Got Milk? FMMO Proposed Changes Have Dairy Farmers Saying “Hold My Glass.”

Alright folks, gather ’round the milk truck, because things are about to get cheesy in the dairy aisle. The USDA, after what felt like an udderly long time, finally dropped their proposed changes to the Federal Milk Marketing Order (FMMO). Think of it like this: the FMMO is the rulebook for how milk money changes hands, from the farmer who’s up at the crack of dawn to the grocery store where you grab your gallon. And let’s just say, these proposed changes have got everyone from dairy farmers to industry giants buzzing like flies on a… well, you get the picture.

A Look Back at the Milk Madness

Before we dive into the nitty-gritty, let’s rewind a bit. The USDA didn’t just wake up one morning and decide to shake up the dairy world (though wouldn’t that be fun?). Nope, these proposed changes are the result of a mammoth, 49-day hearing that stretched from late 2023 into early 2024. We’re talking hundreds of hours of testimony, enough to make even the most dedicated milk drinker lactose intolerant. But hey, change takes time, right?

The Good, the Udderly Confusing, and the “Wait, What?”

Now, for the million-dollar question (or should we say, the million-gallon question?): What do these proposed changes actually mean for our hardworking dairy farmers? Well, like a perfectly aged cheddar, it’s a bit complex.

Roger Cryan, the main cheese whiz (Chief Economist) over at the American Farm Bureau, chimed in with some of the potential upsides:

• More Moola for Milk: The proposed changes aim to put more greenbacks in the pockets of dairy farmers, specifically for the milk that ends up in those good ol’ fashioned bottles.
• Location, Location, Location: Part of boosting those milk checks involves tweaking something called “location values,” which basically factor in the cost of getting milk from the farm to your fridge.
• Formula Makeover: The USDA is also giving those complicated milk pricing formulas a makeover, which they say will lead to fairer prices for our farmer friends.

And there’s more good news (or at least, interesting news):

• The Return of the “Higher Of” King: Remember that “average-plus” pricing formula that’s been around since 2019? Yeah, it’s getting the boot. The proposed changes bring back something called “higher of” pricing, which means the price of bottling milk will be pegged to either cheese or butter powder values—whichever is higher at the time. Think of it like a milk market rollercoaster, but hopefully with more ups than downs.

But hold your horses, milk lovers! It’s not all sunshine and buttercups (or should we say, milk and honey?). The American Farm Bureau, while cautiously optimistic, also has some concerns about these proposed changes. What exactly are those concerns? Well, you’ll have to stay tuned for the next installment of this dairy drama!