IDFA Says Omit Value-Added Products Only from Mandatory Price Reporting

IDFA submitted additional comments to the Agricultural Marketing Service (AMS) of the U.S. Department of Agriculture (USDA) to help clarify issues surrounding the new mandatory price reporting and auditing requirements that were issued as an interim final rule in July. AMS reopened the comment period at the end of October to allow the industry to consider whether kosher dairy products and products produced with milk from cows not treated with rbST should be included.

In its comments, IDFA urges USDA to include in the Dairy Product Prices report all products produced under Kosher certification programs, unless they require direct rabbinical supervision during production. The comments also recommend including products made with milk from cows not treated with rbST, unless they are specifically required by the sales contract to be made as such.

"The issues of Kosher products and products manufactured with milk from cows not treated with rbST are similar," the comments state. "If the final dairy product is marketed as a value-added product rather than a commodity product, the additional cost of manufacturing and/or farm milk means the market for the product is not representative of a commodity dairy product."

AMS also had solicited comments to determine whether a minimum transaction volume for reported transactions should be established. Following industry practice, IDFA recommends setting a minimum transaction volume of 40,000 pounds, which represents a typical truckload of dairy products.

The Dairy Product Mandatory Reporting Program is designed to provide timely, accurate and reliable pricing data in formulas that mandate the minimum prices processors must pay for farm milk. IDFA voiced support for the program in its initial comments in September and recommended ways to streamline the collection process and enhance the reliability of the data. To read the previous News Update story, "IDFA Supports Mandatory Price Reporting Guidelines in Comments to USDA," click here.

The interim rule became effective August 2. The original comment period ended September 4, and additional comments were due December 3.

To read IDFA's comments, click here. For more information, contact Bob Yonkers, IDFA vice president of economic analysis, at byonkers@idfa.org or 202-220-3511.

Posted December 10, 2007