With the conclusion of 2019, a full-year profile of each Federal Milk Marketing Order (FMMO) becomes clearer. One of the biggest changes in 2019 was the inclusion of California as an FMMO for a full year. California is unique in many ways, and certainly its federal order is unique to the FMMO system.

In 2014, Class III producer milk prices were above $20 per hundredweight (cwt). Milk protein was worth more than butterfat, and amino acid balancing was becoming the accepted technology for increasing butterfat and milk protein component levels.

In 2014, when producer milk was priced at over $24 per hundredweight (cwt), making money was pretty easy. In 2008, when prices fell to $12 per cwt, it’s doubtful any producer was making money. More recently, prices have hovered in the $15-to-$17-per-cwt range. Some have made money, but a lot of others have struggled.

The effort to bring the California dairy market under the Federal Milk Marketing Order (FMMO) umbrella started in 2015 and will certainly end in 2017.

California has regulated the marketing of milk produced within its borders since 1935, after the U.S. Supreme Court ruled portions of a federal law covering milk marketing areas was nconstitutional. Now, more than 80 years later, a process is underway that could align California with the federal milk marketing order (FMMO) system.

Skim milk powder (SMP) and nonfat dry milk (NDM) are often confused and sometimes combined like they were the same thing. They are similar – but in some ways, they are very different. As the dairy industry transitions from a national business to a global business, the U.S. dairy industry must transition to international standards to compete.

One of the unique disadvantages for the U.S. dairy industry in international dairy markets is the standard for milk quality. The specific standard allowed for somatic cell count (SCC) is a barrier for U.S. dairy sales to some countries and a marketing disadvantage in others.

Recently there has been much media buzz about “free trade agreements.” Free trade agreements cover many products, but this article will focus on dairy products. Certainly these free trade agreements will impact U.S. dairy pricing, and this article will review some of the factors and trends that free trade agreements are influencing.

As with everything in life, things are always changing. The dairy industry is no different. New technology, new business processes and new infrastructure allow and force businesses to evolve. Dairy is no different and has been changing and evolving since its inception. What has driven the changes?

Editor’s note: This is the last of four articles explaining producer payment systems for milk in the U.S. California produces a little more than 20 percent of U.S. milk and has its own unique payment system for paying producers for it. As mentioned in previous articles in this series, the three Federal Milk Marketing Order payment systems in the U.S. are very similar: