Since the 1930s, the USDA has implemented a minimum pricing system for dairy farmers through the Federal Milk Marketing Orders (FMMO) program. However, the pricing formulas have not been updated since 2000, causing dairy farmers to face increasing costs for fuel, feed, and medicine. Processors are also experiencing increased expenses.
The COVID-19 pandemic has prompted an examination of the FMMO program, as proposed by the National Milk Producers Federation (NMPF), which has conducted research and dialogues with its 28,000 members. The NMPF's petition seeks to update the program by increasing the prices dairy farmers are guaranteed through changes to transportation and other cost formulas.
Meanwhile, dairy processors represented by the International Dairy Foods Association (IDFA) demand updates to the manufacturing cost allowances last revised in 2006. Although both parties want to modernize the FMMO, they disagree on the details.
June 6, 2023