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FMMO update: California on the clock; opposition surfaces to multiple component pricing proposal in Southeast

Progressive Dairyman Editor Dave Natzke Published on 12 June 2018

With the approval of the California Federal Milk Marketing Order (FMMO) confirmed, USDA’s Agricultural Marketing Service (AMS) is targeting an October 2018 implementation date. Meanwhile, opposition to a proposal to convert Appalachian and Southeast FMMOs to multiple component pricing (MCP) systems has surfaced.

California FMMO to be implemented in October

The results were pretty much a foregone conclusion after three major dairy co-ops bloc-voted for approval, but the USDA made it official: California dairy producers have voted to approve a FMMO covering the state.

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The new California FMMO (51) will be implemented on Oct. 17, 2018, and affected parties must comply with all provisions beginning Nov. 1, 2018.

USDA staffers will work over the next few months to educate milk handlers who will become regulated by the new FMMO. Three regional group informational meetings have already been scheduled:

• July 16-20 in Ontario, California

• July 23-27 in Clovis

• July 23-27 in Walnut Creek

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Affected milk handlers are asked to register by July 6. For more information or to register, email or call (530) 662-2037.

According to Geoff Vanden Heuvel, director of regulatory and economic affairs, the California FMMO office will be headed by acting market administrator Cary Hunter. Hunter currently serves as market administrator for the Southwest order, based in Dallas, Texas. The California FMMO office will be located at 221 W Court St., Ste. 3B, Woodland, California, 95695-2983.

USDA has also created a new website with information specific to the California FMMO.

Once California’s new FMMO is implemented, over 80 percent of the U.S. milk supply will fall under the FMMO regulatory framework.

MCP proposal draws opposition 

Opposition to a proposal to change how milk prices are calculated in two southeastern U.S. FMMOs has surfaced.

The letters, along with alternative proposals, were submitted by Stan Butt, executive director of the Tennessee Dairy Producers Association, and Michael Brown, director, Dairy Supply Chain, The Kroger Co., Cincinnati, Ohio. The letters have been posted on the USDA website: Multiple Component Pricing in the Southeast and Appalachian Orders.

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One letter of opposition, from John Harrison of Sweetwater Valley Farm of Philadelphia, Tennessee, was also submitted to Progressive Dairyman. (Read: Letter to the Editor: Multiple component pricing would erode milk production in Southeast.)

In early April, a formal request was filed with the USDA, seeking a public hearing to consider implementing MCP in the two FMMOs. The request was filed by National All-Jersey (NAJ), 14 dairy cooperatives and other trade associations. (Read: Dairy groups seek multiple component pricing in Appalachian, Southeast FMMOs.)

In early May, the USDA’s Agricultural Marketing Service (AMS) laid out an action plan to considering moving ahead on the rule-making process. The schedule included a period (ending June 1) to accept additional proposals for consideration and identifying a possible hearing date of July 30. 

Subsequently, Dana Coale, deputy administrator for USDA AMS dairy programs, participated in an informational meeting in Knoxville, Tennessee, on May 16. She was joined by FMMO market administrators from FMMOs 5 and 7.

Find additional information on the USDA website.  end mark

Dave Natzke
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