Dairy leaders unanimously endorse NMPF milk-pricing proposal

Next step is submitting the proposal to USDA as the basis for a federal order hearing.

Krissa Welshans, Livestock Editor

March 8, 2023

3 Min Read
iStock/ GettyImages

The National Milk Producers Federation’s (NMPF) Board of Directors unanimously endorsed a proposal to modernize the Federal Milk Marketing Order (FMMO) system at its March meeting, a milestone that caps more than two years of discussion and more than 130 meetings on different aspects of the proposal. 

The plan to reinvigorate the FMMO system that guides milk pricing reflects an industry that’s evolved significantly since the last comprehensive revamp in 2000. It’s a proposal all dairy can get behind, said Randy Mooney, chairman of NMPF’s board of directors and a dairy farmer from Rogersville, Mo.

“After gathering dairy’s best minds and consulting with partners across the industry, today we are moving forward with a comprehensive FMMO proposal the entire industry can get behind,” Mooney said. “We look forward to leading a thorough, deliberative process as we submit this proposal to USDA and partner with our allies to modernize milk pricing in ways that serve dairy farmers and the entire industry.”

The board reviewed a package of changes initially developed and proposed by a task force of NMPF cooperative experts and later approved by the organization’s Economic Policy Committee.

Proposed changes to the FMMO system include:

  • Returning to the “higher of” Class I mover;

  • Discontinuing the use of barrel cheese in the protein component price formula;

  • Extending the current 30-day reporting limit to 45 days on forward priced sales on nonfat dry milk and dry whey to capture more exports sales in the USDA product price reporting;

  • Updating milk component factors for protein, other solids and nonfat solids in the Class III and Class IV skim milk price formulas;

  • Developing a process to ensure make-allowances are reviewed more frequently through legislation directing USDA to conduct mandatory plant-cost studies every two years;

  • Updating dairy product manufacturing allowances contained in the USDA 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.

NMPF is confident the adopted changes reflect the industry’s evolution while benefiting the farmers who form the bedrock of U.S. dairy. With the board’s approval, the next step is to move toward submitting the proposal to USDA as the basis for a federal order hearing while continuing conversations with other dairy stakeholder partners.

NMPF President and CEO Jim Mulhern said the organization stands ready to assist farmers, the dairy industry and federal officials in any way it can as the process unfolds.

“We believe in a better future for this industry, and this proposal will help build that future,” he said.

House Agriculture Committee Chairman Glenn “GT” Thompson, R-Pa., spoke on the farm bill expected in 2023 and other federal issues. NMPF said it looks forward to working closely with Chairman Thompson, a staunch ally of dairy farmers, to complete work on the 2023 farm bill and other matters.

NMPF’s board welcomed new directors -- Jacob Larson of Southeast Milk Inc., and Michael Lichte of Dairy Farmers of America – and released its annual report, highlighting the activities and accomplishments of the past year. 

Board members at the meeting also discussed FDA’s proposal on plant-based beverage labeling; industry leadership in animal care, environmental stewardship, and workforce development; U.S. dairy export promotion; and potential farm-bill priorities.



About the Author(s)

Krissa Welshans

Livestock Editor

Krissa Welshans grew up on a crop farm and cow-calf operation in Marlette, Michigan. Welshans earned a bachelor’s degree in animal science from Michigan State University and master’s degree in public policy from New England College. She and her husband Brock run a show cattle operation in Henrietta, Texas, where they reside with their son, Wynn.

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