IDFA sets February deadline for milk marketing order agreement |

IDFA sets February deadline for milk marketing order agreement


ORLANDO, Fla. — Michael Dykes, the president and CEO of the International Dairy Foods Association told reporters here Monday that if IDFA and the National Milk Producers Federation do not reach agreement on a proposal for reform of Federal Milk Marketing Orders by the week of Feb. 20, IDFA will submit its own petition to USDA for a modernization of the system.

IDFA represents dairy processors, although the membership includes farmer-owned dairy co-ops that engage in processing. NMPF represents farmers and their co-ops.

Both groups have been working toward a modernization of the regional system of setting minimum prices that processors must pay for milk and its components. Agriculture Secretary Tom Vilsack has said he wants the industry to bring a single proposal to him before he initiates a process of modernization.

Dykes made the statement to reporters at a news conference at IDFA’s annual Dairy Forum after he gave a wide-ranging speech to the IDFA membership.

Dykes said that IDFA’s work on the proposal has been focused on the “make allowance,” an estimate of what it costs to transform milk into a finished dairy product like butter or cheese. He said the make allowance formula was last set in 2006 and IDFA members believe it needs to be raised because various costs have gone up.

Dykes said that NMPF members have a wider variety of issues they want addressed in the reform process.

Separately from the milk marketing order reform effort, Dykes said that IDFA is asking Congress in the farm bill to give USDA the authority to require companies to report what their costs are so that the make allowance formula can be based on accurate data.

IDFA initially passed a make allowance proposal last week and will take it to its five segment boards on Feb. 6. If those boards agree, Dykes said he has talked to NMPF President and CEO Jim Mulhern about having a joint meeting the week of Feb. 20.

Dykes said he believes NMPF is also developing a new formula for setting the make allowance, but that he has not seen it.

If there is no resolution at that late February meeting and no hope of unity, Dykes said, then IDFA will petition USDA on its own.

Dykes said he is optimistic there will be agreement.

Mulhern is also attending the IDFA meeting. In an interview before Dykes held his news conference, Mulhern described the reform project as “a work in progress.” Mulhern said NMPF has held more than 150 meetings and is still working on a formula for Class I milk, which is used to make beverage products.

Mulhern said there are still differences with IDFA, but he hopes to hold more discussions with the group.

Asked about Dykes’ February deadline, Mulhern said in an email, “Our members are pursuing a more comprehensive approach to modernize the federal milk marketing order program than IDFA’s limited focus on changes to dairy plant manufacturing costs (make allowance).”

“It will be important to try to find common ground on these issues to maximize the likelihood of getting needed changes through the USDA approval process.”

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