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Dairy Policy & Economics

The U.S. dairy industry is an important contributor to the nation's economic well-being and vitality. Nationwide, hundreds of thousands of jobs are created by the dairy industry on farms, in processing plants, through marketing and transportation, in retail stores and in companies that supply inputs to the dairy industry.

Dairy policy in the United States includes both federal and state programs. The two major federal dairy programs are the Federal Milk Marketing Orders (FMMO) system, with 10 market areas, and the Margin Protection Program for Dairy (MPPD).

The dairy farm support programs were changed in the 2014 Farm Bill. The new MPPD replaced the Milk Income Loss Contract (MILC) program and the Dairy Product Price Support Program (DPPSP).

However, FMMO policies date back to the Great Depression and have not kept pace with the dynamic realities of today's marketplace. The outdated and complicated FMMO programs are regionally divisive and discourage innovation. To ensure the United States has a healthy and vibrant dairy industry that is able to meet the changing demands of the marketplace, IDFA continues to call for FMMO reform.

Bain & Co. Report Provides Roadmap to the Future

The Innovation Center for U.S. Dairy in 2009 commissioned a comprehensive study of dairy supply and demand around the globe, including an assessment of opportunities for and threats to the U.S. dairy industry. Conducted by Bain & Co., the study identified where the U.S. dairy industry held the best advantage to capture and fulfill a portion of the worldwide demand gap that will exist over the next decade. The research showed the industry may only grasp that opportunity if dairy policies are streamlined to fit better with global markets, which would provide incentives for growth and innovation.

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