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Federal Milk Marketing Order Reform

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Issue Overview

In January 2019, voting delegates to the American Farm Bureau Federation’s 100th annual meeting recommended to the AFBF board of directors that the organization convene a Farm Bureau- and producer-led coalition to review methods to restructure and modernize the current Federal Milk Marketing Order system. The working group will identify a solid base of FMMO guiding principles that enable our members and staff to be involved in conversations and policy development on how to:

  • Reform and modernize milk pricing and revenue pooling provisions while preserving orderly marketing conditions in dairy;
  • Ensure dairy farm families across the country have a voice – and a vote – when considering how to modernize these orders; and
  • Identify the opportunities and challenges in marketing orders that we likely will face in setting our course to reach our goals.

Background Research

Background on how milk is priced
Milk prices in the U.S. are based on end-product pricing formulas that utilize wholesale commodities to determine the regulated value of milk. The milk check ultimately consists of a complex arrangement of end commodities, component values, classified pricing, milk pooling, pricing formulas and reblending.  This article provides an overview of milk pricing in the U.S.

Background on cooperative bloc voting
Through a referendum process, producers are able to approve changes to the FMMO program. Currently, if the amended FMMO is not approved by two-thirds of the voting producers or two-thirds of the voting milk volume pooling on the order, the entire FMMO is terminated. This article provides an overview of producer voting during the referendum process.

Background on a 'No' vote terminating an FMMO
When voting on modifying an FMMO, there are two methods for ballots to be cast in a producer referendum process: individual ballots and bloc voting by cooperatives. This article reviews an alternative voting process used for promotion programs.  


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