Minnesota Milk Producers push back against raising Class 1 milk prices in the Federal Milk Marketing Order.
Other dairy marketing groups believe that it could bolster the industry, but Minnesota Producers think it will backfire and hurt milk producers and befit only certain areas of the country.
Producers also say that a temporary price hike could hurt demand at the grocery store.
“We would see less demand for our product; so whether its processors or its consumers, all of a sudden, you are going to see higher prices at the processor level or higher prices on the store shelves, so its going to be easier, better, and less market distorting to just give direct payments,” Lucas Sjostrom, with the Minnesota Milk Producers Association, said. “We all admit farmers need cash, but if we start playing with Class 1 we are going to have some areas of the country winning more than others, and we will have some people just sending milk to places that don’t need it right now.”
Sjostrom also says that it would affect the liquidity of the market and ruin trust in how milk futures are priced in Chicago.