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Governmental Control of the Dairy Industry Other Than Health Measures and Standards

Department of Agricultural Economics, University of Illinois, Urbana

ABSTRACT

Milk price-control legislation came into being primarily as the result of disastrously low farm prices in the early 1930's. Dairy farmers were particularly hard-hit by the depression. With a perishable product they had little or no protection in the market place. Collective bargaining between producers and distributors broke down in most markets. Financial losses of producers led to violence, dumping of milk, and general disruption of the dairy industry.

In this situation it was evident that something had to be done to raise the income of milk producers and restore some measure of stability to the milk market. Between 1933 and 1940, 26 states enacted legislation to control minmum prices to be paid producers as well as those to be paid by consumers. Early in 1933, the United States Agricultural Adjustment Act, which permitted the establishment of minimum wholesale and retail milk prices, became a law. In 1933, nine states, including New York, Connecticut, Florida, Pennsylvania, Ohio, Oregon, New Jersey, Vermont, and Wisconsin, enacted legislation to control both producer and consumer prices for milk.