The Federal Milk Marketing Order (FMMO) started in California on November 1, 2018, which means we have been operating under the FMMO for 39 months. I was wondering how milk prices in California under the FMMO would compare to what milk prices would have been if the California State Order had still been in operation.

As far as I know, there is no one who is continuing to estimate what prices would be if California was still under the state order. So, how can we know how we are doing?

One way is to look at USDA’s “All-Milk” price for California compared to the U.S. “All-Milk” price over that same time.

The average per hundredweight (cwt.) California “All-Milk” price over the 39 months from November 2018 through January 2022 was $18.51 per cwt. The average U.S. “All-Milk” price during that same 39-month period was $18.59 per cwt., for a difference of 8 cents per cwt. on average.

Going back and looking at the average California “All-Milk” price under the California State Order for the 39 months preceding the start of the FMMO on November 1, 2018 . . . the period of August 2015 through October 2018 . . . the average California “All-Milk” price was $15.75 per cwt. The average U.S. “All-Milk” price during that same 39 months was $16.83 for a difference of $1.08 per cwt.

My conclusion then is that the FMMO in California has improved the “All-Milk” price in California by $1 per cwt. from what it would have been under the state order.

That's real money.

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(c) Hoard's Dairyman Intel 2022
March 24, 2022
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