The United States Department of Agriculture (USDA) is expected to release its recommendations for the Federal Milk Marketing Order (FMMO) reforms within the next couple of weeks. Following this, a vote on the proposed changes is tentatively expected for this fall or early winter. It is crucial for producers to stay informed about these developments and understand how the proposed changes may impact them.
USDA’s FMMO Post-Hearing Timeline
The United States Department of Agriculture (USDA) concluded the Federal Milk Marketing Order (FMMO) hearing, an event aimed at modernizing the FMMO framework. Over 49 days, the USDA gathered around 12,000 pages of testimony, reflecting diverse viewpoints on the necessary reforms in the dairy industry’s regulatory landscape.
Hearing Structure and Proposals
The FMMO hearing was organized around five specific proposals, mainly addressing the revision of milk pricing formulas. The first three proposals focused on the manufacturing prices for Class III and Class IV milk. The remaining proposals addressed Class I milk issues, including the Class I mover and differential. Despite varying interests, the hope is a general consensus that the USDA’s final decisions would aim to balance major stakeholders’ concerns, leading to market improvements.
Historical Context and Need for Reform
For over two decades, federal order pricing formulas have maintained a consistent structure, despite significant shifts in the dairy industry. These formulas are now considered ‘outdated’, failing to reflect the industry’s current dynamics and future direction. The proposed reforms aim to update these pricing formulas to align with contemporary industry conditions and anticipated trends.
Concerns Over Class I Mover
A major concern discussed during the hearings was the financial impact of the current Class I mover on dairy producers. Although there was a mostly unanimous call for adjustment, the proposed solutions varied. Proponents for dairy producers advocated for a return to a more beneficial pricing mechanism, emphasizing the necessity of a model that supports effective risk management strategies for Class I fluid milk.
Stakeholder Perspectives and USDA’s Role
The modernization process requires the USDA to navigate the interests of two key industry groups: producers and processors. It is ultimately the dairy farmers who will decide on the adoption of federal orders. This underscores the USDA’s responsibility to develop a regulatory framework that supports all dairy industry stakeholders.
Timeline of Events for the Federal Order Reform Hearing Process
The formal process started with the submission of the initial proposal that resulted in the following course of actions. Here is a brief snapshot of events in the hearing process.
| Event | Date | Description |
|---|---|---|
| Hearing Announcement | July 2023 | The hearing was officially announced. |
| Hearing Start | August 2023 | The beginning of the hearing process. |
| Hearing Conclusion | End of January 2024 | The hearing process wrapped up. |
| Briefs Deadline | April 1, 2024 | Deadline for parties to submit their briefs, which are detailed summations of their arguments based on the 12,000-word hearing record. |
| USDA Recommended Decision | Beginning of July 2024 | The USDA will issue a recommended decision, drawing on the submitted briefs and necessary elements of the hearing record to support their final decision. |
| Briefs Deadline | April 1, 2024 | Deadline for parties to submit their briefs, which are detailed summations of their arguments based on the 12,000-word hearing record. |
| USDA Recommended Decision | Beginning of July 2024 | The USDA will issue a recommended decision, drawing on the submitted briefs and necessary elements of the hearing record. This marks the first insight into the USDA’s stance and is anticipated to closely resemble the final decision. |
The USDA hearing process has experienced considerable involvement from the agricultural community, particularly farmers and cooperatives. Over 30 cooperative experts and more than 30 farmers have actively participated, providing testimony. This number does not include the comprehensive support and contributions towards proposal formulation by task forces, nor does it consider the efforts of other organizations. Such participation highlights the extensive engagement in the process. The FMMO hearing emphasized the complex interdependencies within the dairy industry, highlighting the need for regulatory reforms that accommodate the diverse needs of producers, processors, and other participants.
