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Dairy Facts 2016
 
 

Federal Milk Pricing System Hurts Small Companies, IDFA Says

Apr 15, 2015

In comments filed Monday with the U.S. Department of Agriculture, IDFA demonstrated that the Federal Milk Marketing Orders system is particularly burdensome to small dairy companies, saying it increases costs, makes small companies less competitive and hurts the fluid milk business. USDA’s Agricultural Marketing Service invited the public comments as part of its review of how the federal milk pricing system affects small entities, defined as companies with fewer than 500 employees.

While only some of its members are small entities, IDFA said nearly all members have customers that are small entities and explained the significant impact that the federal order regulations have on these customers, as well as small dairy companies. The comments also mentioned that the unnecessary regulatory costs imposed by the regulations ultimately can cause families to purchase less milk or consume non-dairy alternatives and miss the essential nutrients  that come from dairy products.

IDFA also noted that some small dairy processing companies are regulated under state authorities in one location and under a federal order in another. These differences impose a significant regulatory reporting burden, and the companies often must pay for costly accounting and legal services to interpret the complex federal and state regulations.

“FMMOs were created to address the U.S. dairy industry of the 1930s. While there may have been reasons at that time to impose market-intrusive regulations to address concerns of some industry sectors, those concerns no longer exist.” IDFA said in the comments. “Simply put, there is no longer a need for the federal government to require fluid milk bottlers to pay a higher price for milk than manufacturers of other products.”

For more information, contact Bob Yonkers, IDFA vice president and chief economist, at byonkers@idfa.org.

 
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