Federal Milk Marketing Order Referendum Passes In All 11 Market Orders

Source: Northwest Iowa Dairy Outlook

On Jan. 16, 2025 the USDA announced that the Federal Milk Marketing Order (FMMO) referendum passed in all 11 FMMOs. The final rule was posted in the Federal Register on Jan. 17.

During the national hearing in Carmel, Indiana the AMS gathered testimonies and evidence supporting 21 proposals from the dairy industry, leading to essential reforms in milk pricing. After the hearing, a recommended decision was issued on July 1, 2024, and subsequently published in the Federal Register on July 15, 2024. This marked the commencement of a 60-day public comment period, during which only 128 comments were received.

The final rule amends pricing provisions in each of the 11 FMMOs and is effective June 1, 2025, except for the amendments to the skim milk composition factors, which will be implemented on Dec. 1, 2025, and will apply to milk marketed on and after these dates.

In each of the 11 FMMOs obtained the necessary two-thirds vote in favor of adopting the following proposed amendments.

1. Increasing milk composition factors to 3.3 percent protein, 6 percent other solids and 9.3 percent nonfat solids which will have a six-month delayed implementation.
2. 500-pound barrel cheddar will be eliminated from milk pricing formulas and the Dairy Products Mandatory Reporting Program. After this change is implemented in June, only block cheddar prices will be used to determine the monthly average cheese price.
3. Make allowances (per pound) will increase as follows: cheese $0.2519, butter $0.2272, nonfat dry milk $0.2393 and dry whey $0.2668. Further, butterfat recovery in the Class III formula will be increased to 91 percent.
4. Class I mover returns to the “higher-of” Class III or Class IV skim milk price. A rolling monthly Class I extended shelf-life (ESL) adjustment is also part of this.
5. Class I differentials will be altered in some regions to reflect the increased cost of servicing the Class I market.

Copies of the final rule, educational materials, and the entire hearing record are accessible via the hearing webpage or by contacting USDA/AMS/Dairy Program at STOP 0225 – Rm. 2530, 1400 Independence Ave. SW, Washington, DC 20250-0225. Inquiries can also be directed to fmmohearing@usda.gov.