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Prices, and Dairy Policy Options' which was released on January 28, 
2005.

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Report to Congressional Requesters: 

December 2004: 

Dairy Industry: 

Information on Milk Prices, Factors Affecting Prices, and Dairy Policy 
Options: 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-50]: 

GAO Highlights: 

Highlights of GAO-05-50, a report to congressional requesters

Why GAO Did This Study: 

In 2003, U.S. dairy farmers marketed nearly 19.7 billion gallons of raw 
milk, one-third of which were used in fluid milk products. Farmers, 
cooperatives, processors, and retailers receive a portion of the retail 
price of milk for their part in providing milk to consumers. During 
2002 and 2003, farm prices fell while retail prices did not similarly 
decline. This pattern raised concerns about a growing spread between 
farm and retail prices. Farm prices have since increased, reaching 
record highs in April 2004. As requested, GAO examined (1) the portion 
of retail milk prices received by farmers, cooperatives, processors, 
and retailers, how this changed over time, and the relationship between 
price changes at these levels; (2) how various factors influence prices 
and affect the transmission of price changes among levels; and (3) how 
federal dairy program changes and alternative policy options have 
affected or might affect farm income and federal costs, among other 
considerations.

What GAO Found: 

Between October 2000 and May 2004, on average, farmers received about 
46 percent, cooperatives 6 percent, wholesale processors 36 percent, 
and retailers over 12 percent of the retail price of a gallon of 2 
percent milk (the most common type of milk purchased) in the 15 U.S. 
markets GAO reviewed. During this period, in 12 of the 15 markets, the 
spread between farm and retail prices increased. However in some 
markets, the price spread between these levels increased and then 
moderated. Price changes at one level were most closely reflected in 
changes at adjacent levels of the marketing chain.

Farm, cooperative, wholesale, and retail milk prices are determined by 
the interaction of a number of factors. For example, farm prices are 
affected by the supply of raw milk and the demand for milk products 
such as fluid milk, cheese, and butter, as well as by federal and state 
dairy programs. At the cooperative level, prices are influenced by the 
cost of services that cooperatives provide, and the relative bargaining 
power of cooperatives and milk processors. At the wholesale and retail 
levels, input costs such as labor and energy, and the continued 
consolidation of firms influence milk prices.

Recent changes in federal dairy programs have affected farm income, 
federal costs, and other considerations. For example, the Milk Income 
Loss Contract program has supported some farm incomes but has exceeded 
initial cost estimates because of low farm prices. A number of options 
have been suggested to change federal dairy policies such as amending 
federal milk marketing orders and raising or eliminating the support 
price. In general, these options would have mixed effects depending 
upon whether milk prices were high or low over the short or long term. 
For example, options that increase farm income over the short term tend 
to increase milk production and lower farm prices over the long term. 
These options also tend to be costly for the federal government during 
periods of low prices.

Farm and Retail 2 Percent Milk Prices, October 2000 to May 2004: 

[See PDF for image]

[End of figure]

What GAO Recommends: 

To continue informed decision-making, the Secretary of Agriculture 
should build on GAO’s analysis of the potential effects of various 
policy options as USDA proposes future changes or provides information 
to the Congress. USDA expressed concern about the practicality of some 
of the dairy policy options discussed. USDA did not comment on the 
report’s recommendation.

www.gao.gov/cgi-bin/getrpt?GAO-05-50.

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Lawrence J. Dyckman, 
(202) 512-3841, dyckmanl@gao.gov.

[End of section]

Contents: 

Letter: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendixes: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Analysis of Prices at Four Marketing Levels for 2 Percent 
Milk in Selected Markets: 

Portion Received by Farmers, Cooperatives, Wholesale Milk Processors 
and Retailers: 

Changes in Farm and Retail Prices and the Price Spread: 

Correlation between Price Changes at the Four Marketing Levels: 

Comparison of Average Annual and Monthly Prices for 2 Percent Milk: 

Appendix III: Retail Prices for Four Kinds of Milk in Selected Markets: 

Appendix IV: Average Monthly and Annual Farm, Cooperative, Wholesale 
and Retail Milk Prices in Selected Markets: 

Appendix V: Factors That Influence the Price of Milk as It Moves from 
the Farm to the Consumer: 

Market Forces, in Addition to Federal and State Policies, Influence 
Milk Prices at the Farm Level: 

Services Provided by Cooperatives, Market Structure, and Collective 
Action Can Influence the Price of Milk at the Cooperative Level: 

Input Costs, Service Levels, Innovations, and Market Structure 
Influence Wholesale Fluid Milk Prices: 

Retailing Costs, Consumer Demand, and Market Structure Changes Affect 
Retail Prices for Fluid Milk: 

