Michael P Sumners

Dairy Farmer

Paris, TN

 PROPOSALS FOR CONSIDERATION FOR FMMOs 5 & 7

Proposal 1: No diversions on any milk collecting transportation credits

Proposal 2: All money collected from any transportation scheme shall 

go into the producer settlement fund as Class I. Each order shall 

calculate a blend value of skim and butterfat and subtract the value 

paid out on producer as transportation credits to show uniform blend 

price.

Proposal 3: A Line Item should be included on Producer Checks 

recognizing the value of transportation dollars.

Explain the proposal. What is the disorderly marketing condition that 

the proposal is intended to address?

1) Producers in the Southeastern FMMOs have been harmed by 

opaque policies that have created and exacerbated the milk 

deficit situation in the Southeast creating inefficient economic 

outcomes and poor transparency of milk value in the marketing 

order that have harmed producers and consumers alike(Gould, 

2021).

2) Current Federal milk marketing order policies in the Southeast 

subsidize the hauling of milk from outside the region at the 

expense of local milk supplies creating an inefficient and noneconomic outcome over the last two decades by migrating milk 

hundreds of miles away.

3) As a result of current FMMO policies, farm-gate milk prices 

have been artificially suppressed, milk production in the 
Southeast has declined at a greater rate than fluid milk sales 

have decreased and consolidation in the region has outpaced

national averages (Gould, 2021).

What is the purpose of the proposal?

The purpose of the proposals is to increase transparency and 

visibility into the operations of the orders, which will allow the industry

to better understand the economic inefficiencies created by policies, 

including diversions and transportation credits.

Describe the current Federal order requirements or industry practices 

relative to the proposal.

This proposal is intended to mimic Federal order 51, which 

shows the value of State quota as a line item.

The proposal will show the direct value of the transportation

credit scheme to milk producers-much like the cost of quota is 

detailed on milk checks in Federal order 51.

In past rule changes in orders 5&7, as transportation credits 

have increased diversions have decreased.

Describe the expected impact on the industry, including on producers 

and handlers and consumers. Explain/Quantify.

1) Proposal will give more visibility to all participants.

2) If DMCA proposal is adopted I would expect IDFA White Paper

to be true as well as the White Paper written by Matt Gould

addressing impact out of order milk on Southeast milk shed.

3) The proposal is not expected to affect producers.
What are the expected effects on small businesses as defined by the 

Regulatory Flexibility Act (5 U.S.C. 601-612)? Explain/Quantify. 

Small businesses should have better information to address issues 

with handlers.

How would the proposal increase or decrease costs to producers, 

handlers, others in the marketing chain, consumers, the Market 

Administrator offices and/or the Secretary?

1) Transparency is essential in orderly marketing.

2) Orderly Marketing will give better outcomes to the market.

3) This proposal will have minimally increase in cost of 

administration by modifying current reporting schemes.

Would a pre-hearing information session be helpful to explain the 

proposal?

Yes.

_______________________________

Gould, Matthew, A Study of the Appalachian and Southeast Federal 

Milk Marketing Orders, January 2021.