Changes To Class III and IV Prices Put on Hold

Dairy Foods, March, 2001 by J. Mark Huffman

A Federal Judge last month granted a preliminary injunction blocking USDA from implementing the provision of its Tentative Final Rule setting a separate price for Class III butterfat.

The ruling in the U.S. District Court for the District of Columbia meant that USDA reverted to the old rule guidelines. The new guidelines had been in effect since Jan. 1.

USDA closed the comment period on Feb. 5, as planned, even though the court order was keeping the measure on hold. Several milk producer groups filed the request for an injunction, arguing they would be harmed by the implementation of the Tentative Final Rule.

"It's exactly what we asked for when we asked USDA for a stay of these rules, back in December. In fact, the judge used some of our exact wording in his order," said Bob Yonkers, chief economist for the International Dairy Foods Assn.

Yonkers said the judge made it clear the plaintiffs were going to win on the merits of the case, so USDA will now have to revise its plans for the Class III formula change.

Absent an appeal by USDA, the injunction will stay in place until the agency completes the rule-making process. That process includes going through all the industry comments. Yonkers said he hoped USDA would have a final rule in place by spring.

At press time the agency officials had not yet decided whether or not they would challenge the injunction.

J. Mark Huffman is Dairy Foods' Washington correspondent.