Appendix VI: Economic Studies of Price Transmission in the U.S. Fluid 
Milk Market: 

Summary of Recent Economic Studies of Price Transmission in the U.S. 
Fluid Milk Market: 

Results on the Extent of Farm-to-Retail Price Transmission and Price 
Transmission Asymmetry: 

Results on Farm-to-Retail Speed of Adjustment and Price Transmission 
Asymmetry: 

Results for Retail-to-Farm Price Transmission and Price Transmission 
Asymmetry: 

Possible Causes of Asymmetry in the Extent and Speed of Price 
Transmission: 

Appendix VII: Effects of Recent Federal Dairy Program Changes and 
Alternative Policy Options: 

Recent Changes in Federal Dairy Programs Vary in Their Effects on 
Policy Considerations We Identified: 

Effects of Alternative Dairy Policies Differ under Various Scenarios: 

Appendix VIII: Comments from the U.S. Department of Agriculture: 

GAO Comments: 

Appendix IX: GAO Contacts and Staff Acknowledgments: 

Contacts: 

Acknowledgments: 

Related GAO Products: 

Tables: 

Table 1: Portion of the Retail Price of a Gallon of 2 Percent Milk 
Received by Farmers, Cooperatives, Wholesale Processors, and Retailers 
for 15 Markets, October 2000 through May 2004: 

Table 2: Changes in the Farm-to-Retail Price Spread for a Gallon of 2 
Percent Milk for 15 Markets, October 2000 through May 2004: 

Table 3: Correlation between Farm Price Changes and Changes in 
Cooperative, Wholesale, and Retail Prices for a Gallon of 2 Percent 
Milk for 15 Markets, October 2000 through May 2004: 

Table 4: Correlation between Cooperative Price Changes and Changes in 
Wholesale and Retail Prices for a Gallon of 2 Percent Milk for 15 
Markets, October 2000 through May 2004: 

Table 5: Correlation between Wholesale and Retail Price Changes for a 
Gallon of 2 Percent Milk for 15 Markets, October 2000 through May 2004: 

Table 6: Average Annual Farm, Cooperative, Wholesale, and Retail Prices 
for a Gallon of 2 Percent Milk in Selected Markets, 2000: 

Table 7: Average Annual Farm, Cooperative, Wholesale, and Retail Prices 
for a Gallon of 2 Percent Milk in Selected Markets, 2001: 

Table 8: Average Annual Farm, Cooperative, Wholesale, and Retail Prices 
for a Gallon of 2 Percent Milk in Selected Markets, 2002: 

Table 9: Average Annual Farm, Cooperative, Wholesale, and Retail Prices 
for a Gallon of 2 Percent Milk in Selected Markets, 2003: 

Table 10: Average Annual Farm, Cooperative, Wholesale, and Retail 
Prices for a Gallon of 2 Percent Milk in Selected Markets, 2004: 

Table 11: Prices for a Gallon of Milk in Atlanta, Georgia, October 2000 
through May 2004: 

Table 12: Prices for a Gallon of Milk in Boston, Massachusetts, October 
2000 through May 2004: 

Table 13: Prices for a Gallon of Milk in Charlotte, North Carolina, 
October 2000 through May 2004: 

Table 14: Prices for a Gallon of Milk in Cincinnati, Ohio, October 2000 
through May 2004: 

Table 15: Prices for a Gallon of Milk in Dallas, Texas, October 2000 
through May 2004: 

Table 16: Prices for a Gallon of Milk in Denver, Colorado, October 2000 
through May 2004: 

Table 17: Prices for a Gallon of Milk in Miami, Florida, October 2000 
through May 2004: 

Table 18: Prices for a Gallon of Milk in Milwaukee, Wisconsin, October 
2000 through May 2004: 

Table 19: Prices for a Gallon of Milk in Minneapolis, Minnesota, 
October 2000 through May 2004: 

Table 20: Prices for a Gallon of Milk in New Orleans, Louisiana, 
October 2000 through May 2004: 

Table 21: Prices for a Gallon of Milk in Phoenix, Arizona, October 2000 
through May 2004: 

Table 22: Prices for a Gallon of Milk in Salt Lake City, Utah, October 
2000 through May 2004: 

Table 23: Prices for a Gallon of Milk in San Diego, California, October 
2000 through May 2004: 

Table 24: Prices for a Gallon of Milk in Seattle, Washington, October 
2000 through May 2004: 

Table 25: Prices for a Gallon of Milk in Washington, D.C., October 2000 
through May 2004: 

Table 26: Average Ownership and Operating Costs by Region and Herd 
Size, 2000: 

Table 27: USDA's Milk Classes Used for Setting Milk Prices: 

