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AFBF releases milk program recommendations

by American Farm Bureau Federation

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The American Farm Bureau Federation released a proposal for the future of U.S. milk-pricing provisions and marketing-order reform on Oct. 21. The recommendations aim to bring more democracy and a more equitable program for all dairy farmers.

Although federal milk marketing orders (FMMOs) have been a pillar of the dairy industry for more than 80 years, the program has not undergone substantial change in nearly two decades. A working group consisting of Farm Bureau grassroots leaders and other contributors from the Farm Bureau family prepared the report after broad consultation with industry and academia.

The Farm Bureau Federal Milk Marketing Order Working Group recommendations are contained in the report “Priorities, Principles and Policy Considerations for FMMO Reform.”

Key recommendations would:

• Give every dairy farmer a voice by eliminating the ability of co-ops to vote on behalf of member-producers on changes to federal milk marketing orders (bloc voting);

• Improve risk sharing across the supply chain in the product pricing formulas by adjusting the “make allowance” (a fixed deduction or credit for processing milk into finished dairy products) to be variable on a commodity-by-commodity basis;

• Collect more robust pricing information by significantly expanding the Agriculture Department’s mandatory price reporting survey; and

• Simplify milk pricing rules in the Southeast by aligning the qualifying criteria for pooling and eliminating transportation subsidies.

Farm Bureau leaders will convene in January at the AFBF Convention to consider and vote on these priorities and policy recommendations. Based on the outcome, Farm Bureau staff will work with stakeholders in the dairy industry and policymakers to advance the recommendations.

The working group was formed in January 2019 when AFBF’s voting delegates recommended the formation of a dairy task force to review methods to restructure and modernize the current FMMO system.

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