As of October 1, Congress has failed to pass the 2018 farm bill or legislation that would extend the Dairy Forward Pricing Program. Under that program, proprietary plants who offered forward pricing were not required to pay minimum Federal Order prices.
Because the program expired without any authorizing extension, “proprietary handlers establishing new forward contracts on or after October 1, 2018 will not be exempt from paying minimum Federal order prices,” says Vic Halverson, Administrator for the Upper Midwest Federal Milk Marketing Order. “Previously established contracts that expire on or before September 30, 2021, are not impacted.
“With the expiration of the Forward Pricing Program, all producers may still choose to (but are not required to) have forward pricing contracts,” he says. “For producers being paid by proprietary plants, however, such contracts do not exempt the proprietary plant from its obligation to pay the producer the Federal order minimum prices on milk pooled on the order.”