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IDFA Continues to Oppose Proposed Class I and II Price Formula Changes

Feb 05, 2007

IDFA Continues to Oppose Proposed Class I and II Price Formula Changes

IDFA last week submitted a post-hearing brief to the U.S. Department of Agriculture (USDA) opposing the pending petition to change the Class I and II price formulas to include price increases for both classes. IDFA and several member companies testified in opposition at the hearing held last December in Pittsburgh, where USDA announced that it would welcome post-hearing briefs from interested parties.

USDA plans to review the post-hearing briefs, which were due January 30, along with the testimony and exhibits presented at the week-long hearing before publishing a decision. The National Milk Producers Federation (NMPF), the organization recommending the change to increase Class I and II prices, has asked USDA to issue its decision as soon as possible and to implement it on an emergency basis.

"This is a very serious issue with enormous implications for our members," said IDFA President and CEO Connie Tipton.

The petition's proposals, if adopted, would forever de-link both the Class I and Class II price formulas from the Class III and Class IV price formulas. In addition, the Class I minimum price would increase by 77 cents per hundredweight (6.6 cents per gallon), and the Class II butterfat price would increase by 1.6 cents per pound of butterfat.

In its brief, IDFA calls for all parts of the petition to be rejected, demonstrating that the changes aren't necessary to ensure a sufficient supply of fluid milk and that they would lead to disorderly marketing. To read IDFA's post-hearing brief, click here.

Separately, three congressional leaders sent a joint letter to USDA last week urging the department to reject the petition, saying it has the potential to reignite regional conflict and could lead to the unraveling of the Federal Milk Marketing Orders.

Senator Herb Kohl (D-WI), chairman of the Senate Agriculture Appropriations Subcommittee, Senator Russell Feingold (D-WI) and Representative David Obey (D-WI), chairman of the House Appropriations Committee, claim the proposal to increase the value of fluid milk is unfair to farmers in the upper Midwest.

"Instead of considering proposals to bring regulation of dairy markets into the 21st century, the proposal that USDA is considering would exacerbate the inequities and increase the market distortions caused by the anachronistic federal orders," their letter states.

"IDFA commends these members of Congress for recognizing the flaws in this ill-conceived proposal and adding their voices to those calling on USDA to reject it," said Tipton.

To read the congressmen's letter, click here.

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Posted February 5, 2007

 
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