By John Holevoet
Director of government affairs

Edge Dairy Farmer Cooperative, together with several other Midwestern dairy groups, has been advocating for a change in milk pricing to help minimize the future risk of negative Producer Price Differentials (PPDs). At the same time, these groups continue to meet as part of a Federal Milk Marketing Orders (FMMOs) taskforce to discuss other opportunities to improve milk pricing transparency and the existing orders. 

National Milk Producers Federation (NMPF) put forward a plan earlier this year to change the Class I mover. In response, Edge and others called for a different solution, which we named Class III Plus. This plan wouldeliminate advanced pricing and would tie the Class I price to the Class III price plus an adjuster based on real-world market data. In the months since we announced Class III Plus, NMPF has not moved forward with its request for a hearing on the Class I mover. Instead, the organization has shifted focus to the possibility of additional federal aid for those farms adversely impacted by negative PPDs and the market volatility that caused them. 

The chance of a request for an FMMO hearing has diminished in the near term, but there are several issues besides the Class I mover that could ultimately give rise to a hearing. For example, processors have wanted to address out-of-date make allowances for some time. Still, Edge has never been in favor of rushing into a hearing. 

There are legitimate concerns about the orders that should be addressed. Most of these predate COVID-19, although the pandemic highlighted the need for change in some cases. However, a hearing is a long process with an unknown outcome. Also, having a hearing always comes with the risk that the orders might not survive the vote over any proposed changes. For this reason, we should never take the possibility of an FMMO hearing lightly. 

Edge is hoping that the FMMO taskforce will have wrapped up its fact-finding and idea-generating work by the end of this year. The information gathered from this process will inform decisions by the Edge board of directors regarding how to proceed on order reform proposals. From there, the co-op will work to build consensus with dairy farmers and processors about workable changes that will improve the system. That should put Edge in a good position to impact any future hearing on FMMOs or to work for legislative improvements with Congress. 

In the meantime, we are looking for feedback from members regarding changes they would like to see. We are also continuing our education campaign to make sure our farmers better understand their milk checks and the order system. Edge’s partnership with Dr. Marin Bozic has been especially valuable on this front. He is one of the leading minds on milk pricing in the country. His webinar series has been very popular and is reaching an audience far beyond just our members. Past and future webinars and other resources are available on our website at www.voiceofmilk.com/page/FMMO. You can share feedback with me at jholevoet@voiceofmilk.com.