Oklahoma Farm Report masthead graphic with wheat on the left and cattle on the right.
Howdy Neighbors!
Ron Hays, Director of Farm and Ranch Programming, Radio Oklahoma Ag Network  |  2401 Exchange Ave, Suite F, Oklahoma City, Ok 73108  |  (405) 601-9211

advertisements
   
   
   
   
   

Agricultural News


Dairy Farmers to Seek Emergency USDA Hearing on Class I Mover Reform

Mon, 26 Apr 2021 08:00:49 CDT

Dairy Farmers to Seek Emergency USDA Hearing on Class I Mover Reform The National Milk Producers Federation’s Board of Directors voted today to request an emergency USDA hearing on a Federal Milk Marketing Order proposal to restore fairness for farmers in the Class I fluid milk price mover. The endorsement of the board, which represents dairy farmers and cooperatives nationwide, follows approval from the organization’s Executive Committee last week.

The NMPF plan would ensure that farmers recover lost revenue and establish more equitable distribution of risk among dairy farmers and processors. The current mover was adopted in the 2018 farm bill and intended to be revenue neutral while facilitating increased price risk management by fluid milk bottlers. But the new Class I mover contributed to disorderly marketing conditions last year during the height of the pandemic and cost dairy farmers over $725 million in lost income. NMPF’s proposal would help recoup the lost revenue and ensure that neither farmers nor processors are disproportionately harmed by future significant price disruptions.

“As the COVID-19 experience has shown, market stresses can shift the mover in ways that affect dairy farmers much more than processors. This was not the intent of the Class I mover formula negotiated within the industry,” said Randy Mooney, the dairy farmer chairman of NMPF’s Board of Directors. “The current mover was explicitly developed to be a revenue-neutral solution to the concerns of fluid milk processors about hedging their price risk, with equity among market participants a stated goal.

“Dairy farmers were pleased with the previous method of determining Class I prices and had no need to change it, but we tried to accommodate the concerns of fluid processors for better risk management. Unfortunately, the severe imbalances we’ve seen in the past year plainly show that a modified approach is necessary. We will urge USDA to adopt our plan to restore equity and create more orderly marketing conditions,” Mooney said.

While the current Class I mover was designed to improve the ability of fluid milk handlers to hedge milk prices using the futures market, it was also expected to be revenue-neutral compared to the formula it replaced. But that has not been the case. The significant gaps between Class III and IV prices that developed during the pandemic exposed dairy farmers to losses that were not experienced by processors, showing the need for a formula that better accounts for disorderly market conditions.

NMPF’s proposal would modify the current Class I mover, which adds $0.74/cwt to the monthly average of Classes III and IV, by adjusting this amount every two years based on conditions over the prior 24 months, with the current mover remaining the floor. NMPF’s request will be to limit the hearing specifically to proposed changes to the mover, after which USDA would have 30 days to issue an action plan that would determine whether USDA would act on an emergency basis.


   

 

WebReadyTM Powered by WireReady® NSI

 


Top Agricultural News

  • Oklahoma Grain Elevator Cash Bids as of 2:00 p.m, Thursday, May 13  Thu, 13 May 2021 19:11:32 CDT
  • OSU's Kim Anderson Analyzes the May WASDE Report   Thu, 13 May 2021 19:06:32 CDT
  • Latest U.S. Drought Monitor Shows Some Improvement in Many Areas of The Country, Except For The Southwest  Thu, 13 May 2021 15:22:19 CDT
  • Kansas Wheat Alliance President Daryl Strouts Says Kansas Crop is in Good Shape  Thu, 13 May 2021 15:10:23 CDT
  • Thursday, May 13, 2021 Market Wrap-Up with Justin Lewis  Thu, 13 May 2021 13:56:23 CDT
  • USDA-NIFA, CDC and Cooperative Extension Team Up for Vaccine Education in Rural America  Thu, 13 May 2021 10:35:15 CDT
  • Dallas, San Antonio and Oklahoma City to face 'nasty' Severe Weather  Thu, 13 May 2021 09:28:28 CDT
  • Oklahoma Ag Secretary Blayne Arthur Says There is a Positive Dynamic in The Oklahoma Ag Industry Today  Thu, 13 May 2021 08:59:57 CDT

  • More Headlines...

       

    Ron salutes our daily email sponsors!

    Oklahoma Ag Credit Oklahoma Farm Bureau National Livestock Credit Ag Mediation Program P&K Equipment Oklahoma City Farm Show Union Mutual Stillwater Milling Oklahoma Cattlemen's Association KIS FUTURES, INC.

    Our Road to Rural Prosperity sponsors!

    Banc First OPSRC ORWA TPAOO TPAOO

    Search OklahomaFarmReport.com


       
       
    © 2008-2021 Oklahoma Farm Report
    Email Ron   |   Newsletter Signup   |    Current Spots   |    Program Links

    WebReady powered by WireReady® Inc.