The International Dairy Foods Association (IDFA) has criticised the US Department of Agriculture’s decision to increase farm milk prices in 14 South Eastern and Appalachian states.
The decision to increase milk prices will also include the implementation of a controversial Federal Milk Marketing Order change that was announced last month.
The IDFA has opposed the decision saying “the condition that normally would trigger an increase – a documented shortage of milk in the region – clearly does not exist.”
The USDA reports that milk producers are expanding herds in response to favourable returns during 2007, and cow numbers are expected to increase further in 2008.
“We believe this milk price increase is unwarranted and will ultimately be harmful to consumers who are struggling today to afford every-day necessities,” the IDFA said in a statement. “With the cost of food already at an all-time high, we should be doing everything we can to keep milk available and affordable, not unnecessarily raising costs.”
The USDA’s decision goes into effect immediately and is a not only seen as a bad deal for the South but also for other parts of the country.
The department already sets the cost of farm milk in Florida and other states in the Southeast at a much higher level than the upper Midwest and other parts of the country.
It is believed the decision will create dramatic disparities among the processing facilities in these Southeastern areas.
“The outmoded and archaic system must be reformed to better meet the needs of a 21st-century economy. It is astonishing that, while Congress is holding hearings on the high cost of food, USDA has implemented a decision that will raise the cost of milk in the Southeast,” the IDFA said.
“It seems the USDA is considering a similar decision that, by the department’s own estimates, would raise the cost of milk to consumers by an average of 5.5 cents per gallon and decrease consumption nationwide.”