The U.S. Department of Agriculture last week released a recommended decision to increase Class I prices by up to 20 cents per hundredweight in certain counties of the Mideast Federal Milk Marketing Order. USDA issued the decision in response to a petition filed last year by several dairy cooperatives asking for a temporary increase in Class I differentials.
USDA held a hearing on the petition last August, where several IDFA members outlined the negative economic and marketing consequences that the proposed changes would bring. They also demonstrated that there was no need to consider the proposal on an emergency basis.
Proponents claimed that the adjustments were needed to counter the market changes brought about by the agency's tentative decision earlier in 2008 that adjusted milk pricing in three Southeastern federal marketing areas.
"This is just another example of why the entire Federal Milk Marketing Order system needs to be reformed," said Connie Tipton, IDFA president and CEO. "We can't keep addressing issues on a piecemeal basis, because each regional change will have a domino effect on the rest of the market areas."
The petition was submitted by Dairy Farmers of America, Inc.; Dairylea Cooperative Inc.; Foremost Farms USA Cooperative, Inc.; Land O' Lakes, Inc.; Michigan Milk Producers Association, Inc.; and National Farmers Organization Inc. The areas covered by the decision are Indiana, Kentucky, Ohio and West Virginia.
Because it's a recommended decision, USDA will allow interested parties to submit comments before a final decision can be implemented. The deadline for submitting comments is March 16, 2009.
IDFA plans to submit comments and encourages members in the affected states to submit comments as well. Members with questions may contact Bob Yonkers, IDFA vice president and chief economist, at byonkers@idfa.org or 202-220-3511.