The effort to reform the outdated milk pricing model is moving forward. Today’s comment period deadline is signaling progress. Chuck Nicholson, an associate professor and dairy economist at UW-Madison, joins us in-studio to talk about where we stand on the timeline for the Federal Milk Marketing Order reform process.
The U.S. Department of Agriculture’s proposed Federal Milk Marketing Order changes include two key provisions:
1) Increasing make allowances (a way to account for the cost to transform milk into dairy products). This would result in lower returns for a farmer’s milk, Nicholson explains.
2) Increasing Class 1 differentials (an additional cost a processor will pay for milk used for beverage). This would result in about $1.20 more per hundredweight in Wisconsin, he says.
Nicholson notes that these are offsetting changes — one won’t look good on a producer milk check and one will.
Wisconsin is a Class III producing state, meaning most of the milk goes to make cheese. Overall, the sentiment is that USDA’s proposed changes won’t directly benefit Wisconsin producers. Nicholson says the forecasts show an updated milk pricing system would result in lower prices for Wisconsin dairy farmers over time. But it’s likely that producers and cooperatives will still rather retain the FMMO system instead of get rid of it completely. Getting rid of it completely would be even worse in terms of prices, he says.
Nicholson will be speaking at an FMMO Workshop held in partnership with Professional Dairy Producers on Sep. 18 in Madison. This hybrid event offers in-person, livestream, and on-demand options. Register today so you don’t miss your opportunity to engage with leading dairy experts, get your questions answered, and prepare your business to navigate potential milk pricing and regulation shifts: https://pdpw.org/programs/FMMO-24/details
