Wisconsin Ag Connection - Revitalizing Dairy: National Milk Producers Federation Proposes Price Updates to Boost Farm Profitability

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Revitalizing Dairy: National Milk Producers Federation Proposes Price Updates to Boost Farm Profitability
Wisconsin Ag Connection - 06/01/2023

In a bid to combat the ongoing decline of dairy farms in Wisconsin, the National Milk Producers Federation is spearheading a proposal to update the federal system for pricing and selling milk. The state, which once boasted over 16,000 dairy farms, now has fewer than 6,000 according to a recent report from the U.S. Department of Agriculture. The federation's proposed changes to the federal milk marketing order system aim to address the profitability challenges faced by individual farmers.

The suggested modifications include revising the price formula for beverage milk, updating standards for milk components, and increasing make allowances for dairy products like butter, cheese, nonfat dry milk, and dry whey. The federation argues that these changes are crucial to accurately reflect the costs associated with transforming raw milk into finished products, considering the industry's transformation over the past two decades.

While the proposed adjustments are seen as a step in the right direction by many industry experts, some farmer advocates have expressed concerns. They argue that the current pricing system fails to account for the rising production costs faced by farmers. These advocates believe that any changes made to benefit processing companies should also include provisions to support farmers' cost of production.

It remains to be seen whether the proposed updates will be sufficient to reverse the profitability challenges faced by the dairy industry. However, supporters believe that these changes will provide a more favorable landscape for dairy farms, potentially mitigating the financial burdens they currently face. The decision to consider these proposals ultimately lies with the USDA, which will determine whether to hold a future hearing on the matter.

The National Milk Producers Federation aims to revitalize the dairy industry by proposing updates to the federal milk pricing system. Their recommendations seek to address the declining number of dairy farms in Wisconsin and the challenges faced by farmers in maintaining profitability. While the proposed changes have received both support and criticism, industry experts agree that they represent an important step toward improving the situation for dairy farmers. Ultimately, the USDA will play a crucial role in deciding whether to proceed with these proposed updates and initiate a hearing to discuss the potential changes further.

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