Federal order milk price increase takes effect

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WASHINGTON – A new pricing formula for milk used to make cheese took effect April 1, despite a last-minute effort by four dairy co-op processors to get a court to stop the hike.

Plaintiffs. Northwest Dairy Association, Northwest Independent Milk Producers Association, Tillamook County Creamery Association, Farmers Cooperative Creamery, and Agri-Mark Inc. sought an injunction in U.S. District Court in Washington D.C. to prevent the USDA from implementing the Class III milk price increase.

The co-ops also sought a new hearing to present additional evidence regarding the skim milk portion of the Class III formula.

The injunction and hearing request were denied by Judge Royce Lamberth.

Doesn’t like Calif. impact. The plaintiffs claimed the new formula gives California processors an unfair advantage. The new formulas would raise the minimum price of milk to federally regulated cheese plants, the complaint said.

The USDA “cannot set prices for areas it regulates without considering the impact California has on dairy farmers and manufacturers in other states who are subject to the federal order system,” said Doug Marshall, senior vice president of Northwest Dairy Association.

Other co-ops back USDA. On the other side of the fence, Dairy Farmers of America, National Farmers Organization and Michigan Milk Producers Association voiced their support of the USDA’s implementation.

“Their proposal, if agreed to by the judge, would have cost all dairy farmers across the federal order system over $6 million in April,” said Elvin Hollon, Dairy Farmers of America director of fluid marketing and economic analysis.

“In fact it would have eliminated the only real price improvement portion of the decision, while keeping other changes that lowered prices to every farmer.”

Judge Royce Lamberth interpreted the Secretary’s decision, as giving fair consideration to the effect of the California State Order on federal order pricing.

He also said that, based on evidence presented by DFA and the other interveners, more harm would come to the remainder of the industry than benefit to the plaintiffs.

Every penny counts. DFA believes that, even though the pricing formulas will raise prices to DFA’s own cheese plants, the positive effect on U.S. dairy farmer incomes far outweigh the losses.

“While this decision represents a modest price increase for farmers, every penny counts,” said Gary Hanman, DFA’s CEO.

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