February 22, 2024

The Honorable Thomas J. Vilsack

Secretary, U.S. Department of Agriculture

200A Whitten Building

1400 Independence Avenue, S.W.

Washington, D.C. 20250

RE: Request for Emergency Return to “Higher-of” Class I Mover

Dear Secretary Vilsack,

On behalf of our members across the country, we thank you for the U.S. Department of

Agriculture’s continuing effort to provide price stability and transparency to dairy farmers. U.S.

dairy farm families face many challenges as they make their critical contribution to the wellbeing of our nation.

One of those challenges is the ongoing milk price spreads that have substantially lowered farmer

milk prices under the current “average of” Class I mover formula. The American Farm Bureau

Federation and National Farmers Union request that you address this challenge by issuing an

interim final decision in the current federal milk marketing order hearing process that returns the

Class I mover formula to the “higher-of” the Class III or IV calculations, as it was before the

2018 farm bill.

The 2018 farm bill included a provision that swapped the higher-of the advanced Class III or IV

skim milk price formula for the simple average-of advanced Class III and IV skim milk formulas

plus 74 cents. This was intended to produce a roughly equal long-term Class I milk price. This

statutory change was made at the request of dairy processors and dairy cooperatives and was

intended as a revenue-neutral way to improve risk management opportunities for beverage milk.

The current formula was based on a quick legislative decision and not based on a hearing record

of demonstrated need; it has also not turned out to be revenue neutral for dairy farmers. A return

to the “higher-of” is supported by the record in the current hearing, as well as by the rulemaking

at the time it was first established in 2000.

Disruptive market conditions during the recent pandemic exposed and exacerbated a temporary

but serious shortage of block cheddar cheese production. This led to very high Class III values, a

huge imbalance between Class III and Class IV prices, and over $700 million in Class I revenue

losses to producers in the 11 federal order pools in 2020 alone resulting from the “average-of

plus” Class I mover. This, along with the delay associated with advanced pricing, resulted in

manufacturing milk prices higher than the market blends, leading to massive de-pooling of

producer milk by manufacturing plants to capture those higher market prices. These large

negative producer price differentials created significant disparities among the milk checks of

different groups of farmers. These losses in pool value have continued through 2023 and into

REC'D- USDA/OALJ/HCO

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Docket: 23-J-0067
2024, as Class IV prices have become the driver of the dairy market and the gap between Class

III and Class IV prices has flipped, but remained large, with no end in sight. As of December

2023, cumulative pool losses have surpassed $1 billion since the formula went into effect in May

2019, including pool losses of $50 million in November 2023 and $38 million in December of

2023. Dairy farmers with pooled milk face ongoing threats of decreased milk checks linked to

the current Class I mover formula.

The members of both our organizations, through our respective grassroots policy development

processes, have unanimously expressed the high priority they put on a speedy return to the

“higher-of” Class I mover.

AFBF policy states: “(G)iven the circumstances of the Class I mover changes in the 2018 farm

bill, we support returning to the Class I milk mover formula to the higher-of Class III or IV in the

most expedient manner possible.”

A special order of business adopted by the delegates at the 2023 National Farmers Union

Convention supports the immediate return to a Class I pricing formula based on the higher-of

Class III or Class VI.

In a forum held in Kansas City in October 2022 to address federal milk marketing order issues,

the recommendation with greatest support from the 300-dairy farmer-majority participants was

for a return to the “higher-of” Class I formula.

The FMMO hearing process has completed only step 5 of a 12-step process before changes

would potentially go into effect for our dairy farmers. With about $55 million in Class I losses

related to the current Class I formula in January 2024 alone, each additional month without a

change poses a threat to dairy farmers’ livelihoods. An interim final decision could speed

implementation of this change by six months or more.

We understand that USDA is undertaking a comprehensive process of amending federal orders;

however, dairy farmers remain stuck with current pricing regulations until USDA publishes a

final rule. Current market dynamics underscore the need for expedited return to the “higher-of”

Class I mover. The current Class I mover was a well-intentioned but misguided policy that has

reduced dairy farmer income. Emergency implementation of the “higher-of” Class I mover

formula will staunch persistent losses associated with a policy that has left dairy farmers

struggling to make ends meet.

