The information below has been supplied by dairy marketers and other industry organizations. It has not been edited, verified or endorsed by Hoard’s Dairyman.
Two key concerns are the agricultural workforce shortage and the future of federal milk pricing reforms being considered through the 2023 Farm Bill and future FMMO hearing. As a grassroots dairy producer organization, ADC has been actively working on several fronts to give dairy farmers a voice in these and other issues and policies we are facing.
Dairy farms are the keystone of agricultural economies in many rural areas, but workforce shortages and economic losses from failures in the current federal pricing system are two significant limiting factors. We are seeing dairy farmers of all sizes make the decision to sell cows because of the combination of labor shortages and higher workforce costs against the backdrop of reduced operating margins from which to navigate the changing labor landscape.
Our dairy farmers need workforce solutions and stability in labor costs, and we need reforms in federal milk pricing that bring transparency and value to the mailbox price at the farm level.
For example, farmers had no voice in a change that was made to the formula for pricing beverage milk within the federal classified pricing scheme. Since this change was implemented by USDA in May 2019, dairy farmers have incurred a net loss of $888 million in Class I fluid milk revenue over those 42 months. Class I fluid milk is the only class use that is required to participate in federal milk marketing order pools. These regional pools blend the four class utilization prices to set a ‘uniform minimum price.’ Beyond the $888 million, dairy farmers have additional cuts to their mailbox milk price when higher value manufacturing milk is selectively withdrawn from these federal pools. This then disrupts the performance of the risk management tools we as dairy farmers purchase to protect a margin against market conditions, but they fail when the value is ‘in the market,’ but not in our mailbox milk check.
To participate in the media interview session or schedule an interview, contact Laurie Fischer at Laurie@lauriefischergroup.net
See ADC’s federal milk pricing priorities here