USDA Issues Final Rule on Amendments to Federal Milk Marketing Orders

USDA Issues Final Rule on Amendments to Federal Milk Marketing Orders

Effective January 17, 2025, USDA-AMS published the Final Rule on amendments to Federal Milk Marketing Order (FMMO) pricing formulas. All 11 orders approved the final changes, obtaining the necessary two-thirds vote in favor of adoption.  USDA cites, “This final rule amends the 11 FMMOs with an implementation date of June 1, 2025, except for the amendments to skim milk composition factors, which have a later implementation date.”

As a reminder, the approved changes include:

  1. Milk composition factors will increase to 3.3% protein, 6% other solids, and 9.3% nonfat solids, effective December 2025.
  2. Barrel Cheddar will be eliminated from milk pricing formulas and the Dairy Products Mandatory Reporting Program. The change will be instituted in June 2025. After this time, only block Cheddar prices will be used to determine the monthly average cheese price.
  3. Make allowances (per pound) will increase as follows: cheese $0.2519, butter $0.2272, nonfat dry milk $0.2393, and dry whey $0.2668. Further, butterfat recovery in the Class III formula will be upped to 91%. These numbers will take effect in June 2025.
  4. Class I mover returns to the “higher of” the Class III or Class IV skim milk price. A rolling monthly Class I Extended Shelf Life (ESL) adjustment is also part of this. Both of these updates will be implemented in June 2025.
  5. Class I differentials will be altered in some regions. These modifications were approved and will also begin in June 2025.

All milk marketed on or after June 1, 2025, will be priced using these changes. The document states, “Advanced prices and pricing factors for the month of June 2025 will be announced on May 21, 2025, and class and component pricing for June 2025 will be announced on July 2, 2025.”

Similarly, for the milk composition factors, all milk marketed on or after December 1, 2025, will be priced based on these revisions. December 2025’s pricing will be as follows, “Advanced prices and pricing factors for the month of December 2025 will be announced on November 19, 2025, and class and component prices for December 2025 will be announced on December 31, 2025.”

Back in November, HighGround published a comprehensive white paper analyzing USDA’s Final Decision. This in-depth document covers everything you need to know about the upcoming pricing changes. Subscribers can access the full Final Decision analysis here. For non-subscribers, the white paper is available for purchase here.

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