Table 28: Change in Costs for Fluid Milk Processing Plants in Maine, 
1993 through 2000: 

Table 29: Supermarket Operating Costs as a Percentage of Sales and 
Gross Margin, 2003: 

Table 30: Growth of Supermarket Sales and Expenses during the Last 
Decade, 1993 through 2003: 

Table 31: Market Share of the Top Four Food Retailers in Selected 
Markets, 2003: 

Table 32: Overview of Fluid Milk Price Transmission Studies and Results 
on Price Transmission Asymmetry/Symmetry: 

Table 33: Recent Price Transmission Studies of the Fluid Milk Market: 

Figures: 

Figure 1: Selected Milk Markets, Corresponding Defense Commissaries 
Used for Our Analysis, and Federal Milk Marketing Order Areas Prior to 
April 2004: 

Figure 2: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for Atlanta, Georgia, October 2000 through May 2004: 

Figure 3: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for Boston, Massachusetts, October 2000 through May 
2004: 

Figure 4: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for Charlotte, North Carolina, October 2000 through 
May 2004: 

Figure 5: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for Cincinnati, Ohio, October 2000 through May 2004: 

Figure 6: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for Dallas, Texas, October 2000 through May 2004: 

Figure 7: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for Denver, Colorado, October 2000 through May 2004: 

Figure 8: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for Miami, Florida, October 2000 through May 2004: 

Figure 9: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for Milwaukee, Wisconsin, October 2000 through May 
2004: 

Figure 10: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for Minneapolis, Minnesota, October 2000 through May 
2004: 

Figure 11: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for New Orleans, Louisiana, October 2000 through May 
2004: 

Figure 12: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for Phoenix, Arizona, October 2000 through May 2004: 

Figure 13: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for Salt Lake City, Utah, October 2000 through May 
2004: 

Figure 14: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for San Diego, California, October 2000 through May 
2004: 

Figure 15: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for Seattle, Washington, October 2000 through May 
2004: 

Figure 16: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for Washington, D.C., October 2000 through May 2004: 

Figure 17: Retail Prices in Atlanta, Georgia, for Whole, 2 Percent, 1 
Percent, and Skim Milk, October 2000 through May 2004: 

Figure 18: Retail Prices in Boston, Massachusetts, for Whole, 2 
Percent, 1 Percent, and Skim Milk, October 2000 through May 2004: 

Figure 19: Retail Prices in Charlotte, North Carolina, for Whole, 2 
Percent, 1 Percent, and Skim Milk, October 2000 through May 2004: 

Figure 20: Retail Prices in Cincinnati, Ohio, for Whole, 2 Percent, 1 
Percent, and Skim Milk, October 2000 through May 2004: 

Figure 21: Retail Prices in Dallas, Texas, for Whole, 2 Percent, 1 
Percent, and Skim Milk, October 2000 through May 2004: 

Figure 22: Retail Prices in Denver, Colorado, for Whole, 2 Percent, 1 
Percent, and Skim Milk, October 2000 through May 2004: 

Figure 23: Retail Prices in Miami, Florida, for Whole, 2 Percent, 1 
Percent, and Skim Milk, October 2000 through May 2004: 

Figure 24: Retail Prices in Milwaukee, Wisconsin, for Whole, 2 Percent, 
1 Percent, and Skim Milk, October 2000 through May 2004: 

Figure 25: Retail Prices in Minneapolis, Minnesota, for Whole, 2 
Percent, 1 Percent, and Skim Milk, October 2000 through May 2004: 

Figure 26: Retail Prices in New Orleans, Louisiana, for Whole, 2 
Percent, 1 Percent, and Skim Milk, October 2000 through May 2004: 

Figure 27: Retail Prices in Phoenix, Arizona, for Whole, 2 Percent, 1 
Percent, and Skim Milk, October 2000 through May 2004: 

Figure 28: Retail Prices in Salt Lake City, Utah, for Whole, 2 Percent, 
1 Percent, and Skim Milk, October 2000 through May 2004: 

Figure 29: Retail Prices in San Diego, California, for Whole, 2 
Percent, 1 Percent, and Skim Milk, October 2000 through May 2004: 

Figure 30: Retail Prices in Seattle, Washington, for Whole, 2 Percent, 
1 Percent, and Skim Milk, October 2000 through May 2004: 

Figure 31: Retail Prices in Washington, D.C., for Whole, 2 Percent, 1 
Percent, and Skim Milk, October 2000 through May 2004: 

Figure 32: Map of Federal Milk Marketing Orders: 

Figure 33: Number of Fluid Milk Processing Plants and Volume of Milk 
Processed per Plant, 1980 through 2002: 

