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Proposal to Amend Federal Milk Marketing Orders

On September 29, 2015, OTA filed a request with the USDA to amend the Federal Milk Marketing Order system to recognize organic dairy as the separate and distinct industry it is. 

The FMMO system was originally created to ensure that prices paid for milk supported both an adequate supply of milk to consumers and a fair price to milk producers. However, the current system never anticipated organic dairy, which has a distinct supply chain and unique producer contracts.

The Organic Foods Production Act of 1990 (OFPA) established certified organic dairy as a separate and distinct product from conventional dairy that today receives no benefit from the FMMO system.

Simple changes are needed to amend FMMOs in order to better support the growth of the organic industry. A change to the policy will ensure all dairy farmers – organic and non-organic alike – are paid fairly for the milk they produce and its full economic value goes to the proper supply chain.

An amendment to the FMMO policy would benefit members of the organic industry at all parts of the supply chain from producer to consumer, and is not an exemption but rather an alternate audited mechanism for meeting the purpose of FMMOs.

The proposal would establish an alternative mechanism that recognizes premiums paid by organic processors to organic dairy farmers that exceeds what would otherwise be their obligation to the pool, plus some. The proposal would not exempt organic milk from the FMMOs, but rather provide for this alternative, audited mechanism for USDA certified organic milk handlers to meet their minimum price obligations under the various Orders.         

If adopted the proposal would retain USDA’s information gathering and dissemination regarding organic milk.

“The prevailing view shaping increased activities to boost the rate of conventional dairies transitioning to organic certification is that greater efforts this year and in the near future are necessary to ensure organic milk supplies will be available in the years ahead to meet increased demand. Failing to have sufficient organic milk supplies to meet increasing consumer demand could lead to a consumer backlash away from organic milk, a development that would be challenging to reverse.”

                    --   USDA Agricultural Marketing Service, Organic Dairy Market News