Dairy farmers will vote in the weeks ahead on a package of milk marketing reforms that includes a higher price for fresh milk destined for table consumption, said the USDA on Tuesday. The Agricultural Marketing Service issued its so-called final decision, opening the way for the farmer referendum, after a 60-day comment period and a final review of the proposed amendments.
A two-thirds majority will be needed to approve the changes in the federal milk marketing order system, which dates from 1937. There are 11 regions with marketing orders that cover most but not all 50 states and three-fourths of U.S. milk production. The USDA will mail ballots to independent milk producers and dairy cooperatives. Ballots must be post-marked by Dec. 31 and received by USDA by Jan. 15, 2025, to be counted.
The proposal would change the formula for calculating the price that processors pay to farmers for Class I milk sold in grocery stores, potentially worth $800 million a year to producers. The formula would use the higher of the Class III or Class IV prices plus a differential for Class I production. At present, the formula uses an average of the prices. The marketing system has four classes of milk; Class I for table use; Class II for making soft products such as yogurt and ice cream; Class III for making hard cheeses; and Class IV for making butter and dry milk.
“The ‘higher of’ Class I mover was in place for nearly two decades prior to it being modified in the last farm bill, and despite the best of intentions, the current formula has not performed as intended and has cost dairy farmers over a billion dollars nationwide,” said New York Sen. Kirsten Gillibrand, a member of the Senate Agriculture Committee.
Other proposed changes would increase the amount of protein in Class III and IV milk; remove 500-pound barrel cheese prices from the formula for the monthly average cheese price; increase the estimated costs to producers for making cheese, butter, nonfat dry milk, and dry whey; and introduce location-specific Class I differentials to reflect current marketing conditions.
Public webinars will be held on Nov. 19, 21, and 25 to describe the amendments and the referendum process, said the USDA.
The final decision will be published soon in the Federal Register, said the USDA. A 388-page pre-publication version was available here.