Figure 34: Percentage of Retail Food Sales by Market Segment, 1993 and 
2003: 

Figure 35: Marketing Chain and Price Transmission for the U.S. Fluid 
Milk Industry: 

Figure 36: Potential Effects of Options to Change FMMOs on Various 
Policy Considerations: 

Figure 37: Potential Effects of Options to Change the Price Support 
Program on Various Policy Considerations: 

Figure 38: Potential Effects of Options to Extend MILC on Various 
Policy Considerations: 

Figure 39: Potential Effects of Adopting the NDEA on Various Policy 
Considerations: 

Figure 40: Potential Effects of Changing Trade Restrictions and Export 
Incentives on Various Policy Considerations: 

Figure 41: Potential Effects of Options to Facilitate Risk Management 
on Various Policy Considerations: 

Figure 42: Potential Effects of Options to Manage Raw Milk Supplies on 
Various Policy Considerations: 

AMS: Agricultural Marketing Service: 

CCC: Commodity Credit Corporation: 

DEIP: Dairy Export Incentive Program: 

FMMO: federal milk marketing order: 

FSA: Farm Service Agency: 

MILC: Milk Income Loss Contract: 

NDEA: National Dairy Equity Act: 

NEDC: Northeast Interstate Dairy Compact: 

NYC: New York City: 

UNY: Upstate New York: 

USDA: U.S. Department of Agriculture: 

WTO: World Trade Organization: 

Letter December 29, 2004: 

Congressional Requesters:

In 2003, U.S. dairy farmers marketed nearly 19.7 billion gallons of raw 
milk for which they received approximately $21.2 billion. Roughly one-
third of these 19.7 billion gallons were ultimately sold to consumers 
as fluid milk (milk) products. The milk marketing chain that moves milk 
from the dairy farm to the consumer is composed of farmers, dairy 
cooperatives,[Footnote 1] wholesale milk processors,[Footnote 2] and 
retailers, and entities at each level receive a portion of the retail 
price of a gallon of milk for the functions they perform. These 
functions include producing, processing, distributing, and selling 
milk. During 2002 and 2003, farm prices were the lowest since 1979, 
while retail milk prices generally did not experience a similar 
decline.[Footnote 3] This disparity raised concerns about a growing 
price spread between farm and retail milk prices. However, in 2004, 
farm price trends have reversed, with farm prices reaching record 
highs.

Since the 1930s, the U.S. Department of Agriculture (USDA) and some 
states have operated programs designed to support dairy farmers by 
ensuring that farm prices do not fall below minimum levels. These 
programs include, among others, federal milk marketing orders (FMMOs), 
which use formulas to establish minimum farm prices in different 
marketing areas of the country; a price support program to sustain farm 
prices through a standing offer to purchase certain milk products at 
set prices; and trade restrictions or export subsidies to protect the 
U.S. milk industry from competition from foreign milk products or 
reduce supplies.

Low farm prices have generated interest in new federal policies to 
provide assistance to dairy farmers; however, the cost of these 
programs during periods of low prices has raised concerns. For example, 
in the Farm Security and Rural Investment Act of 2002 (the 2002 Farm 
Bill), Congress authorized USDA to establish the Milk Income Loss 
Contract (MILC) program, which provides supplemental payments to 
farmers during periods of low prices.[Footnote 4] Depressed farm prices 
triggered $1.8 billion in MILC payments to dairy farmers in fiscal year 
2003. Additionally, USDA spent over $1.5 billion in fiscal years 2001 
through 2003 attempting to maintain minimum farm prices at a 
legislatively set level through the price support program.

Recent changes in milk prices have illustrated the volatility of milk 
price cycles. For example, as of April 2004, farm prices reached record 
highs as USDA announced a minimum price for raw milk used in 
manufacturing cheese that was approximately 36 percent higher, at 
$19.66 per hundredweight, than the March price of $14.49 per 
hundredweight, an increase of nearly $0.45 per gallon of milk.[Footnote 
5] This increase reflected a number of changed market conditions that 
decreased the amount of raw milk production, while also increasing the 
demand for some manufactured dairy products.[Footnote 6] However, high 
farm prices create incentives for farmers to produce more milk, which 
then tends to depress milk prices over the long term, thereby 
increasing concerns about farm viability in the future.

