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Federal order updates take a step forward


“The NMPF board unanimously passed a federal order modernization plan yesterday that we can take to USDA and hopefully get passed,” stated Randy Mooney on Tuesday, October 25, 2022. “Dairy is positioned to be a trusted anchor in an uncertain world,” continued the chairman of the board of directors for the National Milk Producers Federation (NMPF).


“Together we can seize opportunities to feed the world. Our product is one of the most nutritionally valuable foods available,” Mooney shared with the 750 attendees at the annual gathering of NMPF, the National Dairy Promotion and Research Board, and the United Dairy Industry Association. “We can create vibrant rural communities that keep America strong by helping to retain local schools, build energy independence, preserve the environments, and ensure food security for everyone,” continued the dairyman from Rogersville, Mo.


Specific to federal order reform, Jim Mulhern explained that a great deal of discussion took place in order to arrive at this plan. “We had more than 100 meetings on federal order modernization over the past year,” shared the NMPF President and CEO. He, too, echoed Mooney’s comments at the gathering in Aurora, Colo. “I am happy to report that our board of directors unanimously approved a plan to update Federal Milk Marketing Orders. We plan to submit our plan to USDA early next year,” said Mulhern.


Specifics on key actions

Following Monday’s discussion and unanimous vote, the NMPF board endorsed the following concepts as they relate to modernizing federal milk marketing orders:

  • Return to the “higher of” Class I mover.

  • Discontinue including barrel cheese in the protein component price formula.

  • Extend the current 30-day reporting limit to 45 days on forward-priced sales on nonfat dry milk and dry whey to capture more exports sales in the USDA product price reporting.

  • Update milk component factors for protein, other solids, and nonfat solids in the Class III and Class IV skim milk price formulas.

  • Develop a process to ensure make-allowances are reviewed more frequently through legislation, directing USDA to conduct mandatory plant-cost studies every two years.

  • Update dairy product manufacturing allowances contained in the USDA milk price formulas.

Later, during questions from the floor, NMPF leaders also shared that more work is being done on Class I differentials. Once that study is completed on the Class I price surface, it would be reviewed by the NMPF board of directors before being included in the proposal submitted to USDA.


“We have made tremendous progress and are moving forward with the strong level of consensus in the producer community that we will need to achieve our goals of modernization,” said Mulhern. He made that statement reflecting upon the message that came from USDA Secretary Tom Vilsack just one year earlier: “Vilsack urges FMMO consensus.”


“We’ve had many challenging conversations that were important to getting to a national consensus because of the regional nature of federal milk orders. But the give and take that’s needed to get anything done will place the entire industry on a sounder footing, creating a lasting benefit for all,” shared Mulhern of the work NMPF has done on this important matter. Overall, the member cooperatives that belong to NMPF produce more than two-thirds of the nation’s milk. That’s the background and foundation for the vote as it relates to the federal order discussion.


Corey Geiger

October 27, 2022


hoards.com



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