FOMO on FMMO Changes

Feb 1, 2022

The dairy industry is mooving toward changing the Federal Milk Marketing Order (FMMO) system that has divided milk into four classes since the 1930s.

For nearly 100 years, FMMO has rewarded Class I fluid milk producers with the highest prices. Americans “got ‘less’ milk” these days and are consuming more Class II, III, and IV milk in their cottage cheese, ice cream, hard cheeses, yogurts, etc.

Meanwhile, producers of class II, III, and IV milk aren’t happy, earning under their Class I milk counterparts.

Not amused: At the annual Dairy Forum last week, the International Dairy Food Association (IFDA), which includes cooperatives, large companies, small family businesses, and retailers, released “Modernizing U.S. Milk Pricing: An Exploration,” a paper focusing on revising FMMO and pricing disparity among milk classes.

Dairy processors and dairy farmers must come to an agreement on modernization before the FMMO is opened for hearings, U.S. Secretary of Ag Tom Vilsack said.

Soundbite: “The issue is not to abandon Class 1, the answer is to look at the overall program and make sure it is providing the necessary incentives to meet ongoing fluid demand and efficiently move product into the other classes,” said Jim Mulhern, National Milk Producers Federation (NMPF) President and CEO. Mulhern is confident IFDA and NMPF will reach a consensus.