FMMO hearings begin 

By: Sydney Sheffield 

The Federal Milk Marketing Order (FMMO) Pricing Formula hearings, held by the United States Department of Agriculture (USDA) began last month. The USDA will hold a hearing on proposals to amend the pricing formulas in the 11 FMMOs. Each FMMO includes a classified price plan, a system of minimum prices, terms of the order, and provisions for administering the order. 

FMMOs establish certain provisions under which dairy processors purchase fresh milk from dairy farmers supplying a marketing area. In Federal order provisions, dairy processors are referred to as handlers, and dairy farmers are known as producers. A marketing area is generally defined as a geographic area where handlers compete for packaged fluid milk sales, although other factors may be considered when determining the boundaries of a marketing area.  Federal orders serve to maintain stable marketing relationships for all handlers and producers supplying marketing areas, thus facilitating the complex process of marketing fresh milk.

The Agricultural Marketing Agreement Act authorizes FMMOs and USDA amends and establishes them through a hearing process overseen by the Secretary of Agriculture. The hearing process enables the dairy industry to submit proposals and evidence to support the establishment of and amendments to Federal order provisions. This process allows the Federal order provisions to meet the changing needs of the dairy industry. The establishment and amendments to a federal order become effective only after approval by producers via a referendum process.

Many in the dairy industry have testified or plan to throughout the process. “Thanks to the tireless efforts of dairy farmers and their cooperatives, this industry is poised for progress as Federal Milk Marketing Order modernization is now in sight,” the National Milk Producers Federation (NMPF) President and CEO Jim Mulhern said. “NMPF’s comprehensive proposal for improvements to the system forms the basis of this hearing, and through our members’ depth of expertise and an unmatched team of dairy farmers and cooperative analysts, we are prepared to advance our industry’s need for these updates.”

The International Dairy Foods Association (IDFA) Chief Economist Mike Brown said "The IDFA and our members are fully prepared to participate in the Federal Order hearing, where we plan to provide compelling, fact-based arguments supporting IDFA's two proposals that were crafted in the best interest of the full dairy supply chain. We are grateful that both of IDFA's proposals were accepted by USDA as part of the hearing. We're pleased to see the department move forward with the Federal Order hearing, and we fully expect UDSA will ensure all voices are heard, all proposals and presentations are fact based, and the staff at USDA are working in the best interest of the full dairy supply chain rather than just one set of constituents.”

The American Farm Bureau Federation submitted a proposal to the USDA. Check it out here.