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USDA Limit on Producer-Handler Exemption Goes to Farmers for a Vote

Dec 12, 2005

USDA Limit on Producer-Handler Exemption Goes to Farmers for a Vote

On December 9, the U.S. Department of Agriculture (USDA) issued a final decision to establish a three million pound per month limitation to the producer-handler exemption in the Pacific Northwest and Arizona-Las Vegas Milk Marketing Orders. This decision mirrors the department's "recommended decision" that was issued in April; after reviewing public comments on its recommended decision, USDA made no changes.

The decision must now be approved in a producer referendum in each of the two affected marketing order areas. If the farmers approve the ruling, the measure will be implemented; a "no" vote in a marketing area means that order is voted out of the Federal Milk Marketing Order system and will be terminated. Under federal rules, dairy cooperatives may bloc vote for their members in the affected order area.

"We believe USDA's decision helps level the playing field within the Federal Milk Marketing Order system," said IDFA Senior Vice President Chip Kunde. "We hope there will be a quick resolution, since there needs to be equitable treatment of all dairy producers and processors within federal orders."

At issue is a federal exemption given to dairy farmers who process milk from their own farms and market the products themselves; unlike other farmers and processors within a federal order area, these producer-handlers have been largely exempt from Federal Milk Marketing Order pricing and pooling requirements. However, there has been significant growth of sizable producer-handler operations in recent years, resulting in millions of pounds of unregulated milk and putting regulated producers and processors at a competitive disadvantage.

The department's decision comes after more than two years of review. USDA held its first public hearing on this topic in September 2003 and its last hearing in January 2004. To read USDA's announcement on the producer-handler limitation, click here to visit the department's website.

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Posted December 12, 2005

Dairy Delivers