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Stephenson: Watch for USDA to release dairy make allowance study

A University of Wisconsin dairy economist has recently updated research on a portion of the Federal Milk Marketing Orders.  Mark Stephenson with the UW Center for Dairy Profitability tells Brownfield the USDA asked him to update a study he had previously done into what’s called the make allowance, which is a margin for processors who convert milk into the many types of dairy products. “USDA had asked me to update some work that I had done several years ago on the cost of processing in dairy plants, so that’s something that I have been working on and have given them a final report now.”

Stephenson believes his report will become public knowledge before long. “USDA is just trying to think about the release opportunity for that and, you know, how it comes out and becomes available but it will all be part of public discussions.”

Stephenson says there’s nothing to hide, and it’s just a matter of when USDA releases the report.

Some dairy organizations have been seeking to open hearings on the federal orders and offer suggestions to improve transparency and farm gate prices while avoiding the negative producer price differentials experienced during the pandemic.

Stephenson says another part of the federal orders is USDA’s survey of dairy product prices to determine the value of milk.  Every Wednesday, that report comes out with the average prices for butter, Cheddar cheese, nonfat dry milk, and whey products.