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The National Milk Producers Federation (NMPF) has prevented the USDA from allowing the private auction of nonfat dry milk powder at prices below the level specified in the farm bill. The USDA, facing legal action brought by the NMPF, agreed to not submit any of the product for auction. The USDA and The Seam, a private marketing entity, entered into a court-ordered agreement not to hold any milk powder auctions until the NMPF's full complaint and motion can be heard on Jan. 22.
At issue was a dairy product price support program in the farm bill that said the USDA cannot sell nonfat dry milk stocks at less than 110 percent of the price at which it purchased the product. Under this rule, the USDA is forbidden to sell milk powder back to the market at less than 88 cents a pound, to keep prices from being further driven down. Since the price received by dairy farmers reflects commercial dairy product prices, the auction would have resulted in a reduction in dairy producers’ incomes.
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