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Dairy Facts 2016

Federal Milk Marketing Orders Targeted in House Regulatory Oversight Plan

Feb 16, 2011

The House of Representatives passed a resolution (H. Res. 73) on February 10 requiring the Agriculture Committee and other committees of the House to review federal regulations to determine their impact on jobs and economic growth. The resolution passed by a vote of a vote of 255 to 169.

To comply with the order, House Agriculture Committee Chairman Frank Lucas (R-OK) presented an oversight plan that would review the efficiency of U.S. Department of Agriculture regulations that impede the economy. That list includes the price regulations under the Federal Milk Marketing Order (FMMO) system, as well as other programs under USDA's jurisdiction.

"IDFA applauds Chairman Lucas for including the review of milk marketing regulations in the committee's oversight plan for the 112th Congress," said Ruth Saunders, IDFA vice president of policy and legislative affairs. "These regulations have a direct impact on manufacturers' ability to innovate and increase jobs in dairy plants across the country."

The USDA milk price regulations are authorized under the Agricultural Marketing Agreement Act of 1937. They were last significantly updated after Congress passed the Federal Agriculture Improvement and Reform Act of 1996.

The FMMO regulations are binding on dairy manufacturers and stipulate what prices are paid for milk depending on how the milk is used for different dairy products. That means manufacturers base decisions on government price formulas instead of the marketplace.

USDA's Agricultural Marketing Service enforces the milk price regulations with 378 federal employees and collects over $50 million annually from dairy manufacturers to cover the salaries and expenses of the FMMO offices. While the House of Representatives has recently proposed to reduce the taxpayer-funded appropriation for AMS by 10 percent, the FY 2012 budget proposed for the FMMO offices would increase by $4 million or over 7 percent compared to current levels.

The Office of Management and Budget is prohibited by legislation from reviewing the funding and regulations under the FMMO; however, the Obama administration has requested that Congress lift this restriction in the pending FY 2011 budget. IDFA supports this proposal.

In January, IDFA responded to a request from Representative Darrell Issa (R-CA), the chair of the House Committee on Oversight and Government Reform, for a list of regulations that have harmed job growth in the dairy industry. IDFA named the federal order pricing system along with the slow process for changing product standards of identity as the main obstacles for dairy. Read the letter here.

For more information, contact Saunders at or (202) 220-3553.


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