(The Center Square) – One of Wisconsin’s largest dairy groups says the latest milk marketing proposal isn’t a win-win for Wisconsin dairy farmers, but it’s not a guaranteed loss either.
The Edge Dairy Cooperative sent a letter to its members, explaining their stance on the final draft of the pricing formulas used by the Federal Milk Marketing Order system.
“While not all of our proposals were included in the final decision, and we believe more could have been done to enhance the pricing formula, we are satisfied that the changes do not negatively impact our dairy farmer members,” Edge CEO Tim Trotter said.
The Milk Marketing Orders essentially set the prices, and the rules for the system, where the UDA buys milk from dairy farmers and groups like the Edge Co-op.
The new rules, as expected, are very specific, and deal with everything from butter fat in milk, to the specific classes of milk, to the difference between using 500-pound blocks of cheese to set prices versus 40-pound blocks of cheese.
The proposed Milk Marketing Order also treats farmers in different areas of the country differently.
Edge said one of the regional changes, keeping the $1.60 base differential and adopting modified location specific Class I differential values, may benefit dairy farmers in Wisconsin and the Midwest.
“This decision increases the spread between the differentials in the Midwest/Mideast region and the eastern/southeastern U.S., providing additional incentives and opportunities for milk producers in the Midwest/Mideast region to serve deficit coastal markets,” Edge told its members in its letter.
Trotter said that’s one provision that could help Wisconsin dairymen, but there are others that certainly won’t.
“In aggregate, we believe the proposed reform would slightly decrease the minimum regulated price private milk buyers have to pay to pooled milk producers in the Upper Midwest order and would slightly increase the price to producers in the Central and Mideast orders,” Trotter added. “In all cases, we expect the impact on milk checks, after accounting for impact to over-order premiums, to be neutral or positive.”