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Dairy economist is concerned about what milk pricing consensus might look like

Dairy groups are continuing to talk about needed reforms in milk pricing ahead of the next farm bill.  Ag Secretary Tom Vilsack has already said the industry needs to form a consensus before he would open up a federal milk marketing order hearing, but University of Minnesota dairy economist Dr. Marin Bozic cautions about what that consensus might look like. “So, with the Class I mover reform from 2018 can caution this, is that they should not define consensus to narrowly and crafting policies behind tightly-closed doors is a bad deal and the resulting reform may suffer from a fragile or flawed design. We need a broad and open debate.”

He says the long-term challenge for achieving their goals is the ability of processors to de-pool milk from the federal orders. “And as manufacturing milk rises and fluid milk sales drop, they will more and more frequently be depooling so that’s why we believe that perhaps there is a separate need for a separate statute that will specifically address the relationships, and provide some meaningful guard rails for the relationships between processors and producers.”

Bozic commented during Monday’s Edge Dairy Farmers Cooperative announcement outlining what they would like to see for future dairy pricing.