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USDA Takes Action on Two Federal Order Issues In recent weeks, the U.S. Department of Agriculture (USDA) has taken action on two issues regarding the Federal Milk Marketing Order system. First, the department has announced its final decision on a slight adjustment to the definitions of milk in Classes III and IV. Second, USDA held an emergency hearing last week to consider a proposal for a temporary Class I surcharge, stemming from financial setbacks from the hurricanes in the Southeast.On September 23, USDA issued a final decision to permanently reclassify milk used to produce evaporated milk or sweetened condensed milk in consumer-type packages from Class III to Class IV in all 10 federal orders. This change was unopposed at a public hearing on the matter last October; IDFA's Legislative and Economic Policy Committees had reviewed the proposal prior to the hearing and expressed no opposition. In fact, the industry has been complying with the reclassification since USDA issued an interim final decision on April 23. Now that a final rule has been issued, USDA is required to conduct a referendum of all affected dairy producers to determine whether they approve the proposed amended orders. To read the official USDA notices on this reclassification, click here. Separately, USDA held an emergency hearing in Atlanta on October 7 to consider a petition to amend three federal orders (the Appalachian, Southeast and Florida orders) in the southeastern United States, which has recently been hit by several hurricanes. The proposal seeks a temporary supplemental charge on Class I milk in these three areas that would be disbursed through a marketwide service payment provision in each of the orders. The proposal was submitted by four cooperatives: Dairy Farmers of America, Lone Star Milk Producers, Southeast Milk, and Maryland & Virginia Milk Producers. The co-ops believe that the funds would help both dairy cooperatives and manufacturers in the affected regions offset financial losses experienced as a result of the recent hurricanes. There was no direct testimony at the hearing against the petition. Given the petitioners' request to have the change implemented by January 1, USDA is expected to issue its decision soon. If USDA agrees with the petition, the department would have to conduct a producer referendum in order to approve the change. For USDA's announcements on this issue, click here. For more information on either topic, contact the IDFA economic policy group at 202/737-4332.
Posted October 12, 2004
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