While the amount of U.S. milk flowing through Federal Milk Marketing Orders (FMMO) climbed to the highest level since the days when California joined the system, fluid milk movement moved to an all-time low. That’s according to 75 years of data in USDA’s publication Measures of Growth in Federal Orders.
Back in 1947, just 21% of the U.S. milk supply moved through the federal order system. However, a remarkable 65.5% of that milk went to Class I beverages. That fluid-use number stayed above the 58% threshold all the way through 1974. During the same time, the amount of total farm milk moving through the FMMO system tripled to reach over 60% of the total U.S. milk supply.
The big divergence
From 1974 to 1980, fluid milk share of all milk moving through federal orders dropped by nearly 10 percentage points from 58% in 1974 down to 48.9% by 1980. During the next two decades, fluid milk’s share held in the 40% range.
After pinging around in the 30% level from 2005 to 2017, fluid milk’s usage of all federal order milk fell to 28.9% in 2018. It then rebounded momentarily in 2020 and 2021 to go over 30%. Then, that metric fell to the aforementioned 27% last year — a 75-year low.
This shrinking share matters as this is largely the value-added premium for the Federal Milk Marketing Order system. As this Class I percentage continues to shrink, there is less money in the federal pool and that will make the upcoming modernization of federal orders even more challenging.