Most Sweeping Milk Marketing Order in Two Decades Takes Effect

USDA/FPAC photo by Preston Keres

Updated Federal Milk Marketing Orders (FMMOs) change how milk is priced across all 11 federal milk marketing regions. These reforms intend to create a more equitable and transparent pricing system. They address outdated components of the FMMOs.

Notable changes include:

>> The new Federal Milk Marketing Order (FMMO) changes include key updates aimed at improving fairness and accuracy in milk pricing.

>> The Class I milk pricing formula reverts to the “higher-of” method, using the higher of Class III or IV skim milk prices, which should benefit fluid milk producers.

>> Manufacturing allowances were updated to reflect current processing costs for cheese, butter, nonfat dry milk, and dry whey.
>>>> Cheese: $0.2519 per pound
>>>> Butter: $0.2272 per pound
>>>> Nonfat Dry Milk: $0.2393 per pound
>>>> Dry Whey: $0.2668 per pound

>> The 500-pound barrel cheddar cheese has been removed from pricing surveys, leaving only 40-pound block cheddar to determine Class III prices.

>> Class I differentials were revised to better account for transportation and distribution costs in the fluid milk market.

>> Changes to the skim milk composition factors—shifting to 3.3% true protein, 6.0% other solids, and 9.3% nonfat solids—will be delayed until December 1, 2025. This gives processors time to adjust.

Read more bout the new Federal Milk Marketing Order here.