Sincerely,

Zippy Duvall Rob Larew

President, American Farm Bureau Federation President, National Farmers Union
Page 1 of 2

CERTIFICATE OF SERVICE

Eleven Federal Milk Marketing Orders 

Docket No.: 23-J-0067

Having personal knowledge of the foregoing, I declare under penalty of perjury that the 

information herein is true and correct, and this is to certify that a copy of the REQUEST FOR 

EMERGENCY RETURN TO HIGHER-OF CLASS I MOVER has been furnished and was

served upon the following parties by electronic mail on February 28, 2024 by the following:

USDA (OGC)

Brian Hill, OGC

Brian.Hill1@usda.gov

Michelle McMurtray, OGC

Michelle.McMurtray@usda.gov

Donna Erwin, OGC

Donna.Erwin@usda.gov

Carla Wagner, OGC

Carla.Wagner@usda.gov

USDA (OSEC)

Katharine Ferguson

Katharine.Ferguson@usda.gov

USDA (AMS) Dairy Programs

Dana H. Coale, Deputy Administrator

Dana.Coale@usda.gov

Erin Taylor, Director Order Formulation and

 Enforcement Division

Erin.Taylor@usda.gov

AMS - FMMO Hearing

FMMOHearing@usda.gov

Erick Metzger 

General Manager

National All-Jersey, Inc. 

6486 East Main Street

Reynoldsburg, OH 43068

E-mail: emetzger@usjersey.com

Counsel for National All-Jersey, Inc.

John H. Vetne

E-mail: johnvetne@gmail.com

Wendy M. Yoviene

Baker, Donelson, Berman, Caldwell, 

 & Berkowitz PC

901 K Street, NW, Suite 900

Washington, DC 20001 

E-mail: wyoviene@bakerdonelson.com

Counsel for National Milk Producers 

Federation

Stoel Rives LLP

101 S. Capitol Blvd., Suite 1900

Boise, ID 83702

Bradley R. Prowant

E-mail: bradley.prowant@stoel.com

Nicole C. Hancock

E-mail: nicole.hancock@stoel.com

Counsel for International Dairy Foods 

Association

Steven J. Rosenbaum

Covington & Burling LLP

1201 Pennsylvania Avenue, NW

Washington, DC 20004

E-mail: srosenbaum@cov.com
CERTIFICATE OF SERVICE (cont’d)

Eleven Federal Milk Marketing Orders 

Docket No.: 23-J-0067

Page 2 of 2

Counsel for Milk Innovations Group

Davis Wright Tremaine LLP

920 Fifth Avenue, Suite 3300

Seattle, WA 98104

Charles M. English, Jr.

E-mail: chipenenglish@dwt.com

Ashley L. Vulin

E-mail: ashleyvulin@dwt.com

Grace Bulger

E-mail: gracebulger@dwt.com

Counsel for Select Milk Producers, Inc.

Ryan K. Miltner

The Miltner Law Firm, LLC 

100 North Main Street

P.O. Box 477 

New Knoxville, OH 45871

E-mail: ryan@miltnerlawfirm.com

 ryan@miltner-reed.com

American Farm Bureau Federation

600 Maryland Avenue SW, Suite 1000W

Washington, DC 20024

Sam Kieffer

E-mail: sk@fb.org

Roger Cryan

E-mail: rogerc@fb.org

Danny Munch

E-mail: dmunch@fb.org

Erin M. Anthony

E-mail: erin@fb.org

Mike Tomko

E-mail: miket@fb.org

Lucas S. Sjostrom

E-mail: lucas@mnmilk.org

Mike Stranz

E-mail: mstranz@nfudc.org

E-mail: sleperjp@gmail.com

Marin Bozic

E-mail: marin@bozic.io

Respectfully Submitted, 

____________________________________

Wanda Mosby, Legal Assistant

USDA/Office of Administrative Law Judges

Hearing Clerk’s Office, Room 1031-S

1400 Independence Ave., SW

Washington, DC 20250-9203