Under present rules, the Federal Milk Marketing Order allows a milk bottler of any size to avoid paying into the Federal order pools in its market if it produces all of its own milk. The National Milk Producers Federation says this regulatory exemption provides a large pricing advantage and reduces average pay prices for other producers. Hearings were held last May and, as a result, the Department of Agriculture has issued a recommended decision to adopt amendments to the producer-handler definition in all Federal milk marketing orders.
The proposed new rules would limit this exemption to plants with less than 3 million pounds of total monthly bottled milk sales. It would also tighten the requirements in the Arizona and Pacific Northwest markets, which previously had limited producer-handlers to 3 million pounds of sales in each market.
Once final, this ruling will accomplish what National Milk Producers Federation sought in its initial petition: to stop about a half-dozen large producer-handlers from cherry-picking Class I milk sales at the expense of other producers in Federal order pools, and to discourage other handlers from growing through the use of this unfair exemption. Under the proposed change, these plants will contribute to the pool just like any other large Class I handler.
The public has 60 days to file comments.