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Federal Milk Marketing Order Hearing Gets Started

By Geoff Vanden Heuvel

Director of Regulatory and Economic Affairs

How would you report on the first mile of a 26-mile marathon where the race results will not be known until months after the race is finished? That is where we are with the Federal Milk Marketing Order (FMMO) hearing that started this week in Carmel, Indiana.

There was a bit of conflict at the beginning of the hearing on Wednesday as a couple of organizations, whose submitted proposals were not accepted for inclusion into this hearing, formally objected to USDA’s exclusion of their proposals. Those objections were noted and entered into the record by the Administrative Law Judge who is presiding over the hearing. USDA asked for a number of days to prepare an official response to the objections and so it goes.

The first hearing topic is Milk Composition. The National Milk Producers Federation and National All Jersey witnesses were able to submit their proposals and justifications and were subject to cross-examination. One of the areas of questioning concerns the ability of fluid milk handlers to recover the value of higher components in the skim milk portion of fluid milk. The proposed delay of the implementation of higher standard components and how often those components would be adjusted in the future was also raised in testimony and cross-examination. There is now a widely used dairy crop insurance product which uses the FMMO formulas as part of their process. The Dairy Revenue Protection program allows milk price coverages to be purchased for time periods in excess of 15 months into the future. Changes to the formulas, which are implemented in a timeframe shorter than that, could cause indemnities to be incurred due to regulatory changes as opposed to market or other changes (e.g., weather/pandemic). These are all concerns USDA will have to consider as they analyze the proposals and the testimony that is gathered through this hearing process.

The Federal Order hearing process is long, but thorough, and I would argue fair. Any interested party can testify, and anyone is free to cross-examine witnesses as long as they are physically in the room. A FMMO hearing is not entertainment, but that does not mean it is not interesting or important. The one exception to the in-person rule is that USDA has provided a special opportunity for actual dairy farmers to testify virtually. You can learn how to participate here.

This hearing is expected to continue until early October, so there is a lot of road yet to travel.

View the hearing or, you may listen only, via cellular phone or landline

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