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Farm Bureau calls for fair milk pricing

The American Farm Bureau Federation is requesting USDA make updates to the Federal Milk Marketing Order to better protect farmers from financial hardship.

President Zippy Duvall is asking Ag Secretary Vilsack to reject proposals from the International Dairy Foods Association and Wisconsin Cheese Makers Association to only increase make allowances, saying it would be devastating to dairy farmers.

Make allowances are used in calculations by dairy processors to determine how much to pay for milk.

The call for a formal review of the system came from state policy requests by several states including the Michigan Farm Bureau.   Senior Industry Specialist Ernie Birchmeier tells Brownfield…

“Many dairy farmers and dairy groups are calling for a true study to determine what that make allowance should be so that it’s fairly accessed to dairy farmers, but at the same time the dairy processors aren’t overcharging.”.

Farm Bureau cites 2021 USDA milk cost of production estimates which finds dairy farmers on average lose $6.72 per hundredweight of milk produced and the loss for dairy farms with less than 50 cows was even greater, at $21.58 per hundredweight.

“The longer we go, the more it costs dairy farmers in terms of pay price, ultimately those folks need to make an income, need to make money, need to make a profit to stay in business,” he says.

Birchmeier says the organization is also asking for adjustments to the Class I and II skim milk price formulas, updates to the Class I and II differentials, and a return of the Class I base price formula to the “higher-of” the Class III or IV formula.