Farm Bureau Offers Testimony On Cheese And Butter Pricing At FMMO Hearing

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Source: American Farm Bureau Federation news release

American Farm Bureau Federation Chief Economist Roger Cryan presented the testimony below on behalf of AFBF and its membership at the ongoing Federal Milk Marketing Order Pricing Formula hearing. This is the second time Cryan has testified before the hearing, and he is expected to testify several additional times.

The American Farm Bureau Federation (AFBF) has nearly 6 million members in all 50 states and Puerto Rico, including many thousands of cooperative and independent dairy farmers. All of these dairy farmers are indirectly or (mostly) directly affected by the pricing provisions of the Federal Milk Marketing Orders (FMMOs).

These dairy farmers play a crucial role in the development of AFBF dairy policy. Every Farm Bureau position and proposal is based explicitly on that policy, developed through a grassroots process in which farmers make the decisions at every step of the way.

AFBF submitted 9 proposals for consideration in this hearing, and appreciates the opportunity to address the four that were accepted by USDA for consideration in this hearing, as well as the clear direction on what may be needed to advance the rest.

A fundamental focus of AFBF’s proposals is the reduction or elimination of negative producer price differentials and the de-pooling they cause. We believe that an orderly pool is the key to orderly marketing and the continued benefits of the Federal Milk Marketing Orders to farmers, cooperatives, processors, and consumers. The key to an orderly pool, in turn, is above all the proper alignment of the four Class prices.

In addition to our own proposals, AFBF largely supports four of the five proposals submitted by the National Milk Producers Federation. (These are proposals 1, 3, 13, and 19.) For these, I will outline any substantive difference in our position, with an explanation for that difference. In the event that NMPF withdraws any of these proposals, wholly or in part, AFBF would ask that USDA consider such whole or partial proposal to be AFBF’s proposal to represent.

This statement covers Category 2, Surveyed Commodity Products, and includes AFBF’s response to Proposal 3, made by NMPF, and our presentation of Proposals 4 and 5, submitted by AFBF.

Response to Proposal 3. NMPF proposes to drop barrel cheese from Class III component and price calculations.

Proposal 4: The American Farm Bureau Federation proposes that 640-pound blocks be added to the National Dairy Products Sales Report, to the cheddar cheese price calculation, and to the Class III protein calculation.

Proposal 5: The American Farm Bureau Federation (AFBF) proposes adding unsalted butter to the butterfat and protein calculation.

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