It seems like no one is happy with the current milk pricing program but there may be some change on the horizon. Jim Mulhern, President and CEO of National Milk Producers Federation (NMPF) was recently part of a panel session at CheeseCon in Madison. The hot topic that day was make allowances and potentially changing the way milk prices are calculated.
For the last 18 months the NMPF has taken part in a deep dive into the federal milk marketing program. It has been 23 years since there has been any major corrections to the program and as Jim points out, the dairy industry has seen very significant changes in that time. Jim says they are in the final stages of creating a proposal to modernize the payment plan. Their proposal will be submitted to the USDA later this month with a request for a hearing on the matter.
While the current federal milk marketing order program has detractors, Jim says that having the framework that it provides is necessary to help protect producer interests while also ensuring consumers have an adequate supply of fluid milk. The proposed changes will affect all classes of milk and while they are not small changes, Jim says they also are not a total overhaul of the current system.
While about two thirds of the nation’s milk is represented by NMPF through cooperative membership, Jim says that the program was created with input from state and regional dairy groups and the American Farm Bureau in order to build consensus on what changes were needed. However, one point of contention between farmers and dairy processors in this plan surrounds the make allowance that dairy processors factor into their budgets and want to see increased. An increase in make allowance would result in a decrease in pay for farmers. However, Jim says the proposal NMPF has put together has changes in other areas that would increase pay price for farmers and the organization does not support changes to the make allowance without the other changes that will offset that cost for farmers.
While this will not be a fast process, Jim is confident it will get done and farmers will have a voice in these changes. With a hearing that will hopefully take place in early fall of this year, the USDA could have a recommended decision late this year. At that point dairy farmers will be able to vote to accept or reject the changes before they take effect.
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