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Senate Hearing Focuses On Need To Modernize Federal Milk Orders

The growing need to modernize the federal milk marketing order system was the focus of a Senate Agriculture dairy subcommittee hearing here Wednesday.

The federal order system “cannot adapt to market conditions and thus is not fairly cmpensating our dairy farmers,” said US Sen. Kirsten Gillibrand, chair of the livestock, dairy, poultry, local food systems, and food safety and security subcommittee of the Senate Ag Committee.

The current federal order system “is confusing, convoluted, and too difficult to fully understand,” Gillibrand said. “The system is inadequate and out of date; we are using an almost 100-year-old system, which had its last major reform more than 20 years ago, for pricing for an industry where no dairy farmer is running their farm the way they would’ve 100 years ago.”

Jim Davenport and his wife, Karen, have a 64 milking cow dairy in Ancramdale, NY, are members of Agri-Mark, and one of nine farmer owners of Hudson Valley Fresh, a fluid and Class II processing company.

Davenport feels that the current pricing system is helpful to processors because, thanks to the maturing cheese and butter/powder futures markets, they can hedge to protect against price swings. For the producer, some kind of safety valve against “huge product price swings like we saw with COVID could be worked into the calculations.” Also, continuing to add data regarding prices over time, while tossing out “outlier” product prices from the equation, would be beneficial.

For small farmers, “I feel completely eliminating the federal order system would be suicide,” Davenport said. “Without a federal order system to provide order in the marketplace, farmers could not be sure of a home for their milk or that a fair price for their labor be paid.”

Christina Zuiderveen, an Iowa dairy farmer who is a member of Edge Dairy Farmer Cooperative, is advocating for changes to the federal order system “because I want a fair system where everyone can compete on a level playing field.

“In 2020, cheese prices were very high. We ship our milk to a cheese processor, so our milk price was high, and we were able to pay down debt and grow our operations,” Zuiderveen said. “Meanwhile, some of our neighbors were forced to implement cost-cutting measures to stay afloat. I have spoken to dairy farmers all across Iowa who are struggling because they are paid far less for their milk because they are not paid solely on the cheese price.”
Zuiderveen has family in California, Indiana and Michigan who face the same problem. On the surface, it seems that pooling rules are the problem that led cheese makers to pull unprecedented volumes of milk out of federal orders last year, but the “deeper issue” is that federal orders “do not provide mar-

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