Will Multiple Component Pricing be implemented in the Appalachian (FMMO 5) and Southeast (FMMO 7) Milk Orders?
Multiple Component Pricing, a way to value milk at the farm level based on components found in milk (protein, butterfat, and other non-fat solids), rather than the skim/butterfat pricing currently implemented, is on the table for the two geographically largest milk orders in the Southeast United States.
Florida and Arizona do not price milk based on MPC, and those areas are not included in this current request for change.
An April 2nd request for a hearing to evaluate the implementation of Multiple Component Pricing for Federal Milk Marketing Order 5 (Appalachian) and FMMO 7 (Southeast) was filed with USDA-AMS by National All-Jersey, Inc. The 86-page document can be reviewed here.
A great article concisely summing up the request and important factors has been written by Dave Natzke of Progressive Dairyman; read his perspective at this link.
The Tennessee and Kentucky Farm Bureaus have joined together to host an information meeting before the request for Multiple Component Pricing is fully evaluated; A Federal Order Hearing on the matter is tentatively scheduled for July 30, 2018
This May 16th meeting provides producers with a means of direct contact with FMMO officials who can explain not only the MCP proposal, but milk market pricing in detail, and how producers’ milk checks are affected by various market factors.
The details about this FB Information meeting, scheduled for May 16th in Knoxville, TN, are:
What: Meeting with Dana Coale, Deputy Administrator for USDA -AMS Dairy Programs, along with several officials of Market Administrator Offices in Federal Orders 5 & 7For: Any dairy farmer in Federal Milk Marketing Orders 5 & 7Organizers: Meeting has been organized by TN and KY Farm Bureau organizationsSeveral state Farm Bureaus have been involved in dairy farm matters in the past few months – please give them a THANK YOU!)Date: Wednesday, May 16, Knoxville TN 11:00 amTime: Sandwich Lunch @ 11 am; Lunch begins promptly at Noon EDTWhere: University of TN Ag Campus, Hollingsworth Auditorium. Plant Sciences Bldg.2505 East J. Chapman Drive; Knoxville, TN 37996For: Any dairy farmer in Federal Milk Marketing Orders 5 & 7Purpose: To discuss current market procedures and proposed market changesRSVP / Register by May 11th:Roxann Sanders – Email at firstname.lastname@example.org – ORPhone at 931-388-7872, ext 2231
The Invitation Letter and Announcement:
Jeff Aiken, TN Farm Bureau President, and Mark Haney, Kentucky Farm Bureau President, co-authored this meeting invite, which was also mailed to dairy producers:
The Meeting’s suggested agenda:
Following the announcement of these Knoxville, TN meetings, USDA-AMS has posted an “Action Plan” with a proposed calendar of activity related to Multiple Component Pricing. Please note additional proposals can be accepted until June 1st!
Resources for Additional Consideration (Highly suggested reading!!!):
Multiple Component Pricing (MCP) first began taking place in the Federal Order System in the Great Basin Milk Marketing Order in 1988. [The Great Basin Order is referenced in this 2002 testimony to a Western Milk Marketing Order Hearing.]
Since that time, several orders have consolidated, but the great majority of the United States dairy producers are paid on a MCP basis. At this time, this map generally defines the geographic locations of FMMOs across the United States, however, California was conducting a producer referendum, in which voting ended on May 5th to finalize entry into the Federal Order System:
- The 2018 MPC Hearing Request (80 pages), filed by National All-Jersey, with USDA-AMS
- “Would Component Pricing Work in the Southeast?” a 2014 article published by Hoard’s Dairyman, authored by Dr. John Newton, then at the Univ. of Illinois, and now Director of Market Intelligence at the American Farm Bureau Federation
- “14 years of Multiple Component Pricing: What Has Changed?” an April 2015 article by Calvin Covington, former CEO of Southeast Milk, Inc.
- A 1993 8-page review, “Issues and Options for Using Multiple Component Pricing to Set Pricing in Federal Milk Marketing Orders,” was written by Dr. Robert Cropp, Univ. of Wisconsin, and Walter Wasserman, Cornell University
- The USDA-AMS / Dairy Programs Website for general dairy information, which includes many links to most factors related to MILK in the United States
- An additional USDA-AMS page, which links to specific factors affecting milk including solids tests, protein tests, non-fat solids tests, and much more
Producer groups in the southeast, including the Kentucky Dairy Development Council, the Georgia Milk Producers Association, and the North Carolina Dairy Producers, have endorsed a Multiple Component Pricing structure. The Tennessee Dairy Producers Association is currently opposed (as of May 10th).
Each and every producer should take the time (and it may take a few hours) to evaluate Component Pricing and how it will affect your farm’s income in the future! Isn’t your farm’s future worth that time?
AND – each producer is highly encouraged to attend the May 16th meeting in Knoxville to have a chance to ask direct questions to USDA-AMS officials.
Your future income depends on accurate information – please make the most of this meeting opportunity!