> Newsline

AFBF Advocates for Emergency Implementation of Higher-of Class I Mover

Chad Smith

Associate News Service Editor, NAFB

Daniel Munch

Economist

photo credit: AFBF

After more than 40 days of testimony, the Federal Milk Marketing Order hearings wrapped up today in Carmel, Indiana. Chad Smith has more on the final round of testimony from the American Farm Bureau.

Smith: The American Farm Bureau Federation offered the final piece of testimony at the Federal Milk Marketing Order hearing. Danny Munch, an economist with the American Farm Bureau, talks about what the testimony covered.
Munch: The American Farm Bureau Federation requested an emergency implementation of the switch back to the higher-of Class I formula. Back in the 2018 farm bill, there was a stipulation that included a switch from the higher-of Class III and IV skim milk price to the average-of Class III and IV skim milk price, and what that's done in the recent years is to move the benefit between two prices, and in times where the price spread is less than $1.48, it benefits producers. But in periods where the spread is more than $1.48, it creates negative pool losses which results in lower milk checks.
Smith: He says farmers have seen significant pool losses in recent years due to high spreads between the Class III and Class IV prices.
Munch: In December 2023, we surpassed over a billion dollars in pool losses related to the formula change. In November, that was $50 million alone, and in December of 2023, that was $38 million alone, so farmers are still feeling the pinch of the switch that occurred under the 2018 farm bill. We read a letter into the public hearing record requesting USDA to implement an emergency switch back to the higher-of, so that farmers don't face those pool losses for another month.
Smith: Munch says there’s still a long way to go in the reform process.
Munch: This is only step five in a 12-step process, so we still have a lot of days left in this process. Stakeholders still have to submit post-hearing briefs, so we're looking at months and months until a chance for any changes for dairy farmers to see will come into fruition.
Smith: Farm Bureau says each month the process continues will open up farmers to more negative pool losses due to the average-of Class I Mover formula. For more information, go to fb.org. Chad Smith, Washington.