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Implementation of Make Allowance Updates Delayed by Lawsuit

Aug 25, 2008

Several dairy producer groups filed a lawsuit on August 15 seeking to stop implementation of the U.S. Department of Agriculture's interim rule that amends Class III and Class IV product prices. Four days later, USDA and the plaintiffs agreed to delay the implementation of the rule, originally scheduled for September 1, for one month.

The lawsuit, filed in the U.S. District Court for the District of Columbia, challenges USDA's tentative partial final decision to amend the Class III and Class IV product price formulas in all federal milk marketing orders. The plaintiffs say the decision, which was issued in June, is illegal because they claim it did not consider requirements set forth by new Farm Bill or information gathered during department hearings.

IDFA has been allowed to intervene as a party to the lawsuit and will participate at a hearing to review the merits of the lawsuit on September 16. The court is expected to make a determination on the producer groups' request for a preliminary injunction before September 19. If the request is denied, the USDA will be allowed to proceed with the rule on October 1.

"We want the tentative partial decision implemented as quickly as possible and are hopeful that it will only be a one-month delay," said Jerry Slominski, IDFA senior vice president.

The dairy producers bringing the suit are the Arkansas Dairy Cooperative Association, Inc.; Central Sands Dairy, LLC; Columbia River Dairy, LLC; Continental Dairy Products, Inc.; Dairy Producers of New Mexico; Maryland and Virginia Milk Producers Cooperative Association; Select Milk Producers, Inc.; United Dairymen of Arizona; and Zia Milk Producers, Inc.

As a result of the one-month delay, USDA's previously announced changes to the make allowances, along with the butterfat yield factor, will not be used in any price announcement for farm milk marketed under federal order regulation in September.

"This delay includes both the advanced price announcement that came out last Friday, as well as the class and component price announcement scheduled for October 3," said Bob Yonkers, IDFA vice president and chief economist.

USDA initially issued the rule in June as a tentative partial final decision on an interim final and emergency basis, allowing it to be implemented before it becomes final. The department announced the September 1 implementation date earlier this month and continued to accept industry comments on the decision announced in June until last Tuesday. IDFA's comments are available online at

For more information about the decision and interim rule, read "USDA to Implement New Class III and IV Price Formulas September 1."


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