At your request, this report examines (1) what portion of the retail 
price of fluid milk is received by dairy farmers, dairy cooperatives, 
wholesale milk processors, and retailers in selected markets throughout 
the United States, how this distribution has changed over the period of 
our review (October 2000 through May 2004), and the relationships among 
price changes at these levels; (2) how various factors, such as costs, 
influence the price of milk as it moves from the farm to the consumer, 
as well as how these and other factors affect the extent to which 
changes in price are transmitted among levels as milk moves from the 
farm to the consumer; and (3) how changes in dairy policies and 
alternative policy options have affected or might affect farm income, 
federal costs, economic efficiency,[Footnote 7] and consumer prices, 
among other policy considerations. It also updates other information on 
milk prices included in our June 2001 report.[Footnote 8]

To update our information on the pricing distribution among the various 
levels of the milk marketing chain, we analyzed milk prices in 15 
selected markets nationwide, ensuring that (1) these markets provided 
national geographic coverage; (2) at least one market was located in 
each of the federal milk marketing order areas, as they existed during 
the majority of the period from October 2000 through May 2004; (3) the 
selected markets included both state and federally regulated markets; 
and (4) these areas represented similar marketing areas for which we 
reported information in our June 2001 report.[Footnote 9] For these 15 
markets, we obtained data from USDA, the cognizant state milk control 
agency, the Department of Defense's Commissary Agency, and a private 
data collection company on the prices received by farmers, 
cooperatives, wholesale milk processors, and retailers.[Footnote 10] We 
limited our data collection efforts to whole, skim, 2 percent, and 1 
percent milk as sales of these milk types constitute over 93 percent of 
fluid milk sales annually. We also confined our analysis to the prices 
of these milk types sold in gallon containers as milk sold in gallon 
containers accounts for about 65 percent of fluid milk products sold 
under FMMOs.[Footnote 11] We focused our detailed data analysis on 2 
percent milk sold in gallon containers, the largest volume of reduced-
fat milk sold nationwide. As a result, our analysis may not reflect 
pricing trends for all types of milk and package sizes.

To update our information on factors influencing milk prices, explore 
price transmission within the milk marketing chain, and examine the 
effects of federal dairy policy changes and alternative policy options, 
we contacted a number of national dairy experts in academia or 
representing federal and state agencies, cooperatives, processors, 
retailers, or industry groups. We also reviewed relevant legislation, 
studies, and other publications. We qualitatively analyzed the effects 
of recent changes in federal dairy programs, as well as alternative 
policy options, on various policy considerations as identified in 
previous GAO reports, relevant studies, and legislation, as well as 
through our conversations with dairy policy experts. These policy 
considerations included farm income, milk production, federal costs, 
price volatility, economic efficiency, and consumer prices. Different 
stakeholders in the dairy policy arena may have alternative views on 
the relative importance of these policy considerations, as well as 
other considerations that we did not include, which could lead to 
differing perspectives on these options. We conducted our review from 
September 2003 through October 2004 in accordance with generally 
accepted government auditing standards. We did not independently verify 
the data we received from various sources. However, we discussed with 
these sources the measures they take to ensure the accuracy of data, 
and these measures seemed reasonable. Appendix I provides additional 
information on the scope and methodology of our review.

In summary, we found the following: 

* Between October 2000 and May 2004, on average, farmers received 45.9 
percent, cooperatives 6.1 percent, wholesale milk processors 35.6 
percent, and retailers 12.5 percent of the retail price of a gallon of 
2 percent milk in the 15 markets we reviewed. However, these 
percentages varied widely depending on the specific market. For 
example, the farmers' portion ranged from 36.0 percent to about 58.6 
percent.

* Furthermore, during this time period, the price spread between farm 
and retail prices increased in 12 of the 15 markets we examined. 
However, in some of the 12 markets, the spread between farm and retail 
milk prices increased dramatically, and then moderated. In 9 of the 15 
markets, retail prices showed a statistically significant increase. In 
4 of the remaining markets, retail prices decreased over time, while in 
the other 2 markets, retail prices showed no statistically significant 
change. At the same time, farm prices decreased in 12 of the 15 markets 
and increased in the remaining 3 markets during the 44-month period. 
However, declines in farm prices, in most cases, began to reverse 
during the latter months of our period of analysis. Price changes 
generally correlated across levels in the marketing chain, with the 
strongest correlations occurring between adjacent levels. For example, 
in most of the markets we analyzed, changes in cooperative prices 
correlated strongly with changes in wholesale prices. However, changes 
in cooperative prices correlated less strongly with changes in retail 
prices.

