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USDA Announces Decision to Reconsider Make Allowance Amendments

Sep 01, 2006


For Immediate Release

Media Contact: Marti Pupillo202-220-3535

IDFA Welcomes USDA Decision to Expedite Much-Needed Cost Adjustments in Milk Pricing Formulas

(Washington, D.C. — September 1, 2006) The International Dairy Foods Association (IDFA) supports the U. S. Department of Agriculture's (USDA) decision to speed the agency's review of proposals to amend the Class III and Class IV milk price formula manufacturing allowances for all Federal Milk Marketing Orders. The Department has announced plans to reconvene a national public hearing in a limited nature to receive new manufacturing cost data compiled by Cornell University. The hearing will be held September 14 in Strongsville, Ohio.

"We're thrilled that USDA heard the outcry from Congress to do the right thing and quickly reconvene the hearing," said Chip Kunde, IDFA senior vice president. "By holding it next month and limiting the scope of evidence to the new data from Cornell and publicly available data, we hope that USDA can come to a speedy conclusion to update the make allowances immediately."

Created through a federal order reform process mandated by Congress in the 1996 Farm Bill, the make allowances established on January 1, 2000, fix the margins USDA permits processors to apply to cover the manufacturing costs of turning raw milk into a finished dairy product. These margins currently are based on industry manufacturing cost data from 1997-99 and are grossly below today's true costs.

Earlier this summer, IDFA expressed shock when USDA announced in June that it planned to reconvene a national public hearing, because a prolonged delay to a final decision on make allowances would have a devastating effect on the U.S. cheese makers and the dairy industry overall. An emergency hearing had already been held by USDA in January to address the need to update make allowances. Many in Congress and the industry, including IDFA, viewed the delay as unwarranted and unnecessary, given the amount of data the agency gathered at the January meeting.

"We appreciate the bipartisan efforts of Chairman of the House Agriculture Subcommittee for Dairy Gil Gutknecht (R-MN) and Chairman of the House Agriculture Committee Chairman Bob Goodlatte (R-VA), who joined Representative David Obey (D-WI) and 28 congressional leaders in the House of Representatives and Sens. Norm Coleman (R-MN) and Herb Kohl (D-WI) who led 15 senators from across the country to urge USDA to promptly update make allowances," said IDFA President and CEO Connie Tipton.

"We truly appreciate the support offered by these members of Congress. The delay is still costing dairy product manufacturers $26 million a month, so we look forward to a swift decision from USDA to bring the industry much-needed relief," Tipton said.

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The International Dairy Foods Association (IDFA), Washington, DC, represents the nation's dairy manufacturing and marketing industries and their suppliers, with a membership of 530 companies representing a $90-billion a year industry. IDFA is composed of three constituent organizations: the Milk Industry Foundation (MIF), the National Cheese Institute (NCI) and the International Ice Cream Association (IICA). IDFA's 220 dairy processing members run more than 600 plant operations, and range from large multi-national organizations to single-plant companies. Together they represent more than 85% of the milk, cultured products, cheese and frozen desserts produced and marketed in the United States. IDFA can be found online at

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