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Senators Introduce New Federal Milk Pricing System Bills

Apr 03, 2013

Senator Kirsten Gillibrand (D-NY) announced yesterday that she and Senator Susan Collins (R-ME) will introduce next week a bill to consider new Federal Milk Marketing Orders (FMMO) proposals and require the U.S. Department of Agriculture to conduct hearings on restructuring the current pricing formulas used in FMMO.

The “Dairy Pricing Reform Act” would require USDA to hold public information sessions on proposals for replacement of the current Class III milk pricing formula. The bill allows but would not require USDA to go to a formal hearing on the Class III proposals. In addition, the bill would require USDA to hold hearings within 180 days of enactment on the implications of going to a two-class system and explore methods to improve short- and long-term price signals.

“There is nothing fundamentally different in this bill that cannot already happen under current law and procedures that were already streamlined in the 2008 Farm Bill,” said Connie Tipton, IDFA president and CEO. “IDFA’s position on the FMMO is to phase the program out, as government-set pricing systems have far outlived any benefit to the industry or consumers.

“This bill is another attempt to force USDA to ‘patch the tire’ of a 75-year-old government pricing system that can’t be fixed,” Tipton added.

The new bill to amend the federal marketing orders comes in conjunction with the bill Gillibrand introduced last week, which would to exempt small farmers from supply management penalties as proposed in the Senate Farm Bill that passed in the last Congress.

Another Senate bill on FMMO was introduced last week by Senator Dianne Feinstein (D-CA) that would allow California to voluntarily enter the Federal Milk Marketing Order system. The bill, S. 663, is a Senate companion to the bill introduced last month in the House of Representatives by Rep. David Valadao (R-CA).

These bills would designate the state of California as a separate order under the federal system. They would give California the “right to “reblend” or distribute FMMO receipts to recognize quota value” and permit the state order to retain California’s quota system, which grants producers who own “quota” to receive a higher value for a specified portion of their milk. 

IDFA continues to monitor all legislation that would alter the Federal Milk Marketing Orders.

For more information, contact Ruth Saunders, IDFA vice president of policy and legislative affairs, at or Bob Yonkers, IDFA vice president and chief economist, at

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