While not imminent, some dairy industry specialists have asked the question, “What would milk marketing look like without federal order pricing?” During the June 15, 2022, Hoard’s Dairyman DairyLivestream, several respected dairy economists did their best to imagine what might happen if federal orders didn’t exist.
If deregulation of milk marketing were to occur even with the retention of data collection by some entity, milk marketing would be different. The University of Wisconsin-Madison’s Mark Stephenson’s picture of a world without federal orders looks like dairymen and milk marketers seeking reassurance.
“I do think that one of the very first things that would happen is that you would find farmers and processors running toward each other, to secure contracts for milk and to assure themselves of the marketplace,” Stephenson explained. “So, I think that the world would look very different without federal orders.”
In his vision, dairy farmers and marketers would be looking to secure both a price and a quantity of product delivered.
The American Farm Bureau Federation’s Roger Cyran sees an entire change of market perspective.
“I think it would look a lot like the broiler industry,” he said. “I think it would be tough for farmers to make their own decisions. Federal minimum pricing and federal orders means that no matter how an integrator tries to define our dairy farmer produces, they would still have to pay the federal order minimum.”
“In my point of view, if you're going to run a truly competitive market, you have to have reliable information,” said Kroger’s Mike Brown. “One of the beauties of the work that federal orders do is help us understand production levels, components, any product sales report prices for the base commodities, and those are large volume surveys. That's all very, very useful, whether you regulate a pound of milk or not.”
To watch the recording of the June 15 DairyLivestream, go to the link above. The program recording is now also available as an audio-only podcast on Apple Podcasts, Spotify, Google Podcasts, and downloadable from the Hoard’s Dairyman website.
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