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Dairy Facts 2016

USDA Issues Final Decision on Producer Handlers, Exempt Plants

Mar 01, 2010

The U.S. Department of Agriculture late Friday announced a final decision to make milk price regulation more consistent for all dairy processors, including producer-handlers who own farms and process milk. The two main points from the recommended decision issued by USDA last October remain unchanged.

Producer-handlers with more than three million pounds of Class I sales per month will become fully subject to federal order pricing and pooling regulations in all federal milk marketing areas. In addition, the limit exempting any handler from pricing and pooling provisions remains at 150,000 pounds of Class I sales (combined route dispositions and sales to other handlers) per month.

USDA made one technical correction to the recommended decision, however. In the recommended decision, USDA only counted route dispositions toward the three million pounds; however, route dispositions by definition exclude sales by any handler to other handlers. The final decision now states,

"This decision agrees that it is appropriate to include and specify that a producer-handler's sales of packaged fluid milk products to other plants, together with route disposition during the month, for determining if the three-million pound per month threshold has been met."

Final Decision to Ease Disorderly Marketing Conditions

IDFA and the National Milk Producers Federation submitted joint petitions to USDA in January of last year, requesting a hearing to consider changes to these provisions.

"We're pleased that the final decision agreed with IDFA testimony, as well as testimony from NMPF and member companies of both organizations, that exempting all producer-handlers from federal order pricing and pooling provisions would continue to create disorderly marketing conditions," said Bob Yonkers, IDFA vice president and chief economist.

The final decision is expected to be published March 4 in the Federal Register. USDA will have 30 days to hold referendums among affected dairy producers in each of the 10 federal orders. At least two-thirds of producers voting in each marketing area must approve the changes; if the referendum is opposed by more than one-third of producers in any one marketing area, USDA is required to terminate all federal order regulations in that marketing area.

After the referendums, USDA will republish the final decision, noting the outcomes of each referendum, and provide an implementation date.

Members with questions may contact Yonkers at or (202) 220-3511.

Read USDA's final decision here.

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