The Federal Milk Marketing Order (FMMO) discussions, pivotal to the agriculture sector, especially dairy farmers and processors, are currently on Thanksgiving break. These discussions, spanning over seven weeks, are no small talk. They're set to shape the future of dairy pricing in significant ways.
One of the primary focus points is all about finding the sweet spot for dairy plants' margins — ensuring they're keen on buying farmers' milk while not shortchanging the farmers themselves. The discussions are also diving deep into the nitty-gritty of milk pricing formulas, especially for bottling. The aim here is to achieve a fairer, more stable market, steering clear of the chaos experienced back in 2020.
Several changes are on the table. These include an overhaul of pricing formulas to potentially benefit milk prices and a critical look at processors’ margins. But there's a prerequisite — comprehensive data on processors' costs and yields before any margin changes. Other points of interest are the ending of advanced bottling milk pricing and a proposal for a price bump for milk destined for creamy delights like ice cream.
While the discussions are set to resume after Thanksgiving, wrapping them up is a marathon, not a sprint. The journey from discussions to implementation is long, involving multiple stages like proposal drafting, public commentary, and voting. The industry might only witness official rule enactments by 2025, with a staggered full implementation to follow.
Source : wisconsinagconnection