Federal Milk Marketing Orders, industry consolidation addressed at National Farmers Convene ’23
(Ames, Iowa) March 9, 2023 — Dairy industry consolidation and Federal Milk Marketing Orders were a focus at National Farmers Convene ’23 in Bettendorf, Iowa March 8.
Agriculture Economist and dairy consultant Dr. Richard Levins, University of Minnesota detailed how the processing side of milk production is becoming increasingly consolidated. The U.S. lost 6 percent of its dairy farms in 2022, but smaller and mid-sized processing plants are also being pushed out of business.
“The USDA reported that in 1960 there were 5,000 fluid plants across the country. Fifty years later there are only 300 plants,” Levins said. To adjust, the size of the plants is growing. “In the 1960s, each plant brought in less than 9 million pounds of fluid. However, fifty years later plants are accepting 190 million pounds of fluid or more.” He said for every 16 plants in 1960, there is now one that takes in 20 times the volume of fluid milk.
Milk is becoming a super high-volume game. For the average dairy farmer to compete they will need to partner with other farmers and market the high-volume plants are wanting.
National Farmers Organization Milk Sales Director Dick Byslma presented information about the federal milk marketing order system (FMMO). While he agrees fewer government regulations are typically a good thing, where milk is concerned the regulations are needed.
Because milk production cannot be slowed or halted if demand lessens, the typical supply and demand controls don’t apply, he said.
“The federal milk order system guarantees an orderly market, improves income for farmers, supervises sales to ensure both farmers and processors are paid fairly, and assures consumers have adequate supplies of quality milk at reasonable prices,” said Byslma.
“Without the federal system, there would be no auditing to assure price and no opportunity to have a system that calculates prices based on class differentials. Milk prices would race to the bottom.”