Urgent plea for fair milk pricing

USAgNet - 02/23/2024

The American Farm Bureau Federation and National Farmers Union have reached out to Secretary Tom Vilsack, seeking urgent revisions in milk pricing regulations. This collaborative effort underscores a pressing need for stability in the dairy sector, currently marred by inadequate pricing mechanisms that compromise farmer incomes.

Historically, milk was priced under a formula that favored dairy farmers, offering them the higher value between Class III or IV milk prices. This method was altered by the 2018 farm bill, introducing a formula that, while well-meaning, inadvertently diminished dairy farmers' earnings.

The change to an average-based calculation, plus a static increment, failed to reflect market realities, thereby not being revenue-neutral as anticipated.

This issue gained prominence during discussions at the Federal Milk Marketing Forum and was further highlighted at the National Farmers Union Convention. It has become evident that the current pricing formula does not adequately serve the dairy community's interests, leading to calls for a swift return to the previous, more beneficial scheme.

The appeal for revising the Class I mover formula to its former structure is backed by substantial testimony and records from USDA hearings, alongside historical rulemaking precedents. By reinstating the "higher-off" pricing mechanism, farm leaders believe that dairy farmers can regain a fair chance at sustaining their operations amidst fluctuating market conditions.

The urgent request for an interim final decision reflects a collective aspiration for a dairy market that supports its foundational players, ensuring that they receive equitable compensation for their crucial contributions to the food supply chain.

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