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Major Advances in Milk Marketing: Government and Industry Consolidation

D. Stukenberg^*,1, D. Blayney and J. Miller

^* USDA, Dairy Programs, Market Administrator’s Office, Lenexa, KS 66219
USDA, Economic Research Service, Washington, DC 20036-5831

¹ Corresponding author: david.stukenberg{at}Fmmacentral.com

Federal dairy programs have been instituted to assist dairy farmers in marketing their milk. Milk marketing licenses were issued for city markets in 1933 during the depression. Federal Milk Orders replaced licenses in 1937 with enactment of the Agricultural Marketing Agreement Act. Low prices returned in the late 1940s and Congress passed the Agricultural Act of 1949 creating the support program for milk. Congressional involvement in milk marketing was minimal until passage of the 1977 Farm Bill. A support price adjustment to seek favorable political responses from farmers resulted in higher prices and ultimately higher production. Large expenditures and burdensome supplies caused Congress to make major changes to both programs. Other milk marketing programs have evolved from Congressional actions, including export and promotion programs. The exiting and consolidation of the dairy processors and producers has lead to a reduction in the number of marketing orders.

Key Words: federal milk market order • support price • Class I differentials • classified pricing