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Federal Milk Marketing Order Impact on the California Milk Price

Geoff Vanden Heuvel

Director of Regulatory and Economic Affairs

The Federal Milk Marketing Order (FMMO) started in California on November 1, 2018, which means we have been operating under the FMMO for 39 months. I was wondering how milk prices in California under the FMMO would compare to what milk prices would have been if we were still under the California State Order.

As far as I know, there is no one who is continuing to estimate what prices would be if we were still under the State Order. So, how can we know how we are doing? One way is to look at USDA’s “All Milk” price for California as compared to the U.S. “All Milk” price over that same time.

The average per cwt. California “All Milk” price over the 39 months from November 2018 through January 2022 was $18.51 per cwt. The average U.S. “All Milk” price during that same 39-month period was $18.59 per cwt., for a difference of 8 cents per cwt. on average. Going back and looking at the average California “All Milk” price under the California State Order for the 39 months preceding the start of the FMMO on November 1, 2018, the period of August 2015 through October 2018, the average California “All Milk” price was $15.75 per cwt. The average U.S. “All Milk” price during that same 39 months was $16.83 for a difference of $1.08 per cwt.

My conclusion then is that the FMMO in California has improved the “All Milk” price in California by $1 per cwt. from what it would have been under the State Order. That’s real money.

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