Wisconsin Cheese Makers Association, 5117 West Terrace Drive, Suite 402, Madison, WI 53718

Phone (608) 286-1001 | Website www.wischeesemakers.org

May 30, 2023

Mr. Bruce Summers 

Administrator 

Agricultural Marketing Service 

U.S. Department of Agriculture 

1400 Independence Avenue, S.W. 

Washington, D.C. 20250 

Dear Administrator Summers:

Re: Petition of the Wisconsin Cheese Makers Association (“WCMA”) For a Hearing to 

Amend Federal Milk Marketing Orders 

In its March 28, 2023 Petition, as supplemented by letter dated April 14, 2023, the Wisconsin 

Cheese Makers Association (“WCMA”) requested that USDA hold a hearing to amend all 

make allowances in the Federal Milk Marketing Order (“FMMO”) program administered by 

Dairy Programs. We pointed out that accurate and up-to-date make allowances are absolutely 

critical to a properly functioning FMMO program, given that for Class III (cheese) and Class 

IV (butter and nonfat dry milk) products, a manufacturer is legally required by the FMMO to 

pay the farmers supplying it milk the money the manufacturer receives from selling its finished 

products to customers (as determined by monthly audited surveys of actual finished product 

prices for the core Class III and IV products), minus the cost incurred in making those products, 

as set forth in the FMMO regulations (the “make allowance”). 

Thus, it is critical that make allowances reflect the accurate, current cost of making these 

products. Yet the current make allowances were set in 2007 and 2008 based upon 2005 and 

2006 cost data. Actual manufacturing and other costs considered in make allowances have 

risen dramatically during the past 16 years, since make allowances were last revised. FMMO 

provisions have effectively stopped manufacturers from covering these higher costs through 

make allowances. 

We pointed out that this is a major problem for dairy product manufacturers like the plant 

operator members of WCMA, where the current make allowances are insufficient to cover 

plants’ costs. These everyday losses and significant cost increases are impossible to sustain. 

Farmer-owned cooperatives in this region are routinely returning dairy farmer payments with 

significant deductions from FMMO uniform minimum prices. Proprietary members of 

WCMA are absorbing losses, attempting to sell specialty cheeses at prices designed to mitigate 

losses, and/or otherwise failing to invest in plants and facilities. This is not sustainable for the 

plants, nor for dairy farmers who depend on these plants as outlets for their raw milk. 
WCMA Letter to Mr. Bruce Summers

Page 2

Wisconsin Cheese Makers Association, 5117 West Terrace Drive, Suite 402, Madison, WI 53718

Phone (608) 286-1001 | Website www.wischeesemakers.org

WCMA’s proposal asked that USDA take the requisite “regulatory action” and amend the 

manufacturing allowances for Class III and Class IV product formulas, as enumerated in 7 

C.F.R. § 1000.50, in order to reflect the substantial increase in plant manufacturing costs since

make allowances were last revised in 2008. WCMA indicated that the amendment should be 

based on record evidence that WCMA anticipates will include a new cost study that Dr. 

Stephenson was undertaking, and a study by Dr. William Schiek. 

By letter dated April 28, 2023, you indicated that USDA needed additional information 

regarding the specific make allowance values that WCMA is requesting that the Secretary 

consider for adoption. WCMA responded by letter dated May 8, 2023, stating that WCMA 

would comply with your request fully. We explained our understanding that Dr. Stephenson 

would soon complete his updated cost study, and that with that information in hand, WCMA 

would have the data sets necessary to provide the requested “specific make allowance values” 

that WCMA is asking the Secretary to consider for adoption. 

Dr. Stephenson has now completed that study. The 2023 Stephenson survey is especially 

robust, relying upon cost data from 18 cheese plants, 9 dry whey plants, 15 NFDM plants and 

13 butter plants. 

Dr. Stephenson’s 2023 cost study establishes the following 2022 weighted average costs of 

manufacture:

Cheese: 26.43 cents Dry whey: 33.61 cents NFDM: 27.50 cents Butter: 31.76 cents

Dr. Stephenson’s determination of the 2022 cost of manufacture are comparable to the 2022 

cost study by Dr. Schiek, which projected 2022 costs based upon California Department of 

Food and Agriculture audited costs surveys performed in 2016 and the changes in relevant cost 

factors since that time. Dr. Schiek’s 2022 cost study establishes the following 2022 weighted 

average costs of manufacture:

Cheese: 30.06 cents Dry whey: 29.53 cents NFDM: 26.53 cents Butter: 23.64 cents

WCMA is asking the Secretary to consider for adoption make allowances equal to the average 

of the costs of manufacture as determined by the 2023 Stephenson survey and the 2022 Schiek 

survey. These averages are as follows:

Cheese: 28.25 cents Dry whey: 31.57 cents NFDM: 27.01 cents Butter: 27.70 cents

However, in the spirit of cooperation with the dairy farmer community, WCMA is asking that 

the Secretary phase in these new make allowances over time. The first step would be to adopt 

make allowances effective January 1, 2025 equal to 50% of the difference between the current 

make allowances and the average of the costs of manufacture established by the 2023 

Stephenson study and the 2022 Schiek survey. This would establish the following make 

allowances effective January 1, 2025:

Cheese: 24.14 cents Dry whey: 25.74 cents NFDM: 21.90 cents Butter: 22.43 cents

Then, on January 1 of each of the next three years, the four make allowances would increase 
WCMA Letter to Mr. Bruce Summers

Page 3 

Wisconsin Cheese Makers Association, 5117 West Terrace Drive, Suite 402, Madison, WI 53718 

Phone (608) 286-1001 | Website www.wischeesemakers.org

by one-third of the difference between the January 1, 2025 make allowances and the average 

of the costs of manufacture established by the 2023 Stephenson study and the 2022 Schiek 

survey. Under this approach, the full make allowances based upon the 2023 Stephenson survey 

and the 2022 Schiek survey would go into effect January 1, 2028, three years after the initial 

make allowance increase on January 1, 2025. 

