The debate over raising the U.S. dairy “make allowance” by $5 per hundredweight has become one of the most contentious issues in Federal Milk Marketing Order reform. Make allowances are the fixed costs processors deduct when converting raw milk into cheese, butter, powder and whey. If those allowances rise, the formulas used to calculate milk prices would deliver a lower regulated minimum price to dairy farmers. Supporters of a higher make allowance argue that current processing costs no longer reflect reality. Cheese, butter and powder plants are facing higher labor, energy, packaging and maintenance expenses, while the make allowance formulas have not been substantially updated in years. Processor groups say the adjustment is necessary to keep manufacturing plants profitable and encourage future investment in dairy processing capacity. Many producers, however, see the proposal as a direct threat to already thin milk checks. Dairy farmers are struggling with weaker milk prices, ...