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California processors ask for a Federal Order

The three largest dairy cooperatives in California have petitioned USDA to have milk producers market under a Federal Milk Marketing Order. California operates under a state pricing mechanism which has consistently provided the lowest farm milk prices in the country.

As an example: the January 4b price is $13.75 per hundredweight while the comparable January Class III price in the Federal Orders is $16.18.

California Dairies, Dairy Farmers of America and Land O’Lakes submitted the proposal to USDA saying a Federal Order would provide their members with “more equitable, market-based milk prices.”

The next step in the process would be for USDA to conduct a regulatory hearing to gather input from producers, companies and organizations.

Established in 1937, Federal Milk Marketing Orders are designed to provide adequate producer prices to ensure an adequate supply of milk for consumers. Approximately 60 percent of the milk produced in the United States is marketed through the 10 Federal Orders.  About 20 percent of the nation’s production is in California and the rest is through other state orders or with no order.