USDA to issue final rule on Class III, IV price formulas

Source: International Dairy Foods Association


More than four years after the interim rule comment period closed, USDA will issue this week a final rule amending the Class III and Class IV product price formulas in all federal milk marketing orders. The decision will finalize the interim partial final rule with no changes to the price formulas that USDA announced in August 2008 and implemented two months later.

The 2008 decision amended the make allowances for cheese, butter, nonfat dry milk and dry whey powder. Specifically, the decision adopted the following make allowances: cheese – 20.03¢/lb.; butter – 17.15¢/lb., nonfat dry milk – 16.78¢/lb.; and dry whey – 19.91¢/lb.

The decision also increased the butterfat yield factor in the butterfat price formula to 1.211, up from 1.20.

"The partial part of the rule implemented in October 2008 meant that three proposals were to be addressed in a separate decision," explained Bob Yonkers, IDFA vice president and chief economist. "This rule will terminate any further action on the three proposals that were not addressed."

IDFA had opposed the three proposals, which were seeking to establish a manufacturing cost survey, an energy cost adjustor and a cost add-on.

USDA will conduct a referendum of dairy producers on the final rule in the coming month to complete the process.