GREEN BAY, WIS. – The American Dairy Coalition laid out its list of federal milk pricing priorities, ahead of the shaping of the 2023 farm bill.
The farmer-led organization that focuses on federal dairy policy stated it began engaging farmers and people within the dairy industry on the matter in 2020, when the Class 1 price formula change from the last farm bill in 2018 began having negative consequences.
The coalition, which utilized webinars, calls, surveys and other lines of communication to gather information and opinions, ultimately came up with eight federal milk pricing priorities, which were approved by the ADC board:
• Examine Class 1 mover via hearing – The ADC stated Federal Milk Marketing Order changes should go through a hearing process and include comparisons to previous Class 1 mover formulas.
• Address risk management concerns – The coalition emphasized that every FMMO milk pricing proposal should be “stress-tested to gauge impact on performance of the tools dairy farmers purchase to manage price risk.”
• Restore democracy – A vote following FMMO hearings should allow for “all individual dairy farmers to cast a secure, confidential and trustworthy ballot,” and the process shouldn’t rely on bloc voting from cooperatives.
• Tie the make allowance amendment to the Class 1 mover amendment – The ADC wants to see a hearing on the previous “higher of” Class 1 mover formula if an FMMO is amended or an FMMO hearing process is opened to raise processor costs to convert milk into a finished dairy product.
• Tie make allowance raises to farmers receiving adequate and transparent mailbox milk prices – The coalition called for make allowances to be derived “directly from dairy farmers’ milk payments as they are embedded into the classified end-product pricing formulas.”
• Expand pricing survey and include farm cost of production – “Mandatory and frequent reporting of farm-level milk cost of production,” would be in place under this guideline, which also calls for a comprehensive survey of dairy product prices, reaching farther than the four base commodities used in end-product pricing.
• Examine Dairy Forward Pricing Program impacts and structure – Per the ADC, farmers need to be able to protect their actual mailbox milk price in a longer-term forward pricing agreement, so farmers have flexibility.
• Climate and carbon tracking clarity, and carbon asset ownership – The ADC wants a dairy farm to be able to retain “100% ownership at all times” of its earned and achieved carbon assets, regardless of where its milk is processed. Plus, the coalition wants milk buyers who acquire a dairy farm’s data to disclose how that information will be used – and stated farmers should have some recourse if the data is used against them when milk contracts are renewed.