Committee hears dairy-policy history and young farmers’ warnings as pricing rules shift

The Vermont Senate Agriculture Committee on Feb. 5 heard an extended briefing on national dairy-pricing policy from dairy-policy adviser Bob Gray and farmer–board member Bill Rowell, followed by testimony from six Vermont dairy producers who urged the committee to protect farm viability by avoiding hasty rule changes and by addressing state regulation, manure‑management windows, broadband access and capital needs.

Gray, a long-time dairy policy adviser who said he worked on the Hill and with multiple Vermont senators, traced the legal framework that underpins U.S. milk markets and argued the federal system matters to Vermont farms. "The Capper‑Volstead Act allowed farmers to form cooperatives," Gray said, explaining how cooperatives give farmers bargaining power and ownership in processing. He described the federal milk marketing order (FMMO) structure — four utilization classes used to pool milk and set prices for fluid milk, soft products, hard cheese and butter/powder — and said the mix of those classes determines what farmers receive.

The recent federal hearing and pending order change led the discussion: Rowell and Gray told the committee that a pricing formula adjusted in 2018 — which used the average of Class 3 (cheese) and Class 4 (butter/powder) plus a 74¢ differential to set the Class 1 (fluid milk) mover — reduced farmer receipts. "That formula cost farmers about $1.6 billion in the Northeast," Rowell said. Both witnesses said the FMMO revisions announced in late 2024 and taking effect in June will return the Class 1 mover to the "higher of" Class 3 or Class 4 plus the differential, which they expect will restore some of the lost value to dairy checks.

Gray provided production and price context: Vermont produces about 2.34 billion pounds of milk annually and ships substantial supplies out of state; nationally production runs about 227 billion pounds. He said milk prices have ranged from about $18 per hundredweight in low years to nearly $25 in 2022, with current prices running near $21 per hundredweight and a USDA projection of roughly $22 for the year. Gray and Rowell also described federal programs such as PL 480 (post‑war commodity purchases), the MILC program (Milk Income Loss Contract), and the current Dairy Margin Coverage program (a risk-management program) that provide different types of support or backstops at different times.

Committee members responded by saying they planned to raise the issue with Vermont’s federal delegation and not to "monkey around with the formula" while the new FMMO calculation takes effect. The chair told witnesses the committee would talk to the federal delegation and urged patience to let the changes play out.

After the policy briefing, six Vermont producers — Stephanie Pope of Iroquois Acres, Bradley Saint Pierre of Berkshire, Kylie Chittenden of Shoreham, Keith Lanfear of Hyde Park, Britney Cyr of Bristol and others — described on‑farm practices and regulatory pain points. They stressed adoption of technology (draglines to pump and inject manure, nutrient‑monitoring choppers, cow activity monitors), the economic importance of dairy to local economies, and the need for better broadband and workforce access in rural areas.

Producers repeatedly asked the committee to revisit state rules that restrict manure application to set calendar windows. "Sometimes the rules force us to spread during narrow windows instead of when the soil can accept it," Bradley Saint Pierre said, describing how farmers have moved to injection and draglines to reduce truck traffic and runoff risk. Several witnesses recommended giving more discretion to nutrient‑management planners and permitting flexibility when soils are suitable, rather than strictly enforcing calendar dates.

Young farmers also urged capital support and protections from litigation. Stephanie Pope described out‑of‑state programs she researched: Maine’s milk‑stabilization payments and New York’s capital‑investment rebate (a 20% payback program up to $3 million per entity) that she said help retain dairies and attract processors. Multiple speakers asked the committee to consider a right‑to‑farm measure to limit frivolous nuisance claims and to ease succession for new entrants.

On technology and labor, Britney Cyr described investments at a large Addison County farm — draglines, a nutrient‑measuring chopper and cow activity monitors — and said the monitors run about $2 per cow per month on subscription but yield earlier detection of sick cows and labor efficiencies. Several small and mid‑size producers said those capital costs are challenging without access to financing or targeted programs.

Committee members said the testimony would inform follow-up work. The chair and other senators invited producers to submit written materials; Rowell offered to circulate a one‑page paper on the FMMO pricing formula he had prepared. No formal motions or votes were taken during the session.

The committee recorded two clear items of direction: it will (1) raise the FMMO pricing changes with Vermont’s federal delegation and recommend they allow the new formula to operate for a period of time before considering alterations, and (2) seek additional testimony and technical information on state manure‑management windows, injection technology adoption, and whether nutrient‑management planner authority can be adjusted to allow more soil‑condition‑based flexibility.

The hearing combined a technical policy review of national dairy pricing and a series of on‑farm reports illustrating how national and state rules affect Vermont operations. Witnesses from both the cooperative and farm sides urged caution before new changes and asked the committee for targeted help on capital, regulation calibration and rural infrastructure.