National Farmers Supports NMPF Proposal for FMMO Reform

On May 31, National Farmers Organization submitted a letter of support to the Administrator of USDA AMS, addressing overhaul of the Federal Milk Marketing Orders.

National Farmers supports the National Milk Producers Federation’s (NMPF) comprehensive proposal for modernization of the Federal Milk Marketing Order (FMMO) system.

“National Farmers’ dairy leadership team has studied and discussed the NMPF proposal at length and have concluded that its proposal will benefit our producers and represents the best path forward for the U.S. dairy industry,” said National Farmers President Paul Olson. “We believe the changes outlined in that proposal are much needed and long overdue.”

Key points of the proposal include:
• Updating dairy product manufacturing allowances (the “make allowance”) contained in the USDA milk price formulas;
• Discontinuing the use of barrel cheese in the protein component price formula;
• Returning to the “higher of” Class I mover;
• Updating milk component factors for protein, other solids and nonfat solids in the Class III and Class IV skim milk price formulas; and
• Updating the Class I differential price system to reflect changes in the cost of delivering bulk milk to fluid processing plants.

“As a matter of Board policy, NFO does not bloc vote its membership,” Olson said. “Should a call come for a hearing on the NMPF proposal, we will encourage our member farmers to vote in the affirmative.”

Federal milk marketing orders serve as an unbiased source of information for USDA, government entities, and policymakers. The federal system benefits dairy farmers by producing a more stable market than would be possible without the oversight.

“The federal milk order system guarantees an orderly market, improves income for farmers, supervises sales to ensure both farmers and processors are paid fairly, and assures consumers have adequate supplies of quality milk at reasonable prices,” said National Milk Sales Director Dick Byslma.

“Without the federal system, there would be no auditing to assure price and no opportunity to have a system that calculates prices based on class differentials. Milk prices would race to the bottom,” he added.