5) Class I differentials: Update the Class I differential values to reflect the increased cost of servicing the Class I market. The county-specific Class I differentials are specified in the decision.

At least a few of these proposed changes also have been incorporated into the House version of the farm bill, which includes chancing the base formulate for Class I skim milk to the “higher of” price instead of the average price.

The proposed rule will be available for comment for 60 days once it is published.

National Milk Producers Federation President and CEO Gregg Doud said in a news release Monday, “Based on our initial reading, NMPF is heartened that much of what we proposed after more than two years of policy development, and another year of testimony and explanation, is reflected in USDA’s recommended Federal Milk Marketing Order modernization plan.”

“Crafting an effective milk-pricing system for farmers is complex and requires a careful balance,” Doud said.

“USDA’s plan acknowledges that complexity and, while not matching our proposal in every detail, looks largely in keeping with the comprehensive approach painstakingly determined by the work of dairy farmers and their cooperatives over the past three years. We look forward to examining this proposal topic-by-topic, gathering input regarding the various needs of our members nationwide, and adding their insights as this process moves toward a vote of producers.”

International Dairy Foods Association Chief Economist Mike Brown said, “We are still reviewing USDA’s recommended decision, but our first impression is that there are aspects of the proposal that are responsive to the facts and data presented at the hearing by IDFA and our members which offer a path toward balanced growth across the dairy supply chain.”

“We were disappointed that the recommended decision would revert the Class I mover to the ‘higher of’ which will make it nearly impossible for non-ESL (extended shelf life) fluid milk processors and their customers to continue to use risk management tools in their business relationships,” Brown said.

NMPF represents dairy farmers and co-ops while IDFA represents dairy processors.

-USDA Agricultural Marketing Service — Milk in the Northeast and Other Marketing Areas; Proposed Amendments to Marketing Agreements and Orders (draft): Proposed rule


-USDA Issues Recommended Decision Proposing Amendments to all Eleven Federal Milk Marketing Orders https://www.ams.usda.gov/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

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