Federal Milk Marketing Order Reform

Issue Overview

The U.S. dairy industry is changing rapidly, from consolidation among farmers, cooperatives and processors, to shifts in consumer preferences to a broader reach in global markets. The COVID-19 pandemic highlighted the challenges with volatile milk prices and outdated milk pricing and pooling provisions. How should federal dairy policy and milk pricing provisions be improved to keep pace with these changes? If dairy policy is to evolve, dairy farmers need to be involved.

In January 2022, voting delegates to the American Farm Bureau Federation’s 103rd Annual Convention recommended to the AFBF board of directors that AFBF continue the Farm Bureau- and producer-led Dairy Working Group to explore options and additional recommendations for strengthening the dairy industry through the new farm bill and modernizing the current Federal Milk Marketing Order (FMMO) system through a federal milk marketing order hearing.

In October of 2022, representatives from over 180 farms, cooperatives, processors and other industry organizations from over 35 states joined the American Farm Bureau Federation in Kansas City for a successful first-of-its kind industry-wide Federal Milk Marketing Order (FMMO) Forum. At that meeting consensus was found across the industry and especially at the farm level—on a wide range of issues, including switching back to the “higher-of” Class I mover and the need for any make allowance changes to be based on mandatory and audited surveys of dairy processors.

AFBF’s groundwork has since led to action by USDA to hold the first national FMMO hearing in over a decade. On August 23, 2023, in Carmel, Indiana, the USDA began hearing testimony on 21 accepted industry proposals related to milk price formulas, giving farmers and stakeholders the chance to testify in-person. USDA included four of AFBF’s nine proposals in the scope of the hearing and we support five additional included proposals made by other organizations. Throughout the hearing, which ended January 30, 2024, AFBF was elbow-deep in analyzing proposals and ensuring that our members’ voices were represented. Many steps remain in the FMMO amendment process before changes will be voted on by dairy farmers across the nation, and AFBF will continue to be at the forefront of representing the interest of dairy farmers across the nation.