The Present System of Milk Pricing Devalues Fluid Milk

Commissioner Hooker is right in saying the present system of milk pricing devalues fluid milk by tying it to the price of manufactured milk. Milk price is set by the Federal Order Program. Fluid milk is Class I, Class II is manufacturing milk,used for ice cream cheese and the like.The per cent used of each sets the order price for the defined order area. Columbia County enjoyed a much better price for milk when there was a Connecticut Milk Order. First most of the milk was used as fluid milk and a small amount of class II was needed to balance supply to ensure there was enough to meet fluid needs. While I am no longer sure of the date, in the later 50’s and early 60’s the Connecticut market was merged making a much larger order area. That dropped the percent of milk used for fluid or classes I and lowered the order price received by Columbia County farmers.


At the same time the price used for class II was not fair to local farmers. Class II price is established in the Midwest where cheese is produced. The farms there are close to the manufacturing plant giving a low cost of transportation that is paid by the farmer. At times a manufacturing plant may even subsidize the cost in order to attract enough milk. Mr. Ooms sends his class II milks a long distance, perhaps as far as Boston. He must pay the extra transportation cost for his class II milk needed to balance the market.

In Boston his class II might be used to make ice cream. I believe the difference in transportation cost between the Midwest and eastern farmer for class II could approach as much as 90 cents per hundred. I would point out the cost of processing milk is about 90 cents per hundred. If Mr. Ooms sends his milk to Boston it will cost about a dollar per hundred. Mr. Ooms obviously receives less for his class II milk than the Midwest farmer receives for his class II milk.

Grant Langdon,
former Columbia County Farm Bureau President