowledges that complexity and, while not matching our proposal in every detail, looks largely in keeping with the comprehensive approach painstakingly determined by the work of dairy farmers and their cooperatives over the past three years,” Doud said. “We look forward to examining this proposal topic-by-topic, gathering input regarding the various needs of our members nationwide, and adding their insights as this process moves toward a vote of producers.”

Doud elaborated on USDA’s plan, and its relationship to proposals by NMPF and others, in NMPF’s monthly CEO’s Corner column.

The proposal is now in a 60-day comment period. NMPF’s member-led task force on FMMO is meeting July 11 to discuss the plan and offer member input, while the following day NMPF’s Co-op Communicators Committee is discussing publicity and farmer-communications efforts to educate the industry on the proposal. After USDA reviews public comments, a final plan will be put to a vote of producers, likely in the early months of 2025.

Dairy Farmers See Advances in USDA’s FMMO Plan, NMPF’s Bjerga Says

Posted on by Alan Bjerga

Dairy farmers have reasons to be pleased with the draft proposal for Federal Milk Marketing Order modernization, NMPF Executive Vice President Alan Bjerga said in an interview with Dairy Radio Now. That said, the process isn’t complete. Farmers still have a 60-day comment period and a final producer vote before any final proposal is implemented. NMPF is ready to lead, as it has throughout, Bjerga said.

Co-op Leadership Brings FMMO Modernization Success

Posted on by Theresa Sweeney

Well done, co-ops. Your leadership is shaping a better future for dairy.

On Monday, an effort that took more than three years, more than 200 meetings, 49 days of a record-long Federal Order hearing, and countless hours of analysis and discussion were reflected in a recommended USDA plan for Federal Milk Marketing Order modernization that incorporates much of the comprehensive approach to improvements we advocated throughout.

Yes, not every detail is exactly as we would have had it – we always knew that would be the case. And USDA’s plan isn’t set in stone – we take very seriously the comment period we will soon be in and plan a detailed response to this proposal. Our FMMO task force is meeting to discuss the plan next week; even as we speak, our staff and cooperative experts are putting pen to paper to better understand how various parts of the USDA plan will interact to affect dairy farmers and the cooperatives they own, as well as the broader industry.

That’s all to say our work is far from over. But Monday’s decision was arguably the critical milestone in this process. And this industry – led by the member-owners of the nation’s leading dairy cooperatives – has many reasons to be heartened by the improvements USDA has proposed to the nation’s Federal Milk Marketing Order system.

A few notes on what USDA offered, and how it compares to what we’ve advocated.

  • On the “higher of” Class I mover. Noting that dairy farmers have lost roughly $1.3 billion in revenue since the mover was changed in 2019, we fought for a return to the higher-of in the name of fairness and real-time market signals. Processors proposed a different formula, citing its importance to risk management, especially for extended shelf-life milk. Recognizing the need to restore orderly milk marketing, USDA decided to go back to the higher-of, with an accommodation for extended shelf-life milk, thus granting NMPF’s request for the vast majority of U.S. fluid milk. USDA’s solution is, frankly, as innovative as it is fair – a classic case of two sides not getting all that everyone wanted, but everyone getting what they most needed.
  • On make allowances. USDA’s numbers for an adjustment were higher than what NMPF proposed, though not greatly out of line with our analysis. And USDA denied the processors’ request to automatically increase the numbers over the next three years, which NMPF opposed. Agreement was nearly universal that make allowances, which hadn’t been revised since 2000, needed to change. The next step now will be seeking better plant-cost data through mandatory surveys via legislation, a step that’s been included in every significant congressional farm bill plan that’s been proposed.
  • On increasing the Class price skim milk component factors. Again, USDA’s plan takes a direction similar to NMPF’s, though it doesn’t include the automatic update provision we proposed.
  • On the Class I differentials. In many cases, USDA’s county-level calculations matched our own. In many others, the calculations deviated minimally. And in a few others, the differences were significant. Meanwhile, USDA denied a processor proposal to zero out the base differential, which would have significantly reduced every differential in the country and set the Class I differentials to zero at some locations in the West. We will be examining USDA’s methodology to better understand its calculations, reflecting the best data and our members’ input.
  • On removing barrel cheese from the protein price formula. USDA accepted NMPF’s proposal without modification.

As has always been the case, member leadership is what has made this process work for dairy. The conversation is continuing, and the comprehensive, consensus-driven approach that has been our hallmark will also continue.

Once Monday’s proposal is officially published in the Federal Register, we and other stakeholders will have 60 days to submit comments to USDA. A final producer vote is projected for early 2025. Again, thank you to all the cooperative leadership for what has been accomplished so far, and for the good work for dairy that will continue. And with that, happy Independence Day. We’ll be back next week for the second half of an already successful year.

Gregg Doud

President & CEO, NMPF

 

NMPF Statement on USDA’s Recommended FMMO Modernization Plan

Posted on by Rachel Ravencraft

From NMPF President & CEO Gregg Doud:

“Based on our initial reading, NMPF is heartened that much of what we proposed after more than two years of policy development, and another year of testimony and explanation, is reflected in USDA’s recommended Federal Milk Marketing Order modernization plan.  

“Crafting an effective milk-pricing system for farmers is complex and requires a careful balance. USDA’s plan acknowledges that complexity and, while not matching our proposal in every detail, looks largely in keeping with the comprehensive approach painstakingly determined by the work of dairy farmers and their cooperatives over the past three years. We look forward to examining this proposal topic-by-topic, gathering input regarding the various needs of our members nationwide, and adding their insights as this process moves toward a vote of producers.”  

 

NMPF’s Bjerga on H5N1, Farm Bill

Posted on by Alan Bjerga

NMPF Executive Vice President for Communications & Industry Relations Alan Bjerga speaks on RFD-TV about dairy farmer challenges and their broader relationship with agriculture, ranging from H5N1 in dairy cattle to discussions of the 2024 Farm Bill in Washington. Success across all fronts will require communication and collaboration across agricultural sectors, he said. Meanwhile, NMPF is optimistic regarding the future of milk pricing, with a USDA plan on Federal Milk Marketing Order modernization expected within the next few weeks.

https://www.rfdtv.com/from-farm-bill-to-hpai-what-is-dairy-farmer-sentiment-looking-like