It has been nearly two months since the USDA released its recommendations for modernizing the Federal Milk Marketing Order. Economists say it is a tough job and more challenges could lie ahead.
“I do think one of the challenges that USDA had to address was make-allowances. We haven’t updated it in 24 years. Clearly, they’re out of date, but when you change the make allowance, it is a direct transfer of money from dairy producers to the processors. Again, it’s a zero-sum game where there’s only so much money, and either you get it, or I get it, as a dairy producer and a processor. “There were proposals, there were USDA-commissioned price studies, and USDA didn’t go the full extent of what the economics would say. And in this case, I would say they had to make a political decision and did increase them, but not as much as what all of the studies had to say,” said Erica Maedke, vice president of insights at Ever.Ag.
Dairy groups like the National Milk Producers Federation have applauded the proposals, saying they align with their own ideas. Economists there say it is important to have a national system that levels the playing fields across the country. They also warn they do not want to create a system of winners and losers.
Comments are open for USDA’s proposed changes to the Federal Milk Marketing Order. Feedback can be made in the Federal Register until September 13th. The final rule is expected this fall, and producers will get to vote on it.
