The push for change continues among dairymen wanting to do away with what they say is an "antiquated" milk-pricing system that has long limited their profits.
But disagreements within the industry continue to prevent what many say truly needs to be done; throwing out the existing four-class milk system.
Talks of a new pricing system have been under way for about five years or more, and this month, Sen. Kirsten Gillibrand, D-N.Y., and Sen. Susan Collins, R-Maine, have stressed the need for the next farm bill to include a change in how prices are set.
According to a U.S. Department of Agriculture news release, Gillibrand and Collins have pieced together a bill that would require the USDA to conduct regional public hearings on restructuring the pricing system, and require the USDA to release a final proposal to Congress.
Through talks in the past, though, dairymen and milk processors haven't been able to fully agree on a new price formula.
"I'm not too optimistic that we're going to see the needed changes get done any time soon," said Bill Wailes, a long-time dairyman and dairy specialist at Colorado State University. "These talks haven't gained much traction."
As drought impacts the industry, many dairymen are actually losing money with the system that's in place, Wailes and others say.
A pricing system that would help dairymen turn a profit is certainly wanted in Weld County, which accounts for more than half of the state's milk production, is a top-20 milk producer nationally, and is expected to add tens of thousands of more cows, with the expansion of a new Leprino Foods cheese-processing plant in Greeley.
Rather than being set by the free market, milk producers take a price set by the federal government -- based for about 40 years on a four-class milk system.
Class I is fluid milk for consumption; Class II milk is used to make ice cream and yogurts; Class III goes into cheese production; and Class IV milk is used in butter and powders.
However, dairymen aren't producing four different classes of milk anymore, Wailes and others in the industry say.
With new technology and know-how, dairymen today are producing Class I-quality milk all of the time.
But milk processors -- cheese plants, yogurt makers and others -- still pay class prices, based on how they use the milk.
For example, in March, about 40 percent of the milk processed in the Central Federal Milk Order -- which includes Colorado and parts of six other states -- went into cheese production.
Even though processors were using Class I-quality milk to process the cheese, they were only paying the Class III price, Wailes said.
The price that's paid to dairymen is the average price of the four classes, and also factored in is how the milk was used.
In March, that average for Colorado dairymen came out to be a milk price of $17.87 per hundredweight.
However, the input costs for milk -- because of the drought and high feed prices -- are now about $19 per hundredweight, Wailes said.
In March, the price for Class I milk -- which, as Wailes stresses, is what all dairymen are now producing -- was $19.80 per hundredweight.
The drought and high input costs are making it difficult to turn a profit, but if dairymen were being paid the price of the milk they're producing, they at least wouldn't be losing money, he added.
"There's certainly no need for the four-class system anymore," Wailes said. "Forty years ago, it certainly made sense; different dairymen were producing different quality of milk.
"That's just not the case anymore. We need to have one milk price. But that's not what processors want."
Jackie Clippenstein, the vice president of industry and legislative affairs for Dairy Farmers of America, agreed with Wailes in that processors and dairymen have differing opinions -- as do different dairymen from various regions.
"There's pretty broad consensus that the milk-pricing system in place isn't at all best for the industry," she said, noting that the Dairy Security Act, which for months has been part of farm bill discussions, includes a new margin-insurance program and a market-stability program, but not throwing out the four-class system. "Until the industry can agree on how they want that done, it's not something we can send into the legislative process."
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