August 2020 Newsletter
Is It Time for FMMO Reform and Improvements to the Southeast Orders?

Negative producer price differentials (PPDs), depooling, shifts in consumer preferences and consolidation are reeking havoc on the U.S. dairy industry.
By now, I am sure that most of you are tired of the phrase "unprecedented", but there is truly no other word to describe the volatility of current dairy markets. It is an unpredictable, challenging and scary time for our industry. We have never experienced such uncertainty and many farmers are wondering, when it will come to an end?
 
The impact of COVID-19 on the dairy sector has been devastating, especially following many years of depressed milk prices. The pandemic has also highlighted cracks in our pricing system and the need for Federal Milk Marketing Order (FMMO) reform. Our industry must have a system in place that allows farmers to utilize risk management tools that minimize volatility but also reap higher prices when markets rebound.
 
The FMMO system was created in the 1930s and later reformed in the late 1990s. Initially, it was created to assure that dairy farmers receive a reasonable minimum price for their milk and gave consumers an adequate supply of milk. It was also useful for preventing wild fluctuations in price through periods of heavy and light milk production.
 
While the FMMO does have rules in place that ensure producers are paid in a timely matter, it has not slowed down consolidation of dairy farms, processing plants and cooperatives over the last twenty years. It has also dealt the southeast a bad hand. We have a rapidly growing market, however, the loss of farms and processing facilities in this region is one of the highest in the nation.
 
So what should our industry do? Is it time for FMMO reform? The southeast says yes. Southeast dairy producer groups, including Georgia Milk Producers, have formed a task force to examine current conditions and identify market functions affecting our dairy supply chain. Our goal is to develop consensus-based recommendations that support a viable dairy industry in the region. The task force has also hired a market analyst to examine the industry in the southeast over the past 20-years and the results of the FMMO reform enacted in 2000. These actions will assist with our efforts to develop useful and needed recommendations if reform is initiated.
 
American Farm Bureau Federation also believes that it is time for FMMO reform. Their FMMO Dairy Working Group recently released a final report asking producers to engage in reform and to continue momentum on the issue. Their first step is to change FMMO rules to allow for modified bloc voting, giving more dairy farmers a voice in FMMO reform (Dairy Farmers Deserve a Voice and a Vote on Policy That Impacts Their Farms).
 
As we continue to face these “unprecedented” times and more market volatility, it is important for our organization to work with other states to better position the southeast for the future. Please express your thoughts and concerns with our directors during our fall district meetings and stay connected with our organization. A unified group is powerful. Collaboration will help return profitability to the southeast dairy industry. 

Fall District Meeting schedule:
  • Sept. 11, Friday, Hillcrest Farm, Dearing at NOON, 3705 Iron Hill Rd, Dearing, GA 30808
  • Sept. 14, Monday, BriarPatch Farm, Eatonton at 7 PM, 725 Pea Ridge Rd., Eatonton GA 31024
  • Sept. 17, Thursday, Burke Co. Extension Office, Waynesboro at 7 PM, 715 West 6th St., Waynesboro 30830
  • Sept. 21, Monday, Oasis Coffee House, Montezuma at 7 PM, 310 Spaulding Rd, Montezuma, GA 31063
  • Oct. 1, Thursday The Barnstormer’s Grill, Williamson at 7 PM, 349 Jonathans Roost Rd, Williamson, GA 30292
Sincerely,
Farrah Newberry
Executive Director 
Georgia Milk Producers, Inc. 
Office: 706-310-0020 
Cell: 706-207-0168