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IDFA Calls for Specification Updates in Dairy Product Reporting

May 01, 2013

In comments filed yesterday with the Agricultural Marketing Service, IDFA reaffirmed its longstanding support for the mandatory reporting and auditing of data used by the U.S. Department of Agriculture to calculate federal order pricing formulas. In addition, IDFA called for several updates to the specifications for the Dairy Product Mandatory Reporting Program, which is used monthly to set the formulas that determine Federal Milk Marketing Order minimum component and class prices for milk.

The program requires companies to report the weekly sales information for butter, nonfat dry milk, 40-pound cheddar cheese blocks, 500-pound cheddar cheese barrels and dry whey.

“IDFA urges USDA to focus on collecting transactions data for commodity products only and to exclude any value-added products,” the comments said. “The pricing mechanisms, terms of trade and price levels for value-added products are very different than commodity products. Their inclusion would result in DPMRP survey prices that would not represent the market for commodity products and, therefore, would not represent the value of the farm milk used in their manufacture.”

Supporting the reporting exclusions for organic products and kosher products made under close rabbinical supervision, IDFA asked USDA to make a similar distinction for products made from cows not treated with rBST. Currently, USDA distinguishes between products labeled kosher and the kosher products that are produced under close rabbinical supervision and marketed at a higher price. Although many dairy products may include farm milk from cows not treated with rBST, IDFA said the ones that are specifically labeled and marketed under contract are value-added products that should be excluded from reporting requirements.

Regarding cheddar cheese sales, IDFA noted that the current specification excludes some transactions that take place through the CME Group spot market. IDFA asked USDA to include all CME Group spot market transaction to provide more comprehensive and accurate reporting in this category.

IDFA also asked USDA to align the cheddar cheese specifications with those for butter, nonfat dry milk and dry whey, and to exclude the reporting requirement for transportation costs only when the company’s storage facility is within 100 miles of the manufacturing plant.

For more information, contact Bob Yonkers, IDFA vice president and chief economist, at byonkers@idfa.org.

 
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