Rule2026-03985
Reauthorization of Dairy Forward Pricing Program
Primary source
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Published
February 27, 2026
Issuing agencies
Agriculture DepartmentAgricultural Marketing Service
Abstract
This final rule updates the Dairy Forward Pricing Program (DFPP) regulations in accordance with the Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026 (Continuing Extensions Act). The Continuing Extensions Act reauthorizes the DFPP program to allow handlers to enter into new contracts until September 30, 2026. Any forward contract entered prior to the September 30, 2026, deadline is subject to a September 30, 2029, expiration date.
Full Text
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<title>Federal Register, Volume 91 Issue 39 (Friday, February 27, 2026)</title>
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[Federal Register Volume 91, Number 39 (Friday, February 27, 2026)]
[Rules and Regulations]
[Pages 9703-9705]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-03985]
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Rules and Regulations
Federal Register
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This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 91, No. 39 / Friday, February 27, 2026 /
Rules and Regulations
[[Page 9703]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 1145
[Doc. No. AMS-DA-25-0782]
RIN 0581-AE53
Reauthorization of Dairy Forward Pricing Program
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This final rule updates the Dairy Forward Pricing Program
(DFPP) regulations in accordance with the Continuing Appropriations,
Agriculture, Legislative Branch, Military Construction and Veterans
Affairs, and Extensions Act, 2026 (Continuing Extensions Act). The
Continuing Extensions Act reauthorizes the DFPP program to allow
handlers to enter into new contracts until September 30, 2026. Any
forward contract entered prior to the September 30, 2026, deadline is
subject to a September 30, 2029, expiration date.
DATES: March 2, 2026.
FOR FURTHER INFORMATION CONTACT: Erin Taylor, USDA/AMS/Dairy Programs,
Order Formulation and Enforcement Division, STOP 0231-Room 2530, 1400
Independence Avenue SW, Washington, DC 20250-0231; telephone (202) 720-
7311; email: <a href="/cdn-cgi/l/email-protection#a1e4d3c8cf8ff5c0d8cdced3e1d4d2c5c08fc6ced7"><span class="__cf_email__" data-cfemail="6421160d0a4a30051d080b1624111700054a030b12">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: The Food, Conservation, and Energy Act of
2008 (2008 Farm Bill) \1\ initially established the DFPP.\2\ The DFPP
allows milk handlers, under the Agricultural Marketing Agreement Act of
1937 (AMAA),\3\ to pay producers or cooperative associations of
producers a negotiated price for producer milk, rather than the Federal
order minimum blend price for non-fluid classes of milk (Classes II,
III, and IV under the Federal Milk Marketing Order (FMMO) system). The
DFPP does not allow for forward contracting Class I, or fluid, milk.
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\1\ Public Law 110-234.
\2\ 73 FR 64868.
\3\ 7 U.S.C. 601-614.
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Following the initial expiration of the DFPP, which prevented the
establishment of new contracts after September 30, 2012, the American
Taxpayer Relief Act of 2012 (ATRA) \4\ revised the program to allow
handlers to enter into new contracts until September 30, 2013. The
Agricultural Act of 2014 (2014 Farm Bill) \5\ then extended the program
to allow new contracts until September 30, 2018. The Agriculture
Improvement Act of 2018 (2018 Farm Bill) \6\ reauthorized the program
to allow handlers to enter into new contracts until September 30, 2023.
The Further Continuing Appropriations and Other Extensions Act of 2024
reauthorized the program to allow handlers to enter into new contracts
until September 30, 2024.\7\ The Relief Act of 2025 \8\ reauthorized
the program to allow handlers to enter into new contracts until
September 30, 2025. The Continuing Extensions Act extends the program
to allow handlers to enter into new contracts until September 30, 2026,
subject to a September 30, 2029, expiration date.\9\
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\4\ Public Law 112-240.
\5\ Public Law 113-79.
\6\ Public Law 115-334.
\7\ Public Law 118-22.
\8\ Public Law 118-158.
\9\ Public Law 119-37.
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Participation in the DFPP is voluntary for dairy farmers, dairy
farmer cooperatives, and handlers. Handlers may not require producer
participation in a forward pricing program as a condition for accepting
milk. USDA, including Market Administrator personnel, does not
determine the terms of forward contracts or enforce negotiated prices.
