The American Farm Bureau Federation (AFBF) was joined by representatives of the National Milk Producers Federation (NMPF), dairy cooperatives, processors, state dairy associations and dairy farmers from across the country for a successful first-of-its-kind industry-wide Federal Milk Marketing Order (FMMO) Forum.
The three-day event, held in October, provided a platform for farmers’ voices to be heard while also answering the call from U.S. Secretary of Agriculture Tom Vilsack to bring the dairy producer community together to discuss FMMO modernization.
Discussions at the forum focused on class price formulas and de-pooling, among other topics.
“We support the federal milk marketing order (FMMO) system as key to fair market-based farmer milk pricing and recognize the importance of periodically updating the program to reflect changes in the dynamic U.S. dairy industry,” AFBF and NMPF said in a joint statement. “With the last major update to the FMMO system occurring in 2000, we believe it is time to consider improvements that better reflect today’s milk markets.”
Dairy farmers and agricultural organizations have been calling for modernization and changes to the FMMO for quite some time.
“In addition, the pandemic-related market disruptions of 2020 also highlighted the need to modernize the program so that it can better mitigate the impacts on producers of disruptions in milk pricing such as occurred then,” the groups said. “At that time, a combination of federal order price formulas, temporary market imbalances, and sudden demand disruptions created disorderly marketing of milk, to the detriment of producers.”
Groups, including AFBF, say the current system is outdated, confusing and leaves dairy farmers without a true voice in the milk marketing process.
“We anticipate the prospect of a hearing conducted by USDA in 2023 that could address FMMO price formulas, including all four classes, as well as the Class I price surface. An amended pricing system should improve price discovery, improve the clarity of the program, continue to support timely payments to producers, and reduce price incentives to de-pool milk,” according to the groups’ statement. “We are encouraged by the healthy discussion at this week’s Federal Milk Marketing Order Forum and look forward to continuing the discussion about promoting a healthy dairy industry through modernization of federal order pricing.”
Organizations participating in the event and joint statement with AFBF and NMPF included: American Dairy Coalition, National Farmers Organization, National All-Jersey, Georgia Milk Producers, Indiana Dairy Producers, Kentucky Dairy Development Council, Missouri Dairy, Dairy Producers of New Mexico, Ohio Dairy Producers Association and Virginia State Dairymen’s Association.
Learn more about the Forum here.