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USDA Proposes Milk Price Overhaul

March 31, 1999

WASHINGTON (AP) _ The Agriculture Department today proposed an overhaul of the nation’s 60-year-old milk pricing system, consolidating the current 31 pricing regions into 11.

``These reforms will help make sure that America’s dairy farmers receive a fair price and that American consumers continue to enjoy an abundant, affordable supply of milk,″ Agriculture Secretary Dan Glickman said.

The changes will also ``simplify the wholesale milk pricing system, making it more market-oriented and more equitable,″ Glickman said.

The regions are divided into what are called milk marketing orders.

Milk orders were created during the Depression-era when dairy farmers were having difficulty selling their milk to processors. The orders, which set the minimum price for milk, essentially prevent processors from playing producers against each other to drive down the price.

There are currently 31 milk orders. The 1996 farm bill ordered Glickman to consolidate those to between 10 and 14 orders.

Under the new proposal, the 11 orders will include the following areas: Northeast, Appalachian, Florida, Southeast, Mideast, Upper Midwest, Central, Southwest, Arizona-Las Vegas, Western and Pacific Northwest.

The newly consolidated orders must be approved by either two-thirds of producers in a marketing area or by producers who supply two-thirds of the milk in a marketing area. If the producer referendums are approved, the changes will take effect Oct. 1.

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