American Farm Bureau Federation Federal Milk Marketing Order Work Group Update
By Scott Mason, Coos County Farm Bureau
June is National Dairy Month and what better time to begin a discussion on amending the Federal Milk Marketing Orders (FMMO). American Farm Bureau Federation has put together a work group to study the FMMO to suggest potential policy changes. There are three dairy farmers from each of the four AFBF regions of the country serving on this committee.
The question before us: Do nothing, tinker with the system a bit, or build a new system of price discovery.
Currently less than 10% of milk solids are used to price all of the milk. Most milk products do not qualify to be used in the pricing formula, especially the value-added products. Is there a better price discovery system? A no vote on an amendment to a FMMO does away with the federal order. Processors are calling for larger make allowances. There are many dairymen calling for some type of a supply management system. Are there too many classes of milk? Has America become the balancing plant for the world’s milk supply? European Union price is up and ours is down after they did away with supply management. We supply China with 14% of their dairy needs, but only 5% of their total dairy value. Do farmers and processors share price risk?
We will be meeting through conference calls throughout the summer to look at these issues and others impacting the Federal Orders. The NHFB Dairy Committee will be meeting to discuss the issue of FMMO as well. I plan to reach out to the other New England Dairy Committees for similar conversations. You can follow our progress on the AFBF website: AFBF Federal Milk Marketing Order Reform Overview – Latest research from AFBF
The work group will get back together in September to write a white paper for the AFBF board and policy discussion.