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Farm Bureau releases milk pricing reform report

Working group took a year to examine system and develop recommendations.

The American Farm Bureau Federation (AFBF) released its final report on priorities for milk pricing reform, calling for more democracy and a more equitable program for dairy farmers.

Among AFBF’s priorities is amending the Agricultural Marketing Agreement Act to give dairy farmers an opportunity to directly vote on Federal Milk Marketing Order (FMMO) issues. Currently, only dairy farmers who are independent and not members of cooperatives may cast individual ballots. Cooperatives may allow their members to vote independently but then lose their ability to bloc vote on behalf of their non-participating members.

AFBF supports modified bloc voting, which would allow co-op members to vote independently and confidentially while allowing cooperatives to cast ballots for farmers who choose not to cast an individual ballot.

The AFBF Federal Milk Marketing Order Working Group, consisting of grassroot dairy farmer members, examined the system over the course of a year and developed recommendations to modernize the current FMMO system. AFBF delegates voted to approve the group’s proposals.

“I appreciate all the work our members have done to give individual farmers a stronger voice in the milk pricing and pooling regulations,” AFBF president Zippy Duvall said. “Farm Bureau has been outspoken on the disparities in the beef and hog markets, and we are just as concerned about the large imbalances in the pricing and pooling of milk, which ultimately cost dairy farmers hundreds of millions of dollars.”

He continued, “Wild price swings during the COVID-19 pandemic have highlighted how important fair systems are to the well-being of America’s farmers and ranchers. By giving dairy farmers a seat at the table, we can begin addressing the challenges of the current FMMO system and work toward a more equitable compensation system for the hardworking men and women in the dairy industry.”

Although FMMOs have been a pillar of the dairy industry for more than 80 years, outside of the 2018 farm bill, the program has not undergone substantial change in almost two decades.

AFBF chief economist Dr. John Newton said, “COVID-19 has resulted in unprecedented volatility in agricultural markets, especially milk and dairy commodity prices. The price volatility, a record-large spread between prices for the various milk classes, mass de-pooling and record-large milk check deductions take money out of farmers’ pockets at a time when they desperately need it. Moreover, it highlights the urgent need for dairy farmers and the industry to collectively consider ways to modernize the FMMO system and improve prices paid to farmers.”  

Other recommendations in the final report include expanding price discovery and examining alternative ways to price fluid milk and improve risk sharing between farmers and processors.  

To read a summary of the recommendations, click here.

TAGS: Policy
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