The U.S. Department of Agriculture (USDA) last week issued its final rule laying out the reporting and auditing requirements under the Dairy Product Mandatory Reporting Program. In the rule, USDA sided with IDFA and rejected a requested change from other groups that would have included nonfat dry milk sales transactions set more than 30 days in advance.
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 the interim final rule announced in July last year. The final rule became effective June 22.
"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 issued a final rule to ensure that the reporting system is accurate and timely."
The final rule adopted several amendments to the interim rule that went into effect last July. Now products sold under the Dairy Export Incentive Program (DEIP), as well as organic and kosher products, will be excluded. The rule also clarifies that transportation charges may be excluded, but brokerage charges or clearing fees must be included.
The final rule notes that USDA considered, then rejected, several additional changes, including a call to include nonfat dry milk sales transactions where prices were set more than 30 days in advance. In the rule, USDA references IDFA's comments, saying, "IDFA's argument has merit: 'The inclusion of sales in which the price was set more than 30 days in advance of the actual transactions would mean including survey data based on expectations of today's market environment, not the actual current market environment itself.'"
The final 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.
For more information, contact Bob Yonkers, IDFA vice president and chief economist, at firstname.lastname@example.org or (202) 220-3511.