AMS Release No. 012-03

Becky Unkenholz (202) 720-8998

becky.unkenholz@usda.gov

Billy Cox (202) 720-8998

billy.cox@usda.gov

WASHINGTON, Feb.11, 2003 -- Producers supplying milk for each of the 11 Federal milk markets have approved amendments to the current Class III and IV Federal milk order pricing formulas. USDA determined producer approval by polling the producer cooperative associations in nine of the markets, and by conducting referenda in the Northeast and Mideast markets. The amended orders will become effective for milk marketed on or after April 1, 2003.

Today's final rule culminates a process that began with the 1996 Farm Bill. Historically, USDA established minimum prices under Federal orders for milk used in manufacturing by surveying the prices paid for manufacturing grade milk by unregulated plants in Minnesota and Wisconsin. However, by the late 1990s, declining supplies of manufacturing grade milk necessitated that a new procedure be developed to determine the value of milk used in manufacturing. As part of a comprehensive effort to consolidate and reform Federal milk marketing orders under the 1996 Farm Bill, USDA developed pricing formulas for Class III and Class IV milk based on wholesale prices of manufactured dairy products. These pricing formulas were implemented on Jan. 1, 2000, as required by the 1996 Farm Bill.

Congress mandated that USDA review the pricing formulas following the reform effort. A public hearing was held May 8-12, 2000, to consider proposals to change the formulas. Effective Jan. 1, 2001, USDA issued revised formulas that were enjoined by a U.S. District Court at the end of January. In October 2001, following the court injunction, USDA issued a recommended decision to alter the pricing formulas. A final decision altering the formulas was issued Oct. 25, 2002, and printed in the Federal Register Nov. 7, 2002.

The milk marketing order program ensures the fair marketing and pricing of milk. Milk marketing orders classify milk by use, set minimum prices that handlers must pay for each class of milk, and provide for paying average prices to all dairy farmers who supply a marketing area.

For copies of this final rule and additional information, contact any market administrator office, listed below. The final rule and additional background information can be accessed on the web at http://www.ams.usda.gov/dairy.

The following market administrators can provide additional information about the decision

.Erik F. Rasmussen

USDA/AMS/Dairy Programs

P.O. Box 1478 (FT Point Station), Boston, MA. 02205-1478

Tel. (617) 542-8966; email: maboston@fedmilk1.com

Appalachian: Harold H. Friedly, Jr. (Acting)

USDA/AMS/Dairy Programs

P.O. Box 18030, Louisville, KY. 40261-0030

Tel. (502) 499-0040; email: fo5@malouisville.com

Florida and Southeast: Sue. L. Mosley

USDA/AMS/Dairy Programs

P.O. Box 1208, Norcross, GA. 30091-1208

Tel. (770) 448-1194; email: smosley@fmmatlanta.com

Upper Midwest: H. Paul Kyburz

USDA/AMS/Dairy Programs

Suite 210, 4570 West 77th St., Minneapolis, MN. 55435-5037

Tel. (952) 831-5292; email: pkyburz@fmma30.com

Central: Donald R. Nicholson

USDA/AMS/Dairy Programs

P.O. Box 14650, Shawnee Mission, KS. 66285-4650

Tel. (913) 495-9300; email: donald.nicholson@fmmacentral.com

Mideast: David Z. Walker

USDA/AMS/Dairy Programs

P.O. Box 30128, Cleveland, OH. 44130-0128

Tel. (440) 826-3220; email: dwalker@fmmaclev.com

Pacific Northwest, Arizona-Las Vegas, & Western: James R. Daugherty

USDA/AMS/Dairy Programs

Building J, Suite 102; 1930-220th St., SE., Bothell, WA. 98021-8471

Tel. (425) 487-6009; email: jdaugherty@fmmaseattle.com

Southwest: J. Richard Fleming

USDA/AMS/Dairy Programs

P.O. Box 110939, Carrollton, TX 75011-0939

Tel. (972) 245-6060; email: sw.order@dallasma.com