Needed FMMO Reform Undermined by Make Allowance Giveaway

Jan 20, 2025

USDA recently announced that a final Federal Milk Marketing Order decision was approved by dairy farmers and cooperatives across all 11 orders through separate referenda conducted within each order. AFBF has called for changes to the Federal Milk Marketing Orders dating back to 2019.

“We’re grateful that USDA listened to not only our calls but also calls from the broader dairy industry to switch back to the ‘higher of’ Class I milk formula, increase Class I differentials, improve cheese price discovery and update milk composition factors,” said AFBF President Zippy Duvall. “However, the positive changes that will come as a result of these reforms will not be uniform for dairy farmers across the country and will be greatly offset by large, unjustified increases in make allowances.”

In October 2022, AFBF brought together representatives from a broad swath of the dairy sector, including dairy cooperatives, proprietary processors, state dairy associations and dairy farmers from across the country, for a successful first-of-its-kind industry-wide Federal Milk Marketing Order Forum, where industry consensus was reached on a variety of issues.

In addition to the consensus reached at that forum, a thorough grassroots policy process led by AFBF dairy farmer members has resulted in AFBF advocacy for a mandatory, audited survey of milk processing costs that are used to help establish make allowances. USDA instead bases make allowances on an unscientific, voluntary survey that allows processors to opt out, skewing the results in a direction that results in lower milk prices for farmers.

In fact, AFBF analysis has shown that changing the make allowance without a mandatory, audited survey could lead to unjust penalties for dairy farmers, which directly defies the intended purpose of the FMMO system.

All 11 orders approved the final decision with the required two-thirds majority. Under USDA’s interpretation of the amendment process, a “no” vote would have eliminated all existing milk pricing regulations in an order, leaving farmers with a stark choice between losing federal order protections or accepting the proposed changes.

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Video: Evolution of Beef Cattle Farming

The Clear Conversations podcast took to the road for a special episode recorded in Nashville during CattleCon, bringing listeners straight into the heart of the cattle industry. Host Tracy Sellers welcomed rancher Steve Wooten of Beatty Canyon Ranch in Colorado for a wide-ranging discussion that blended family history and sustainability, particularly as it relates to the future of beef production.

Sustainability emerged as a central theme of the conversation, a word that Wooten acknowledges can mean very different things depending on who you ask. For him, sustainability starts with the soil. Healthy soil produces healthy grass, which supports efficient cattle capable of producing year after year with minimal external inputs. It’s an approach that equally considers vegetation, animal efficiency, and long-term profitability.

That philosophy aligned naturally with Wooten’s involvement in the U.S. Roundtable for Sustainable Beef, where he served as a representative for the Colorado Cattlemen’s Association. The roundtable brings together the entire beef supply chain—from producers to retailers—along with universities, NGOs, and allied industries. Its goal is not regulation, Wooten emphasized, but collaboration, shared learning, and continuous improvement.