December 27, 2021

Dairy Pricing Opportunity Act Introduced

Dairy Pricing Opportunity Act Introduced

By: Sydney Sheffield 

The Dairy Pricing Opportunity Act was recently introduced by Senators Patrick Leahy (D-VT), Kirsten Gillibrand (D-NY), and Susan Collins (R-ME). The bill is designed to direct the United States Department of Agriculture (USDA) to initiate the process of holding Federal Milk Marketing Order (FMMO) hearings within six months to provide an opportunity for producers to have a seat at the table when any potential changes in how Class I milk prices are calculated is discussed. 

“The Dairy Pricing Opportunity Act would help restore some stability to this sector by ensuring that USDA holds public hearings to receive farmers’ input on ways to correct the unintended consequences of a pre-pandemic pricing policy. Our dairy farmers have always worked tirelessly to provide high-quality, nutritious products for Maine people, and we must address the obstacles that threaten to prevent them from carrying on that tradition,” said Collins in a press release. 

Historically, Class I milk was calculated using the “higher of” Class III or Class IV price, plus the appropriate Class I difference. This was changed in the most recent farm bill to an averaging method of Class III and Class IV, plus $0.74. This change, combined with the pandemic, resulted in millions of dollars in losses for farmers. 

Even before the COVID-19 pandemic, dairy farmers faced challenges due to volatile milk prices and competition from non-dairy fake milk products. This has resulted in almost 40,000 lost dairy hers since 2003. The Dairy Pricing Opportunity Act would ease the burden on farmers by allowing reviews of proposals and creating opportunities for hearings on other areas in the dairy industry that need reform. 

This piece of legislation has support from those in the dairy industry. President and CEO of the National Milk Producers Federation (NMPF) Jim Mulhern stated, “Sen. Gillibrand’s legislation, co-sponsored by Sens. Leahy and Collins, adds bipartisan momentum to a range of critical milk pricing discussions that dairy farmers are having through NMPF’s Economic Policy Committee. NMPF is continuing to work with USDA and Congress on how best to remedy deficiencies in the Class I mover formula and fully recoup $750 million in unintended losses felt by farmers of all sizes. NMPF also is leading discussions on a broad range of Federal Milk Marketing Order reform issues important to producers in all regions of the country. We look forward to pursuing policy improvements that will serve all dairy producers more equitably and effectively.”

Similarly, the Northeast Dairy Producers Association (NDPA) commended the bill, saying, “The advancement of The Dairy Pricing Opportunity Act of 2021 is a crucial step forward in addressing the need for systematic change within the current federal milk marketing system. NEDPA thanks U.S. Senator Kirsten Gillibrand for continuing to be a strong advocate and voice for New York’s family dairy farms.” 

Read The Dairy Pricing Opportunity Act here.