NMPF intervenes as USDA, organic handlers appeal

WASHINGTON — A USDA administrative law judge has ordered certified organic milk handlers exempt from Federal Milk Marketing Order regulation under the orders amended in 2025, but the exemption is not in effect as both USDA and the organic handlers appeal.

Meanwhile, the National Milk Producers Federation (NMPF) has intervened in related federal lawsuits, bringing conventional producer interests directly into a dispute over whether organic milk should continue contributing to marketwide FMMO pools.

The case involves Aurora Organic Dairy, Horizon Organic Dairy and Cooperative Regions of Organic Producer Pools (CROPP), which markets under the Organic Valley name. The three filed administrative petitions with USDA April 29, 2025, challenging FMMO regulation of their organic milk.

On Aug. 25, USDA Administrative Law Judge Tierney Carlos ruled the 2025 FMMO Final Rule unlawful as applied to the petitioners and other certified organic handlers because USDA failed to adequately consider organic-sector evidence it allowed to be admitted during the 2023-24 national FMMO hearing.

Carlos ordered the organic handlers exempt from the Final Rule. Both sides appealed Sept. 24 to USDA’s Judicial Officer.

USDA wants the exemption reversed. The organic handlers want the favorable portion upheld while appealing claims Carlos rejected, including their broader challenge to ongoing FMMO regulation and request to recover producer settlement fund payments.

The ruling involves more than whether organic handlers follow the new pricing formulas. Because producers voted up or down on continuing their respective FMMOs as amended, there is no previous version for exempt handlers to fall back on.

“FMMOs, as amended, are voted on and adopted as entirely new orders,” USDA states in its appeal. “Since the prior FMMO no longer exists, Petitioners are essentially exempt from regulation entirely.”

Thus, the dispute could determine whether regulated organic milk remains part of the marketwide pools through which classified milk values are shared among producers.

NMPF intervenes

That potential effect on other dairy farmers brought National Milk Producers Federation (NMPF) into the fray.

CROPP filed a related federal lawsuit against USDA and Agriculture Secretary Brooke Rollins in Wisconsin after constitutional claims were dismissed from the USDA proceeding because agency adjudicators could not decide them. Aurora and Horizon filed related cases in Colorado, while seven CROPP-member organic dairy farmers filed another in the U.S. Court of Federal Claims.

NMPF moved to intervene, arguing that the existing parties did not represent the interests of conventional dairy farmers sharing in the FMMO pools. U.S. District Judge James Peterson granted NMPF intervention in the Wisconsin case Sept. 17.

NMPF characterizes the Aug. 25 ruling as granting the organic handlers their principal requested relief — “exempting all certified organic milk from the FMMOs.”

It argues that removing regulated organic milk could reduce pool value available to producers whose milk remains. Organic handlers argue the opposite side of that equation: Their milk operates in a distinct market with different production requirements, costs, pricing and balancing, and requiring higher-valued organic fluid milk to contribute to conventional pools transfers organic value outside that market.

USDA argues the Agricultural Marketing Agreement Act of 1937 does not provide separate pooling treatment based on production method, stating simply in its appeal: “Under the AMAA, milk is milk.”

Different orders, different stakes

The potential effect would not necessarily look the same in every FMMO.

Take, for example, the Northeast Order 1, which has considerable Class I milk and significant organic fluid milk processing, putting more fluid milk value potentially in play.

The flipside is the Upper Midwest Order 30, which also has considerable organic processing but a very different pool. In September, just 6.4% of producer milk was Class I while 91.6% was Class III, and its producer price differential was only 58 cents per hundredweight. That makes the organic question noteworthy in a pool where Class I is already a small piece of a cheese-dominated market.

Public FMMO reports do not disclose current organic Class I pounds or individual handler settlement-fund obligations, so the potential effect on conventional producer prices cannot be calculated from published data.

What happens now?

Nothing changes on milk checks yet. The exemption did not become final because both sides appealed Sept. 24. USDA’s Judicial Officer will decide whether Carlos’ ruling stands.

Meanwhile, NMPF filed an Oct. 1 motion asking Peterson to stay CROPP’s Wisconsin case until USDA completes that review. CROPP opposed the stay Oct. 16, with the next reply due Oct. 23. Peterson can then decide whether the federal case proceeds or waits.

For organic producers, the cases could determine whether their milk remains subject to FMMO pooling and whether their handlers can recover past settlement-fund payments. For conventional producers, the question is what happens to marketwide pool value if regulated organic Class I milk leaves.

For now, the existing system remains in place while the USDA appeal and federal cases proceed.