01/10/06 Milk market order amendment battles

01/10/06 Milk market order amendment battles

It was last month that U.S.D.A released its final rule on amendments to two federal milk marketing orders. And in the view of some dairy industry insiders like Elvin Hollon of the Dairy Farmers of America, it changed the pricing advantage enjoyed by many of the major producer-handlers in the western U.S. The rule puts those producers covered in the Pacific Northwest and Arizona-Las Vegas milk marketing orders that market milk from their farm directly to consumers and have more than three million pounds of sales in an individual marketing area under the pooling and pricing provisions of those specific orders. Hollon says what was interesting about the process is yes, producers covered under the marketing orders did vote on the matter. But it wasn't unanimous. In fact, Hollon says even before the decision was voted on, producer-handlers took the matter to court. HOLLON: They asked a federal district court judge to issue a temporary restraining order arguing many of the same points that they argued in the hearing. The Judge issued a ruling that said you haven't convinced me, and I don't think you can convince the next court. Secretary does have the ability to further regulate them. Furthermore, there is going to be more producers harmed if your view prevails then if the Secretary's view prevails. So I'm not going to grant the preliminary restraining order, (and) let things proceed. But this battle may be a precursor of one that is looming. U.S.D.A. is proposing amendments to all federal milk marketing orders & specifically, allowances to Class III and Class IV milk price formula manufacturing allowances. Hollon says U.S.D.A. is scheduled to hold a national public hearing on the allowances later this month. Those allowances are periodically reviewed through U.S.D.A. hearings, and they are usually & well, controversial. HOLLON: Do they have the right yield figure in them? Is there shrinking involved somewhere? What kind of return do you get when you sell cheese, butter, and powder? And so we have these hearings every so often that look at making allowances. They're obviously very contentious. Most dairy farmers won't make allowances to be set lower, because that makes the milk price higher. And most manufactures won't make allowances to be set high, because that makes the milk prices lower. So naturally, any time you go into a hearing, you've got two views that are in opposite directions. But if you're going to have formula pricing, and you're going to depend on brick and mortar to buy and process milk, you have to make sure those allowances are there. And I think that is what the Secretary is saying. They haven't been changed in a while, they haven't been reviewed in a while. We're going to review them. And Hollon points out that the controversy could mean the results of the marketing order allowance hearing may not be known until this summer or fall.
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