The National Milk Producers Federation plans to work with Congress and USDA in an effort to change parts of the final regulation on milk marketing order reform published recently by the department.  A top priority is to change the classified pricing provisions.

"While there are some very positive aspects to the USDA proposal, including many we suggested and supported, we cannot agree with those pricing formulas offered by the department that will severely curtail dairy farmer revenue," said Jerry Kozak, NMPF CEO.

NMPF wants higher Class I differentials, similar to those proposed in 1998 by USDA in the "Option 1A" formula.  NMPF supported that option to establish Class I differentials, while USDA supported Option 1B that NMPF says would result in lower differentials.

"Even though a majority of the dairy industry supported Option 1A, USDA instead selected a modified version of Option 1B which significantly lowers Class I differentials in most areas of the country," according to NMPF.

The decisions came from a NMPF board meeting this week.  The board approved a resolution directing NMPF to pursue the changes with Congress and/or USDA to amend the order.  The final rule was published two weeks ago and is to be implemented Oct. 1.  The board also recommended that Class III product pricing formulas (for cheese) be changed..

Under the final Class III provision, producers will receive less revenue for Class III products than they now receive with existing formulas, says NMPF.  The proposed Class III formula would have lowered farm income by $188 million a year for the past five years had it been in effect, NMPF claims.

Congress may face a debate on several dairy issues this year, including efforts to expand regional price compacts.