* Prices at all levels of the milk marketing chain are determined by 
the interaction of a number of factors. For example, farm prices are 
determined primarily by factors affecting the supply of raw milk, such 
as costs of production; the demand for milk products, such as fluid 
milk, cheese and butter; and the effects of federal and state dairy 
programs. At the cooperative level, the difference between what 
cooperatives pay farmers for raw milk and the prices at which they sell 
raw milk to wholesale fluid milk processors is influenced by the types 
of services the cooperatives provide, the relative bargaining power of 
cooperatives and milk processors, as well as collective action taken by 
dairy cooperatives. Factors that affect the difference between what 
processors pay for this raw milk and the prices at which they sell 
fluid milk products to retailers include input costs, such as labor, 
energy, transportation and packaging; the level of services they 
provide to retailers; innovations in processing technology; and changes 
in the structure of the fluid milk processing industry, such as 
increases in the consolidation and market share of some firms. At the 
retail level, costs such as labor and energy, along with other factors 
such as consumer demand and the structure of the market, help determine 
the difference between what retailers pay for fluid milk products and 
the prices they charge consumers for those products.

* While price changes at one level of the milk marketing chain are 
generally reflected in price changes at other levels, several factors 
can influence the extent or speed at which these changes are reflected 
and whether price increases and decreases are reflected differently. 
For example, increasing concentration, resulting in greater market 
power at successive levels of the milk marketing chain, may provide 
entities an opportunity to influence how changes in prices are 
transmitted among the different levels. In addition, other factors, 
such as federal and state dairy policies, can affect prices in ways 
that can cause market participants to alter the way they transmit price 
changes between marketing levels. Some recent economic studies of the 
U.S. fluid milk market have found that these and other factors may 
cause retail milk prices to react more completely and quickly to farm 
price increases than to decreases.

* Recent changes in the FMMO program, adjustments to the prices of 
products purchased under the price support program, and the 
establishment of the MILC program have had various impacts on policy 
considerations such as dairy farm income, federal costs, and price 
volatility. Reforms to the FMMO system had mixed effects on farm income 
depending on the geographic location of the farmer, while the overall 
effects on all farmers are less clear. Further, recent adjustments to 
the prices of products purchased under the price support program have 
generally decreased federal costs but also decreased farm income during 
periods of low prices. Finally, government payments introduced through 
the MILC program have kept some small dairy farms in business, but the 
program has exceeded initial federal cost estimates because farm prices 
during 2002 and 2003 were lower than anticipated.

* A number of options that would modify existing policies or introduce 
alternative policies have been proposed or discussed. While we examined 
the potential impacts of these options on a range of policy 
considerations related to the dairy sector, we did not assess their 
overall economic or budgetary impacts or their consistency with U.S. 
international trade commitments or positions in ongoing negotiations. 
As a result, the purpose of this analysis is not to take a position for 
or against any of these options, but simply to discuss their likely 
effects on the policy considerations we identified. Various policy 
options could affect dairy policy considerations in different ways 
under different scenarios, such as periods of high or low prices. Also, 
short-term effects may differ from long-term effects. In general, 
options that increase farm income over the short term also tend to 
increase milk production and thus the potential for oversupply and 
lower average farm prices over the long term. For example, the dairy 
support price could be raised, which would limit the fall of farm 
prices and increase farm income in the short term. However, it would 
spur additional production and therefore reduce average farm prices 
over the long term. Such options also tend to be costly for the federal 
government during periods of low prices. Thus, extending the MILC 
program, which is scheduled to expire at the end of September 2005, 
would allow the federal government to continue to support farm income 
but could also increase federal costs if farm prices trend downward in 
the future. In some cases, options that increase the economic 
efficiency of federal dairy programs also increase price volatility 
because they allow clearer transmission of market price signals. For 
example, eliminating the price support program would increase 
volatility by removing the price floor on manufactured dairy products, 
but it would also increase economic efficiency by reducing incentives 
to allocate resources to surplus production. Also, to the extent that 
price changes at the wholesale level are passed through to the retail 
level, a number of options would likely have mixed effects on consumer 
prices depending upon the particular product under consideration (e.g., 
butter, cheese, or fluid milk).

As a result of recent farm bills, such as those in 1996 and 2002, USDA 
has studied different aspects of dairy policy, either to implement 
program changes mandated by the Congress or to provide information to 
the Congress on the effects of various dairy programs. For example, the 
2002 farm bill required USDA to conduct studies of dairy policy issues, 
including an economic evaluation of the effects of various elements of 
the national dairy policy and of terminating federal dairy programs 
relating to milk price support and supply management. One study 
required by this legislation, which addressed the subject of changing 
standards for fluid milk, was issued in August 2003.[Footnote 12] A 
second study, which included both an evaluation of the effects of 
various elements of the national dairy policy and the termination of 
federal milk price support and supply management programs, was provided 
to the Congress in September 2004.[Footnote 13]

