Federal government regulation of farm milk prices emerged in the wake of the Great Depression. The 1937 Agricultural Marketing Agreement Act allows the U.S. Department of Agriculture to promulgate regulations which set minimum prices for farm milk, which in turn vary based on what dairy products are made from that milk. These regulations also created geographic marketing areas where all dairy producers receive the same price for their farm milk. For over seventy-five years, the price of no other farm commodity has been regulated as stringently as the price of milk.
Today’s dairy marketplace is very different than that of the 1930’s. Widespread use of refrigeration, the interstate highway system, and advances in distribution logistics make regulations designed to foster a local supply of farm milk a costly burden on both the dairy industry and consumers. Complex government mandated formulas which set minimum farm milk prices have the unintended consequences of distorting investment decisions across the dairy supply chain. Moreover regulations that classify farm milk for pricing purposes based on what products are made from that milk, make the U.S. less competitive in the international export marketplace for many value-added dairy products.
IDFA encourages Congress and the Administration to create and administer federal dairy policies that are fair to all segments of the dairy supply chain, from dairy producers to processors to consumers. Any government milk price and related regulations should encourage processing and product innovation, and increase the ability of the U.S. dairy industry to compete in today’s increasingly global marketplace.
California Federal Order Hearing is Off and Running -- Sept. 2015
The U.S. Department of Agriculture’s hearing to consider proposals to establish a Federal Milk Marketing Order for the state of California began Tuesday, September 22, in Clovis, Calif. Bob Yonkers, IDFA vice president and chief economist, is attending the hearing and will provide periodic updates for members. His first report is available here.
Members may log in to read the update listed below.