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The USDA Agricultural Marketing Service issued a final decision that would reform the federal milk marketing order system. Changes would include a higher price for fresh milk destined for table consumption.

Following a 60-day comment period, a referendum must be passed by a two-thirds majority of independent milk producers and dairy cooperatives. The ballots must be postmarked by December 31 and received by the USDA by January 15, 2025.

Changes to the formula for calculating the price for Class I milk sold in grocery stores could net producers $800 million a year. The new formula would set the price based on the higher of the Class III or Class IV prices plus a differential for Class I production. The present calculation uses the average of the prices.

Other notable changes would increase the amount of protein in Class III and IV milk and remove 500-pound barrel cheese prices from the monthly average cheese price formula. Location-specific Class I differentials would be introduced to reflect current marketing conditions. The estimated costs to producers for making cheese, butter, nonfat dry milk and dry whey would increase.

Read more about the vote on milk marketing reforms here.