Federal Milk Marketing Order Hearing Update: Recap of House Agriculture Committee June 22, 2023 Meeting

 By Leonard Polzin

On June 22, 2023, The U.S. House Agriculture Committee held a meeting to review the current farm bill’s dairy provisions, including the Dairy Margin Coverage (DMC) and the Class I price mover. The hearing featured two panels of witnesses from USDA, dairy cooperatives, processors, and farmers. https://agmoos.com/2022/06/23/from-dmc-to-fmmos-from-price-movers-to-make-allowances-house-ag-hearing-reviews-farm-bill-dairy-provisions/.

Issues Raised in Initial Hearing

There were several issues raised and thoroughly discussed in the initial hearing as detailed below:

• The main issue debated was changing the Class I price mover, that was previously authorized by Congress in the 2018 farm bill. The 2018 change was the result of an agreement between NMPF and IDFA to replace the “higher of” Class III or IV prices with a simple average plus 74 cents. This was intended to be revenue neutral, but the pandemic caused unprecedented price gaps that resulted in potentially significant losses for dairy farmers. Some witnesses advocated for restoring the “higher of” formula or finding another solution to compensate farmers for their losses, while others argued that changing the formula again would create more uncertainty and instability for the industry https://agmoos.com/2022/06/23/from-dmc-to-fmmos-from-price-movers-to-make-allowances-house-ag-hearing-reviews-farm-bill-dairy-provisions/.
• Another issue raised in the hearing was the need for reform or modernization of the FMMO system to address the changing market conditions and consumer preferences https://www.youtube.com/watch?v=GDsirGj8C9k . Some witnesses suggested simplifying the pricing formulas, increasing producer representation, enhancing information sharing, and creating regional or national FMMOs.  Others cautioned that any changes to the system should be carefully evaluated and agreed upon by all stakeholders, as they could have unintended consequences or trade-offs.
• Recent FMMO Reform Developments: Call for Elimination of Submitted Proposals (July 9-15,2023)
  The most recent developments in FMMO reform is that the National Milk Producers Federation (NMPF) sent an email letter to USDA-AMS Administrator Bruce Summers and Deputy Administrator Dana Coale, seeking to eliminate some submitted proposals from hearing consideration.  https://www.agproud.com/articles/57968-weekly-digest-nmpf-urges-usda-to-reject-several-fmmo-proposals-from-hearing.

The reasoning was that, of the proposals submitted, five were outside the scope of the USDA’s request for a hearing to consider national pricing issues.  According to NMPF, the proposals were either regionally directed, did not address FMMO pricing provisions or sought to change definitions of how the FMMO system functions. Specifically, NMPF cited proposals submitted by Lamers Dairy, the Milk Innovation Group (MIG), Edge Cooperative, the American Farm Bureau Federation (AFBF) and National All-Jersey. The complete list of petitions and revisions can be referenced here: https://www.ams.usda.gov/rules-regulations/moa/dairy/petitions.