One final observation. Both processor and farmer groups have called for a replacement of the 

current system of updating make allowances on an unscheduled, episodic basis in reliance upon 

third party surveys, with a system providing USDA the legal authority and funds necessary to 

conduct regular, audited mandatory dairy product cost studies, resulting in the scheduled, 

periodic updating of make allowances. WCMA supports these proposals. In its proposed milk 

order amendments set forth below, WCMA has included a provision under which the make 

allowance increases set forth in the WCMA proposal would not come into effect in any given 

year if, prior to the start of that year, Congress has enacted legislation providing authority for 

mandatory audited cost surveys, and USDA has promulgated regulations implementing that 

authority and adopted make allowances pursuant thereto. 

WCMA’s Specific Proposed Order Amendments. 

Consistent with the foregoing, WCMA requests the following amendment be included by the

Secretary in calling a hearing pursuant to 7 C.F.R. § 900.1, et seq.: 

Amend 7 C.F.R. § 1000.50(l), (m), (n), (o), and (q), and add a new subsection 1000.50(r), 

applicable to all federal milk marketing orders, to provide (deletions appear as strikethroughs; additions appear in red font): 

§ 1000.50 Class prices, component prices, and advanced pricing factors. 

* * * * * 

(l) Butterfat price. The butterfat price per pound, rounded to the nearest one-hundredth cent, 

shall be the U.S. average NASS AA Butter survey price reported by the Department for the 

month, less 17.15 cents 22.43 cents effective January 1, 2025, 24.18 cents effective January 1, 

2026, 25.94 cents effective January 1, 2027, and 27.70 cents effective January 1, 2028, with 

the result multiplied by 1.211. 

(m) Nonfat solids price. The nonfat solids price per pound, rounded to the nearest onehundredth cent, shall be the U.S. average NASS nonfat dry milk survey price reported by the 

Department for the month, less 16.78 cents 21.90 cents effective January 1, 2025, 23.60 cents 

effective January 1, 2026, 25.31 cents effective January 1, 2027, and 27.01 cents effective 

January 1, 2028 and multiplying the result by 0.99. 

(n) Protein price. The protein price per pound, rounded to the nearest one-hundredth cent, shall 

be computed as follows: 

* * * * * 

(1) ... 

(2) Subtract 20.03 cents 24.14 cents effective January 1, 2025, 25.51 cents effective January 

1, 2026, 26.88 cents effective January 1, 2027, and 28.25 cents effective January 1, 2028 from 

the price computed pursuant to paragraph (n)(1) of this section and multiply the result by 1.383; 
WCMA Letter to Mr. Bruce Summers

Page 4 

Wisconsin Cheese Makers Association, 5117 West Terrace Drive, Suite 402, Madison, WI 53718 

Phone (608) 286-1001 | Website www.wischeesemakers.org

(3) Add to the amount computed pursuant to paragraph (n)(2) of this section an amount 

computed as follows: 

(i) Subtract 20.03 cents 24.14 cents effective January 1, 2025, 25.51 cents effective January 1, 

2026, 26.88 cents effective January 1, 2027, and 28.25 cents effective January 1, 2028 from 

the price computed pursuant to paragraph (n)(1) of this section and multiply the result by 1.572; 

and 

* * * * * 

(o) Other solids price. The other solids price per pound, rounded to the nearest one-hundredth 

cent, shall be the U.S. average NASS dry whey survey price reported by the Department for 

the month minus 19.91 cents 25.74 cents effective January 1, 2025, 27.68 cents effective 

January 1, 2026, 29.63 cents effective January 1, 2027, and 31.57 cents effective January 1, 

2028, with the result multiplied by 1.03. 

* * * * * 

(q)(3) An advanced butterfat price per pound rounded to the nearest one-hundredth cent, shall 

be calculated by computing a weighted average of the 2 most recent U.S. average NASS AA 

Butter survey prices announced before the 24th day of the month, subtracting 17.15 cents 22.43 

cents effective January 1, 2025, 24.18 cents effective January 1, 2026, 25.94 cents effective 

January 1, 2027, and 27.70 cents effective January 1, 2028 from this average, and multiplying 

the result by 1.211. 

* * * * * 

(r). The increase in the amounts subtracted from the NASS survey prices effective January 1 

of each year as set forth in 7 C.F.R. § 1000.50(l), (m), (n), (o), and (q) shall not become 

effective if prior to January 1 of that year the United States Department of Agriculture has been 

provided authority and funding to conduct audited dairy product cost studies, has promulgated 

regulations implementing that authority, and adopted make allowances pursuant thereto.

Please let me know if you have any questions. 

Sincerely, 

John Umhoefer, Executive Director 

Wisconsin Cheese Makers Association 

cc: Dana Coale, Administrator, Dairy Programs, AMS/USDA 

Erin Taylor, Director, Order Formulation and Enforcement Division, AMS/USDA