This report is divided into nine appendixes. Appendix I describes in 
detail our objectives, scope, and methodology. Appendix II provides 
information on average milk prices at the farm, cooperative, wholesale, 
and retail levels; changes in farm and retail milk prices and how they 
affect the farm-to-retail price spread; and the extent to which price 
changes at one level of the milk marketing chain correlate with price 
changes at other levels. Appendix III compares retail prices of whole, 
2 percent, 1 percent, and skim milk. Appendix IV provides the average 
monthly prices and annual prices of the four types of milk at each 
level of the milk marketing chain. Appendix V describes the factors 
that influence prices as milk moves from the farmer to the consumer. 
Appendix VI provides a technical review of recent research examining 
price transmission within the milk marketing chain. Appendix VII 
provides a qualitative analysis of the effects of recent changes in 
federal dairy programs and alternative dairy policy options that have 
been proposed or discussed. Appendix VIII presents USDA's comments and 
our evaluation of them. Appendix IX lists GAO contacts and contributors 
to this report.

Conclusions: 

The difference in price between what farmers receive for their raw milk 
and what consumers pay for fluid milk products has increased in recent 
years. This growing spread between farm and retail prices may be 
attributable to a number of factors at each level of the milk marketing 
chain, including supply and demand forces, changes in input costs to 
processing and retailing, and the continued concentration of 
cooperatives, wholesale milk processors, and retailers. A variety of 
federal policies exist to influence the prices that farmers receive. 
However, the effects of these policies may not be uniform; they can 
affect different sizes of farms or regions of the country in different 
ways. Moreover, policies that benefit farm income may adversely affect 
other policy considerations such as economic efficiency and federal 
costs. Given the complexity of federal dairy policy, the decision to 
change existing policies or introduce new policies requires 
consideration of a variety of these potential effects. Examining the 
effects of policy alternatives on a variety of different policy 
considerations will help the Congress formulate federal dairy policy 
based on comprehensive analyses that consider these alternatives in 
relation to their effects on different considerations, farm sizes, and 
regions of the country. In addition, although recent USDA studies have 
examined some policy options, there are other potential policy options 
to consider, as discussed in this report.

Recommendations for Executive Action: 

To continue the facilitation of informed decision making by USDA and 
the Congress, we recommend that the Secretary of Agriculture build on 
GAO's analysis of the potential effects of various dairy policy options 
as USDA proposes future changes to current dairy laws or regulations or 
provides information to the Congress in response to congressional 
proposals.

Agency Comments and Our Evaluation: 

We provided a draft of this report to USDA and DOD for their review and 
comment. We received written comments from USDA's Under Secretary for 
Farm and Foreign Agricultural Services and Under Secretary for 
Marketing and Regulatory Programs, which are presented in appendix 
VIII. USDA also provided suggested technical corrections, which we have 
incorporated into this report, as appropriate. These technical 
corrections were offered by several USDA agencies, including the 
Agricultural Marketing Service, Economic Research Service, Farm Service 
Agency, and Office of the Chief Economist. DOD had no comments on the 
draft report.

In its written comments, USDA said the information provided in the 
report on milk prices at the farm, cooperative, and retail levels is 
valid. However, USDA said it has reservations regarding our use of 
prices paid for fluid milk at commissaries as an indicator of the 
wholesale price of fluid milk and that we should make clear the 
weaknesses of using commissary price data. USDA acknowledged, however, 
that there seems to be no viable alternative. During the course of our 
work, we were unable to obtain wholesale price data because these data 
are considered proprietary by industry officials. After consulting with 
USDA officials and other dairy experts, we determined that commissary 
price data were the best surrogate because commissaries generally sell 
milk at a standard 5 percent markup from cost. Based on USDA's 
comments, we expanded the discussion in the report of the potential 
limitations of using commissary data.

USDA said it largely agrees with the report's discussion of the factors 
that influence the price of milk as it moves from the farm to the 
consumer and the report's characterization of economic studies of price 
transmission in the U.S. fluid milk market. However, USDA expressed 
some concerns regarding the report's discussion of recent federal dairy 
program changes and alternative policy options. First, USDA said that 
this discussion appears to be a compilation of policy recommendations 
that are examined independently and qualitatively within the existing 
program structure. Our discussion of dairy policy options are not 
policy recommendations. As stated in the report, to identify these 
policy options and their potential impacts we relied heavily on a 
synthesis of the views of leading dairy experts and the results of an 
extensive literature search, including our review of more than 50 
studies and other publications. Time and resource constraints for 
completing our work precluded us from developing or contracting for the 
use of an economic model that would have provided quantitative 
estimates of these potential impacts. In addition, some of the policy 
options would have been difficult to model and quantify, such as the 
potential impacts of accelerating USDA's hearing and rulemaking process 
for amending FMMOs. The report also notes that we compared the policy 
options identified against a baseline scenario of policies in place as 
of August 2004. This baseline scenario existed at the start of our work 
and was needed to provide a consistent context for our analysis.

