Economist prefers transitioning away from milk marketing orders
An Ohio State professor would like to see the dairy industry transition away from the Federal Milk Marketing Order system.
Dr. Normand St. Pierre tells Brownfield Class One fluid milk is forward priced, and Class III for cheese and Class IV for butter and powder is “backward priced” from the end user cost, and he would like to see the Federal Milk Marketing Order system phased out, and changing the orders won’t help. “They’re trying to address recent issues as opposed to trying to address the real issues that you have with a system again designed at a time when Class I fluid milk was a major user of milk.”
St. Pierre uses another perishable item as an example of why dairy should let the markets work. “A head of lettuce is a highly perishable product. There’s no federal order, but you have very organized marketing of lettuce.”
St. Pierre says changing the Class I mover back to the “higher of” Class III and IV formula fixes nothing, and the make allowances for Class III tend to favor the larger processors. From the Four State Dairy Conference in Dubuque Iowa