NWOOD, Iowa — Edge Dairy Farmer Cooperative, the third largest dairy cooperative in the country based on milk volume, hosted a workshop on meaningful milk pricing reform in northwest Iowa this week. The session aimed to shed light on the cooperative’s efforts to reform the U.S. milk pricing system through the Federal Milk Marketing Order hearing process and legislatively through the farm bill. American Foods Group sponsored the event.
Karen Gefvert, Edge director of government affairs, and Lucas Sjostrom, Edge managing director, both shared how the cooperative is working to advance solutions on priority issues for dairy farmers throughout the Upper Midwest. Through its reform proposals, Edge aims to improve price discovery, enhance risk management opportunities for farmers and processors and sustain federal orders and their benefits to the dairy community.
“The modern dairy farmer deals with a wide number of variables in their day-to-day operations,” said Sjostrom. “Utilizing effective risk management takes away some of the unknown and allows farmers to do what they do best — produce high-quality milk to feed our communities. That’s what Edge is focusing on throughout this process.”
During the workshop, the Edge team shared details of their efforts to ensure the viability of federal orders in the future and install protections on milk outside the federal orders, such as written contracts, equal incentives, more transparent pricing, contract change notices and other key aspects of the farmer-processor relationship. This proposal would apply to all milk marketed in the U.S. to create a more fair and equitable system and build a stronger dairy supply chain.
Sjostrom also shared Edge’s involvement throughout the FMMO hearing process, including its various proposals on the topics discussed in the hearing. In addition to Edge’s Class III Plus model for the Class I Base Skim Milk Price, Edge proposals included:
- Updating the fat components alongside updated protein numbers
- Delaying any changes that would impact pooled milk prices for 15.5 months, to ensure open interest and opportunities to participate in markets are not interrupted
- Modernizing the Class III pricing system to include both blocks and barrels of Cheddar cheese, rounded to the nearest 5% of production
- Standing against make allowance increases, which equally lower milk prices for all farmers
- Improving the Class I mover by introducing the Class III Plus program, which includes the removal of advanced pricing, to price milk on America’s most-used dairy commodity – cheese
Sjostrom also shared the current status of the hearing. The hearing started on Aug. 23 and is currently in recess due to scheduling conflicts with the event venue. Edge expects the hearings to begin again in late November 2023, assuming the federal government signs funding into law by the Nov. 17 deadline.
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Gefvert highlighted the path forward to securing legislative change through the farm bill.
“There is still much to be done to ensure farmers and processors build more trust and transparency,” Gefvert said. “Farmers and processors need strong, lasting partnerships to build truly sustainable food systems. We look forward to working alongside our farmers throughout the process to ensure their voice — the voice of milk — is heard by stakeholders and thought leaders.”
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