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USDA Issues Regulations to Guide Mandatory Dairy Product Price Reporting

Jul 02, 2007

USDA Issues Regulations to Guide Mandatory Dairy Product Price Reporting

The U.S. Department of Agriculture (USDA) last week issued an interim final rule that lays out specific reporting and auditing requirements under the Dairy Product Mandatory Reporting Program. Although mandatory price reporting has been required since the Dairy Market Enhancement Act of 2000, USDA had not issued any specific regulations or auditing requirements until last week.

Once the interim final rule is published in the Federal Register, USDA will begin a 60-day comment period. IDFA plans to submit comments and encourages members to submit comments as well.

"Because this data is used to set milk prices, IDFA has long supported mandatory reporting and auditing to insure that the data collected is correct before being used for price announcements," said IDFA President and CEO Connie Tipton. "We're pleased that USDA has taken steps to ensure that the reporting system is accurate and timely."

Inaccurate reporting can result in significant changes to the prices paid for farm milk, by either reducing or raising the prices that processors pay to dairy farmers. This issue was raised in April when USDA realized that one plant unintentionally reported forward-priced nonfat dry milk prices to USDA's National Agricultural Statistics Service (NASS). (See related story in this News Update.)

The interim rule applies only to manufacturing plants or storage facilities of 40-pound block and 500-pound barrel cheddar cheese, dry whey, nonfat dry milk and butter. Of the 1,100 dairy manufacturing companies in the United States, there are 98 manufacturing plants and 110 cold storage facilities currently required to report under the mandatory requirements, according to USDA.

While the interim final rule would not change the current method used by NASS to collect the price data, the program explains how USDA would verify the reported prices through new auditing requirements. Under the interim rule, USDA's Agricultural Marketing Service (AMS) representatives would visit all plants required to file reports at least once during the first year of the program. In subsequent years, only high-volume plants would receive yearly visits, and lower-volume plants would be visited for onsite verification every other year.

According to the interim rule, the confidentiality of the price reports and other proprietary business information is covered by the Privacy Act of 1974 (5 U.S.C. 552a).

IDFA is currently reviewing the interim rule in detail and will send more information to members this week.

To read USDA's press release, click here.

For more information, contact Bob Yonkers, IDFA chief economist at or 202-220-3511.

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Posted July 2, 2007

Dairy Delivers