Organic dairy processors are asking courts to exempt their industry from the Agriculture Department's federal milk marketing order system, arguing their forced participation in the system is unconstitutional.
Three processors — Horizon Organic Dairy, Aurora Organic Dairy, and the Cooperative Regions of Organic Producer Pools (CROPP) — have filed separate lawsuits seeking exemptions for the organic dairy industry from federal milk marketing orders. The organizations are members of the Coalition for Organic Dairy Exemption.
Organic farmers in CROPP are also filing a class-action lawsuit over USDA's collection of farmer proceeds to put into producer settlement funds, arguing that this violates the fifth amendment. In their filing, they allege the agency redistributes these funds "for the near-exclusive benefit of non-organic handlers and farmers" and ask the court for compensation for six years' worth of these collections.
"The federal government has locked in an updated dairy pricing regulation that actively harms organic dairy farmers," Pennsylvania organic dairy farmer Elvin Ranck said in a press release. "It systematically siphons revenue generated from organic dairy sales and redistributes it to non-organic dairy producers and their partners. This is effectively a government taking."
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Pointing to the fifth amendment of the Constitution, they allege the USDA has failed to account for differences between market and production cost issues between conventional and organic milk and that organic handlers can't "receive the intended benefit of the bargain for the payment of minimum prices" since federal milk marketing orders do not create a supply of organic milk. They also argue that proposed federal milk marketing orders only require the approval of dairy farmers, not processors, and that the payments demanded under the system "overwhelmingly ...benefit conventional dairy farmers, particularly those producing milk used for manufacturing other dairy products like cheese, yogurt, butter, and nonfat dry milk."
"Ostensibly, USDA defends the burdens this system imposes on processors like [the plaintiff] as justified under the authorizing statute to ensure uniform pricing designed to prevent 'destructive competition' and provide an adequate supply of milk," Horizon's complaint says. "In reality, the system creates disorderly marketing for organic handlers and does not provide an adequate supply of organic raw milk in direct contravention of the Agricultural Marketing Agreement Act's directives."
The Federal Milk Marketing Order Program establishes minimum uniform prices for dairy farmers by classifying milk in categories based on its end use, like fluid milk or cheese products, and then pooling the value of that milk among farmers who participate in that marketing order. A USDA summary of the system says pooling "allows farmers to receive the uniform price of all milk in the pool regardless of what end product their milk was used for."
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