USDA is out with its proposed reforms to federal dairy pricing. The proposals still must be ratified by producers, but the National Milk Producers Federation won some key changes, most notably in how Class 1, or fluid milk, is priced. 

USDA is proposing to scrap a formula introduced to the federal milk marketing order system in the 2018 farm bill that has priced Class 1 74 cents above the average of Class 3 (milk sold for cheese) and Class 4 (butter and milk powder). 

Instead, Class 1 would again be priced as the higher of Class 3 and 4, plus a differential. 

“Based on our initial reading, NMPF is heartened that much of what we proposed after more than two years of policy development, and another year of testimony and explanation, is reflected in” in the USDA proposals, NMPF President and CEO Gregg Doud said in a statement. 

On Capitol Hill, Sen. Kirsten Gillibrand, D-N.Y., said the USDA proposals “recognize that the dairy pricing system is not working for our farmers and has not performed as intended since Congress changed it” in the last farm bill. Gillibrand and a bipartisan group of 12 other senators recently wrote USDA pushing for the change in the pricing formula. 

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