The phrase, “The gorilla in the room” is often used to describe something that is obvious yet ignored. The “gorillas” in milk marketing have grown more obvious due to disruptions resulting from the COVID-19 pandemic as well as a Federal Milk Marketing Order (FMMO) system designed for a different time.

The COVID-19 pandemic taught and continues to teach numerous lessons to those of us in the dairy industry. We found out in March 2020 that the processing and packaging part of the industry could adapt but was not very nimble in doing so.

With the possibility of a USDA hearing to consider revamping the Federal Milk Marketing Order (FMMO) “Class I mover” price formula, leaders of four Midwestern dairy groups unveiled a proposal which they say will improve fluid milk pricing within the FMMO system.

Editor's note: The original article has been updated to include comments from the International Dairy Foods Association. With the two-year anniversary of the implementation of the change in the Federal Milk Marketing Order (FMMO) Class I skim milk price formula near, the National Milk Producers Federation (NMPF) is closer to asking the USDA for an emergency expedited hearing to address the issue. Proposals from other organizations regarding the Class I pricing formula and other FMMO reforms may be forthcoming as well.

Producer price differentials (PPDs) continue their slow climb out of the historically negative depths of 2020, but their complete ascension may still be a ways off.

February’s Federal Milk Marketing Order (FMMO) uniform prices and producer price differentials (PPDs) weren’t markedly different from a month earlier, based on market administrator reports released the week of March 8.

Federal Milk Marketing Orders (FMMOs) were created in the mid-1930s to bring order to milk marketed in the U.S. At the time, milk was primarily consumed in fluid form, which is classified in FMMOs as Class I for pricing purposes. As recently as 1960, 65.4% of all milk priced through FMMOs was classified as Class I milk.