Editor’s Note: The following is an Editorial Comment from the editors of Hoard’s Dairyman.

In December 2021, USDA Secretary Tom Vilsack called for consensus from the dairy industry before a federal milk marketing petition landed on his desk. While we cannot say for certain what the secretary had in mind issuing his consensus request, we would suggest that the dairy community fell well short of his stated goal.

In late March, the International Dairy Foods Association (IDFA) and the Wisconsin Cheesemakers Association (WCMA) each filed a single-request petition to amend the federal order manufacturing or “make allowance” values. In a good faith negotiation effort, the groups had postponed submitting a petition for a number of months to continue discussions with dairy farm leaders. After that additional dialogue, the only consensus reached was that make allowances needed to be updated. No agreement was reached pertaining to cost data collection and specific formulas. Unable to find common ground on their topic, IDFA and WCMA filed their hearing request with USDA.

While the manufacturing community has been ready to go for some time, it has taken dairy farmers, largely led by the National Milk Producers Federation (NMPF) and the American Farm Bureau Federation (AFBF), much longer to coalesce and finalize their proposal. That’s because there are many more players at the table with different regional issues and cooperative representation. Hence, it took over 150 meetings according to the dairy farm groups, leaving dueling proposals.

While we have deep respect for the leadership and expertise on both sides of the dairy aisle, we would have to agree with NMPF and AFBF that only looking at make allowances will leave dairy producers at an economic loss with the IDFA and WCMA petition. While no one has spelled it out in a concise statement, we believe the hang-up between the groups centers on the make allowance surveys to establish manufacturing costs.

Manufacturers would suggest that good voluntary surveys already exist. However, dairy farmers would contend new plant construction has made significant gains in manufacturing efficiency and lowering costs.

While the NMPF proposal gained a unanimous vote from its membership, the same cannot be said of IDFA. We know that because four dairy processing co-ops that are also members of IDFA wrote a letter asking the USDA secretary to not grant IDFA’s hearing request.

At the moment, the process has not reached consensus. While that was not a stated reason, it's likely one of the factors why the March 30 petition was rejected in an April 28 letter from USDA. The official reason shared was, “USDA requests additional information regarding specific make allowance values . . .” With that decision in the rearview mirror, we urge the dairy community to work toward greater consensus so federal orders can receive updates before year’s end.

To comment, email your remarks to intel@hoards.com.
(c) Hoard's Dairyman Intel 2023
May 1, 2023

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