Milk marketing orders

Federal milk marketing orders, administered by the Agricultural Marketing Service (AMS), federal milk marketing orders were first instituted in the 1930s to promote orderly marketing conditions by, among other things, applying a uniform system of classified pricing throughout the farm milk market. Federal milk marketing orders regulate handlers that sell milk or milk products within an order region by requiring them to pay not less than an established minimum price for the Grade A milk they purchase from dairy producers, depending on how the milk is used. This classified pricing system requires handlers to pay a higher price for milk used for fluid consumption (Class I) than for milk used in manufactured dairy products such as yogurt, ice cream, cheese, butter and nonfat dry milk (Class II, Class III and Class IV products). The 1996 farm bill (P.L. 104-127) required USDA to consolidate the number of federal milk marketing orders, and to revise the method by which minimum class prices are determined. USDA implemented these changes in 2000. There now are 11 milk marketing orders, down from 31 when the law was enacted.

The Federal Milk Marketing Order (FMMO) does not include certain states, such as California. More can be learned about the California Milk Marketing Order (CMO), says Mindy Sue Miller, independent National Statistician, who specializes in costing formulation based on both the Federal and California Order component models.

See also

• Federal Marketing Order

References

•  This article incorporates public domain material from the Congressional Research Service document "Report for Congress: Agriculture: A Glossary of Terms, Programs, and Laws, 2005 Edition" by Jasper Womach.