This regulation also does not affect contractual arrangements between a
cooperative association and its members.
Under the DFPP, regulated handlers must still account to the FMMO
pool for the classified use value of their milk. Regulated handlers
claiming exemption from the Federal order minimum pricing provisions
must submit to the Market Administrator a copy of each forward
contract. The contract must contain a disclosure statement--either as
part of the contract itself or as a supplement--to ensure producers
understand the nature of the program as well as the basis on which they
will be paid for their milk. Contracts that do not contain a disclosure
statement are deemed invalid and returned to the handler. Signed
contracts must be received by the Market Administrator before the first
of a month in order to be effective for the month. For example,
contracts must be received by the Market Administrator by December 31,
2025, to be effective for the month of January 2026.
Handlers with forward contracts remain subject to all other Federal
milk marketing order provisions. Payments specified under a forward
contract must be made on or before the same date as the Federal milk
marketing order payments they replace. Required payment dates are
specified in 7 CFR 1145.2(e).
This final rule reflects the latest statutory changes that
reauthorized producers and cooperative associations of producers to
enter into forward price contracts under the DFPP through September 30,
2026. All terms of the new forward contracts must expire prior to
September 30, 2029. All other provisions and requirements of the
program as provided for in the final rule published October 31,
2008,\10\ are still in effect.
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\10\ 73 FR 64868.
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Executive Orders 12866 and 13563
USDA is issuing this rule in conformance with Executive Orders
(E.O.) 12866, ``Regulatory Planning and Review,'' and E.O. 13563,
``Improving Regulation and Regulatory Review.'' This rule has been
determined to be not significant for purposes of Executive Order 12866,
and, therefore, has not been reviewed by the Office of Management and
Budget (OMB).
Executive Order 12988
This rule has been reviewed under Executive Order 12988, ``Civil
Justice Reform.'' This rule does not have a retroactive effect. This
rule will not preempt any State or local laws, regulations, or policies
unless they present an irreconcilable conflict with this rule.
Executive Order 13175
This rule has been reviewed under Executive Order 13175,
``Consultation
[[Page 9704]]
and Coordination with Indian Tribal Governments,'' which requires
agencies to consider whether their rulemaking actions would have Tribal
implications. AMS has determined that this rule is unlikely to have
substantial direct effects on one or more Indian Tribes, on the
relationship between the Federal Government and Indian Tribes, or on
the distribution of power and responsibilities between the Federal
Government and Indian Tribes.
Regulatory Flexibility Act and Paperwork Reduction Act
In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C.
601 et seq.), the Agricultural Marketing Service has considered the
economic impact of this action on small entities and has certified this
rule will not have a significant economic impact on a substantial
number of small entities. The purpose of the RFA is to fit regulatory
actions to the scale of businesses subject to such actions so that
small businesses will not be unduly or disproportionately burdened.
Marketing orders and amendments thereto are unique in that they are
normally brought about through group action of essentially small
entities for their own benefit. A small dairy farm as defined by the
Small Business Administration (SBA) (13 CFR 121.201) (NAICS Code
112120) is one that has an annual gross revenue of $3.75 million or
less, and a small dairy products manufacturer is one that has no more
than the number of employees listed in the chart below:
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NAICS U.S. industry Size standards in
NAICS code title number of employees
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311511................... Fluid Milk 1,150
Manufacturing.
311512................... Creamery Butter 750
Manufacturing.
311513................... Cheese Manufacturing 1,250
311514................... Dry, Condensed, and 1,000
Evaporated Dairy
Product
Manufacturing.
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To determine which dairy farms are ``small businesses,'' the $3.75
million per year income limit was used to establish an annual milk
marketing threshold of 17.9 million pounds. Although this threshold
does not factor in additional monies that may be received by dairy
producers, it should be an accurate standard for most ``small'' dairy
farmers. Based on the U.S. 2024 average yield per cow (as calculated by
the Economic Research Service [ERS]) and average All-Milk price (as
calculated by the National Agricultural Statistics Service [NASS]), a
dairy farm with approximately 740 cows or fewer would meet the
definition of a small business. According to NASS, in 2024, there were
24,811 Licensed Dairy Herds in the U.S., of which AMS determined
approximately 20,168 had milk regulated on an FMMO for at least one
month of the year. Based on the 2022 Census of Agriculture, Milk Cow
Herd Size by Inventory and Sales, an estimated 92 percent of operations
with milk sales are likely to be small businesses.
