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Component pricing issues highlight week one of Federal Milk Marketing Order hearing

The first week of the USDA’s hearing on the Federal Milk Marketing Orders is complete, and much of the testimony has been focused on component pricing issues.  

The first week also included formal objections and some criticism of the USDA for not allowing some milk pricing proposals to be considered in the scope of the hearing.  

On Tuesday afternoon, attorney John Vetne for National All Jersey argued his client’s proposal number two can address an identified problem of some milk handlers not paying enough for Class II, III, and IV milk.  “The formula assumes there’s less component in that milk, so Proposal #1 and Proposal #2 would change the formula so that those handlers would pay more.” 

But Vetne says this is a regional issue affecting the Southeast Order and Arizona. “All of the witnesses said it’s immaterial in the MCP (milk component pricing) markets. It is a regional problem for which Proposals #1 and #2 provide a regional solution.” 

USDA informed National All Jersey their regional proposal did not qualify for consideration at the national federal order hearing.  Vetne says USDA lacks imagination with that decision and says Part 1000 of the orders could be amended to make component pricing the nationwide standard. 

The Federal Milk Marketing Order hearing is expected to last several weeks with in-person testimony in Mt. Carmel, Indiana and online farmer testimony on Fridays.