USDA issued an interim final rule today amending Class III and IV make allowances in all Federal Milk Marketing Orders. The increased make allowances were proposed on June 20th, following hearings a year ago last spring. The amendments will be effective September 1.
The cheese make allowance jumps from 16.82¢/lb to 20.03¢/lb, a 19% increase. The butter make allowance jumps to 17.15¢/lb, up from 12.05¢/lb, a 42% increase. The non-fat dry milk make allow jumps to 16.78¢/lb from 15.70¢. Wholesale cheese prices could increase 2¢/lb and wholesale butter could increase more than 3¢/lb. But fluid milk prices could decline a penny a gallon, USDA estimates.
Since make allowances and producer minimum prices in the Federal Orders are zero sum, the increased make allowances mean minimum price swill decline. USDA estimates overall producer income could decline $156 million as a result.
The changes were approved by producers earlier this month. Comments, however, are still open until August 19. The interim final rule will be published in the Federal Register today.