MILK MARKETING ORDER REFORM
E. Bruce Godfrey
USU Extension Economist

The 1995 farm bill required that USDA reduce the number of milk marketing orders in the U.S. to no less than 10 and no more than 14 from the 32 that existed in 1996. The proposed changes were to be published in the Federal Register on 30 January 1998. I have received several publications that have outlined and evaluated the various proposals. Those producers who have access to the Internet can also view much of this material at the following Internet address http://www.ams.usda.gov/dairy/reform. This home page also has links to other sites and documents that may be of interest. Producers are also encouraged to send comments on the reform proposals to:

    USDA/AMS/Dairy Programs
    Order Reform Branch
    Room 2968 South Building
    P.O. Box 96456
    Washington, DC 20090-6456

The proposed rules (approximately 1000 pages) have the potential to affect every dairyman. Like every government action, it will benefit some and hurt others. Thus, one�s view of the proposal will depend whether you will benefit or lose.

Most of the proposals I have seen indicate that the Great Basin order (Utah, Eastern Nevada, Southeastern Idaho) will be combined with the Western Idaho/Eastern Oregon and Western Colorado orders to form a new "western" milk marketing order. If this were to occur, Utah would be placed with the area that has led the nation for the last several years in increased milk production (primarily the Jerome area of southern Idaho). This consolidation can potentially have a dramatic impact on milk prices in Utah. Some estimates indicate that producers in the Great Basin would be one of the most adversely affected areas in the nation, while other estimates suggest the impact will not be large. These differences in potential impacts occur as a result of how the orders are administered. An analysis of all of the alternatives is beyond the scope of this article, but every producer should try to become informed of the alternatives that will likely be implemented.

One factor that may negate all of the above stems from a lawsuit. Judge Doty ruled that the milk marketing orders were "arbitrary and capricious" and barred USDA from enforcing Class I differentials. If this ruling were enforced it would mean less money in producers� milk checks. This ruling has been stayed, but it has the potential to essentially eliminate the federal market order system. What will happen in the long run is not known, but it is a development that should be of interest to all producers and should be monitored. I do not expect Judge Doty to release his stay (an appeal may also have the effect of continuing the stay) until some of the proposals associated with reforms in the milk marketing orders have been evaluated. But, this is a case where dairy producers need to "stay tuned" for the next episode.

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