# Understanding the Dairy Pricing Opportunity Act of 2023

This bill requires the U.S. Department of Agriculture to hold public hearings to review how milk prices are set under federal rules. Right now, the government uses a specific formula to determine what dairy farmers and milk processors pay for skim milk (milk with the fat removed). This bill asks the USDA to take a fresh look at that pricing system and listen to what dairy farmers and the industry think about whether the current formula is fair and working well. The hearings must happen within six months of the bill becoming law, and they'll specifically examine an alternative pricing approach called the "higher of" formula, which would potentially give farmers better prices by using whichever calculation results in higher milk values.

Beyond the hearings, the bill also requires dairy product manufacturers to report detailed information about their processing costs and how much product they get from the milk they process. Currently, only certain manufacturers have to report this information for specific products. The new requirement would expand reporting to cover all products made in the same facility and allow the USDA to require additional manufacturers to share their cost data. Every two years, the USDA would then publish a report summarizing this cost information, which could be used to help set future milk prices.

The practical impact of this bill would mainly be felt by dairy farmers, milk processors, and ultimately consumers. If the hearings lead to changes in how milk is priced, farmers could see their income affected either positively or negatively depending on which pricing method is adopted. Better price transparency through the cost reporting requirements could help ensure that milk pricing reflects actual production expenses, potentially leading to fairer prices throughout the dairy supply chain. For consumers, any changes to milk pricing could eventually affect what they pay for milk and dairy products at the grocery store, though the direction and magnitude of any price changes would depend on what the USDA decides after reviewing the hearings and new cost data.

Dairy Pricing Opportunity Act of 2023

Langworthy, Nicholas A.

Dairy Pricing Opportunity Act of 2023 This bill directs the Department of Agriculture (USDA) to hold national hearings to review Federal Milk Marketing Orders. (USDA uses these orders to establish a minimum price for various classes of milk.) The hearings must include the review of proposals from producers and the dairy industry on the price of Class I skim milk. The bill also requires manufacturers to report cost and yield information for all dairy products processed in the same facility or facilities to USDA's Dairy Product Mandatory Reporting Program. Further, every two years, USDA must publish a report containing the information obtained under these new requirements.