KANSAS CITY, MO -- Dairy Farmers of America (DFA), Kansas City, Kan., the largest dairy cooperative in the US, is withdrawing its membership from the International Dairy Foods Association (IDFA) over IDFA's petition to modify the federal milk marketing order (FMMO) system.

DFA has 83 processing plants throughout the US and has been a longstanding member of IDFA. The decision to withdraw follows a proposal from IDFA which initially focused on changing how make allowances (an estimate of dairy processing costs) are configured. In March, IDFA petitioned the USDA to alter the way processors are compensated under federal milk marketing orders. 

"While IDFA generally maintains a neutral position on policies lacking full membership consensus, a critical exception was made earlier this year when they submitted a divisive milk pricing policy proposal to USDA," DFA said in a statement. "This placed DFA in the untenable position of being represented as supporting a policy position which contradicts what we believe to be in the best interests of our farmer-owners and the dairy industry. Following requests to return to a neutral policy position until a consensus position could be reached, DFA made the difficult decision to submit notice to withdraw from IDFA membership."

The statement added that DFA appreciates the significant value IDFA provides in supporting the dairy processing and manufacturing sector.

In a statement, Andrew Jerome, associate vice president of communications at IDFA, said the organization cares deeply about the future of the dairy industry and ensuring its stability.

"We understand the pressure cooperatives are under with complexity and the challenge of balancing the interests of their farmer owners with their processing objectives," he said. "IDFA has a broad membership of hundreds that continues to include many dairy cooperatives as well as dairy companies from all segments of the dairy supply chain, from cooperatives to proprietary processors to retailers who produce their own private labels. No other dairy association has this kind of diverse, influential membership with a global footprint. Because we are a diverse membership and expect disagreements from time to time, our job is to be inclusive and balance those diverse interests."

Efforts relating to federal order updates have been ongoing for more than a year. In March, IDFA met twice with leadership from the National Milk Producers Federation (NMPF) to seek consensus on priorities for Federal Order reform, but was unsuccessful. IDFA’s proposal focused initially on just the call to change how make allowances are configured. NMPF asked USDA to consider more comprehensive changes to the way milk products are priced.

IDFA updated its initial proposal on make allowances, per USDA’s direction, and submitted an updated proposal on the Class I mover, according to Jerome, calling it a "balanced approach" that is based on sound data and beneficial to both processors and dairy farmers.

"We have been here before on federal order reform, and we are confident that we will come out of this stronger," he said. "We are confident that we are taking a balanced, inclusive approach that is in the best interest of the full dairy supply chain."