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Dairy Facts 2016

Sequestration to Reduce Federal Milk Market Administrators' Budget

Mar 06, 2013

On March 1, the Office of Management and Budget (OMB) reported the government’s plan to reduce the federal budget under the fiscal year (FY) 2013 sequestration required by the Balanced Budget and Emergency Deficit Control Act.

According to the sequestration, $3 million will be held back from the Milk Market Orders Assessment Fund, reducing its $57 million budget for operating the 10 market administrators' offices for the remainder of this fiscal year. These funds are collected from the dairy industry in mandatory assessments from all handlers that are regulated under the Federal Milk Marketing Order system.

In addition to the FMMO assessments, sequestration reductions will hit most voluntary user-fee funded programs, including grading and inspection by the U.S. Department of Agriculture's Agricultural Marketing Services. No specific furlough plans have been issued by USDA, and no immediate impacts are expected.

The Budget Control Act was passed by Congress in 2011 with bipartisan majorities in both the House of Representatives and Senate. The act requires sequestration as a mechanism to compel Congress to act on deficit reduction legislation. As a result of the Congress's failure to act, the law required President Obama to issue a sequestration order canceling $85 billion in budgetary resources across the federal government for FY 2013. 

The budget reductions are equally split between defense and non-defense programs, including programs at both USDA and the Food and Drug Administration. Specifically, OMB calculates a 7.8 percent reduction in non-exempt defense discretionary funding and a 5.0 percent reduction in non-exempt nondefense discretionary funding.

For more information, contact Ruth Saunders, IDFA vice president of policy and legislative affairs, at

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