The USDA released its recommendations for modernizing the Federal Milk Marketing Orders in early July. Stephen Cain, senior director of economic research and analysis for the National Milk Producers Federation, talks about his initial reaction to the proposal.

“Overall, we’re very pleased with the recommendations that USDA has come up with. We put a lot of proposals into the record. So did a lot of other groups. Fundamentally, USDA agreed with our premise and methodology for all the changes we were asking for. We don’t agree with exactly how everything was implemented. They didn’t do it exactly the way we had hoped for. But in general, we’re very pleased with how USDA has come out with the recommended decision here.”

The Federation was especially pleased with the agency’s decision on the Class One mover.

“I think one of the big ones was moving the Class One Mover back to the higher-of. That was a very important piece for a lot of farmers around the country. We had made a change three years ago that turned out not to be the right decision. Farmers lost out on over a billion dollars in revenue, so it was critical for us to move back to the higher of. So we’re very pleased that happened. We had a little bit of a card out there, a little bit of an adjustment for extended shelf life milk, but overall, very pleased with that bit.”

There were some surprises.

“Removing barrels from the Class Three formula. In the long run, that’s going to be very supportive of dairy farmer revenue over the next few years and the future. Just wasn’t sure whether or not that was something they would be up for doing, but very pleased that they were.”

Cain gives a timeline for the next steps in the process.

“The recommended decision was put into the Register. We have 60 days from that time frame for everyone in the industry to file comments with USDA, so by mid-September, those will be due. USDA will then go over those and release a final decision sometime in November. We’ll have a referendum vote sometime, likely in early December, and then Q1 of next year is when we’ll see these changes be implemented. So, a little bit of a timeline before he’s actually hit the ground with the changes, but working through the process there to get through all of those steps we have to go through.”