To determine a handler's size, if the plant is part of a larger
company operating multiple plants that collectively exceed the 750-
employee limit for creamery butter manufacturing; the 1,000-employee
limit for dry, condensed, and evaporated dairy product manufacturing;
the 1,150-employee limit for fluid milk manufacturing; or the 1,250-
employee limit for cheese manufacturing; the plant is considered a
large business even if the local plant does not exceed the 750, 1,000,
1,150, or 1,250-employee limit, respectively.
In 2024, 287 dairy plants were regulated for at least one month of
the year in an FMMO. According to the 2022 Statistics of U.S.
Businesses, published by the U.S. Census Bureau, more than 80 percent
of fluid milk manufacturing plants, 91 percent of cheese plants, 74
percent of dry products plants, and 77 percent of butter plants met the
SBA definition of small businesses. As the report does not break out
any categories over 500 employees, the percentage of small businesses
is larger than the calculations.
Producers and handlers use the DFPP as a risk management tool.
Under the DFPP, producers and handlers can ``lock-in'' prices, thereby
minimizing risks associated with price volatility that are particularly
difficult for small businesses to mitigate.
AMS is committed to complying with the E-Government Act, to promote
the use of the internet and other information technologies to provide
increased opportunities for citizen access to Government information
and services, and for other purposes.
Section 1601(c)(2)(B) of the 2014 Farm Bill provides that the
administration of the DFPP shall be made without regard to the
Paperwork Reduction Act (PRA), 44 U.S.C. chapter 35. Section 1701 of
the 2018 Farm Bill extended that Congressional direction through
September 30, 2023. Congress again extended the direction through
September 30, 2024, by the Further Continuing Appropriations and Other
Extensions Act, 2024. That direction was again extended to September
30, 2025, by the Relief Act. That direction is further extended to
September 30, 2026, by the current reauthorization of the DFPP through
the Continuing Extensions Act. \11\ Thus, any information collection
conducted for the DFPP is not subject to the PRA.
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\11\ Public Law 119-37.
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Final Action
In accordance with the Continuing Extensions Act, this final rule
extends the DFPP to all Federal milk marketing orders. New contracts
under the program may be entered into until September 30, 2026. Any
forward contract entered into up to and until the September 30, 2026,
deadline is subject to a September 30, 2029, expiration date.
Section 1601(c)(2)(A) of the 2014 Farm Bill provides that the
promulgation of the regulations to implement the reauthorization of the
DFPP shall be made without regard to the notice and comment
requirements of the Administrative Procedure Act, 5 U.S.C. 553. Section
5002 of the Continuing Extensions Act extends that direction to the
current reauthorization of the DFPP. It is unnecessary and contrary to
the public interest to delay the effective date of the final rule.
Dairy stakeholders have been unable to enter into contracts since the
DFPP expired on September 30, 2025. Producers and handlers have thus
been unable to rely on the forward contracts as a risk management tool.
Stakeholders have inquired about when the program will be reimplemented
and have signaled they intend to immediately enter into new contracts.
Further, all contracts are voluntary. AMS, therefore, is issuing this
final rule with an effective date one day after publication, without
prior notice or public comment.
[[Page 9705]]
List of Subjects in 7 CFR Part 1145
Forward pricing contracts, Milk marketing orders, Reporting and
recordkeeping requirements.
For the reasons set forth in the preamble, the Agricultural
Marketing Service amends 7 CFR part 1145 as follows:
PART 1145--DAIRY FORWARD PRICING PROGRAM
0
1. The authority citation for part 1145 continues to read as follows:
Authority: 7 U.S.C. 8772.
0
2. Amend Sec. 1145.2 by revising paragraph (b) to read as follows:
Sec. 1145.2 Program.
* * * * *
(b) No forward price contract may be entered into under the program
after September 30, 2026, and no forward contract entered into under
the program may extend beyond September 30, 2029.
* * * * *
Erin Morris,
Administrator, Agricultural Marketing Service.
[FR Doc. 2026-03985 Filed 2-26-26; 8:45 am]
BILLING CODE 3410-02-P
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