Throughout the decades of milk pricing by Federal Milk Marketing Orders, dairy farmers, processors, and even consumers have questioned the importance of the orders. Key to this conversation is why milk pricing differs by region.

During the May 5 Hoard’s Dairyman DairyLivestream, commentators including Cornell’s Chris Wolf, Dairy Farmers of America’s Ed Gallagher, and dairy policy consultant Alan Zolin responded to the question, “Is it time to consider more consolidation in federal orders?”

Just as those involved in the dairy industry across the country would differ in their responses to this question, the panel had varied perspectives.

“Not if it’s strictly consolidation. There are a number of things I would do, but I wouldn’t consolidate how pricing works now,” Wolf shared to initiate the conversation. Instead, he suggested separating out and balancing volatility rather than making a single order applicable to the whole country.

While consolidation to a single order was not encouraged by any of the panelists, Zolin explained that some consolidation could be possible.

“I could see five as the minimum number of orders,” he elaborated. “Once you go there, why not go national? I think those regions are just that different. You really can’t force them together.”

DFA’s Gallagher reminded listeners that a single federal pricing system was never the goal of the federal orders.

“The first federal order was in St. Louis decades ago, and certainly when that order came together and was implemented, it wasn’t dealing with national questions. It was dealing with milk marketing challenges within the greater St. Louis region,” he explained. “As the other orders came about and peaked at a count of 83, they were all dealing with regional issues.

“Even today, when we have 11 orders, there still are regional issues,” he explained. “It’s important that within these broader national themes and when we discuss national pricing issues that there still remains flexibility within the regions to resolve the challenges that are faced by the businesses and handlers in those regions.”

An ongoing series of events
The next broadcast of DairyLivestream will be on Wednesday, May 19 at 11 a.m. CDT. Each episode is designed for panelists to answer over 30 minutes of audience questions. If you haven’t joined a DairyLivestream broadcast yet, register here. Registering once registers you for all future events.

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(c) Hoard's Dairyman Intel 2021
May 6, 2021
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