On Monday, July 15, USDA published its recommended amendments for pricing formulas in the federal milk marketing orders (FMMOs) on the Federal Register. This came two weeks after a draft of the recommended changes was released.

This now opens the door for public comment from dairy farmers, leaders, and organizations. Following the 60-day comment period, USDA will review the feedback. A final rule will then be published and voted on.

The recommended decision includes the following amendments to milk pricing:

Milk composition factors: Update the factors to 3.3% true protein, 6% other solids, and 9.3% nonfat solids.

Surveyed commodity products: Remove 500-pound barrel Cheddar cheese prices from the Dairy Products Mandatory Reporting Program (DPMRP) survey and rely solely on the 40-pound block Cheddar cheese price to determine the monthly average cheese price used in the formulas.

Class III and Class IV formula factors: Update the manufacturing allowances to: cheese — $0.2504; butter — $0.2257; nonfat dry milk (NFDM) — $0.2268; and dry whey — $0.2653. This decision also proposes updating the butterfat recovery factor to 91%.

Base Class I skim milk price: Update the formula as follows: the base Class I skim milk price would be the higher of the advanced Class III or Class IV skim milk prices for the month. In addition, adopt a Class I extended shelf life (ESL) adjustment equating to a Class I price for all ESL products equal to the average of mover, plus a 24-month rolling average adjuster with a 12-month lag.

Class I and Class II differentials: Keep the $1.60 base differential and adopt modified, location-specific Class I differential values.

Written exceptions and comments to the proposed rule must be submitted by September 13, 2024. These can be mailed in or offered online at this website: on.hoards.com/FMMOspricing. All comments should reference the docket number and the date and page number of this issue of the Federal Register. Comments will be available for viewing at www.federalregister.gov.