Second, USDA suggested that we make clear the caveats of this type of 
analysis. As noted in the report, we examined the impact of federal 
dairy program changes and policy options on six policy considerations: 
farm income, milk production, federal costs, price volatility, economic 
efficiency, and consumer prices. We acknowledge that other stakeholders 
may have different views on the importance of these policy 
considerations, or other considerations that we did not include in our 
analysis. The report also states that the potential effects of policy 
options on these considerations could vary depending upon economic 
conditions and other policy decisions. In this regard, we did not 
assess the options' overall economic or budgetary impacts, or their 
consistency with U.S. international trade commitments or positions in 
ongoing negotiations. In addition, the report does not identify a 
preferred option or combination of options. As indicated in the report, 
each option has varying potential impacts on the policy considerations 
used in our analysis. Despite these caveats, we believe this analysis 
is informative and helpful to congressional decision makers who must 
weigh competing interests in determining dairy policy.

USDA also said that in some cases the report mischaracterizes the 
operation of current programs and the effects that changes to current 
programs or the introduction of new programs would have on program 
outlays, producers, and consumers. For example, USDA noted that the 
report offers several options for improving the operation of the Dairy 
Export Incentive Program (DEIP), including expanding the use of this 
program. However, USDA indicated that expanding the use of DEIP is not 
a legitimate option because, under World Trade Organization (WTO) 
rules, DEIP is bound by quantitative and monetary caps and product-
specific restrictions that limit its use to the current range of 
eligible dairy commodities. We do not agree that we mischaracterized 
the operation of this program. The report clearly states that USDA has 
announced and awarded subsidies under DEIP to the limits allowed by WTO 
rules for nonfat dry milk and various cheeses. Regarding expansion, the 
report discusses options suggested by dairy experts for the additional 
use of this program as an effective marketing tool, and does not call 
for expanding its use to exceed relevant WTO caps or restrictions. 
However, we have adjusted the language in the report to make this 
distinction clearer.

USDA also offered several comments regarding the FMMO program. Among 
these, USDA said that the report is incorrect in stating that the 
objective of this program is "to ensure an adequate level of milk 
production." According to USDA, this objective is associated with the 
Dairy Price Support Program. We have revised the report to reflect this 
clarification and added language suggested by USDA to better describe 
the FMMO program's objectives.

In addition, USDA raised concerns about the practicality of 
implementing some of the options discussed in the report, particularly 
(1) adopting a competitive pay price to establish class prices under 
the FMMO program and (2) combining Class III and Class IV into a single 
manufacturing class.[Footnote 14] Regarding the first, USDA said that 
it and a committee of academicians spent considerable time several 
years ago trying to devise a competitive price series that could be 
used to establish minimum class prices. However, this effort was 
unsuccessful. USDA said that our report does not identify or indicate 
how to create such a price series. Similarly, regarding combining Class 
III and Class IV, USDA notes that no specifics are offered in the 
report as to how milk in such a class would be priced. We acknowledge 
that the report does not explain how a competitive price series could 
be created or how milk would be priced if the classes were merged. 
However, these options were identified by stakeholders during the 
course of our work. Other options discussed in the report also may 
present challenging implementation issues and in many cases the report 
discusses those issues.

Finally, USDA said that it does not believe the hearing and rulemaking 
process it uses to modify FMMOs inhibits its ability to respond to 
changing market conditions or the marketing of new dairy products. 
However, as discussed in the report, some stakeholders cited the 
slowness of this process as a concern. In addition, the report 
discusses USDA's efforts to improve this process to more quickly 
respond to problems or needed changes while ensuring the promulgation 
of economically sound regulation.

USDA did not comment on the report's recommendation.

As agreed with your offices, unless you publicly announce its contents 
earlier, we plan no further distribution of this report until 30 days 
from the date of this letter. We will then send copies of the report to 
the Senate Committee on Agriculture, Nutrition, and Forestry; the House 
Committee on Agriculture; other appropriate congressional committees; 
interested Members of Congress; the Secretary of Agriculture; the 
Secretary of Defense; the Director of the Office of Management and 
Budget; and other interested parties. Copies will also be made 
available to others upon request. In addition, the report will be 
available at no charge on GAO's Web site at 
[Hyperlink, http://www.gao.gov].

If you or your staff have any questions about this report, please 
contact me at (202) 512-3841. Key contributors to this report are 
listed in appendix IX.

Signed by: 

Lawrence J. Dyckman: 
Director, Natural Resources and Environment: 

List of Requesters: 

The Honorable Olympia J. Snowe: 
Chair: 
Committee on Small Business & Entrepreneurship: 
United States Senate: 

The Honorable Hillary Rodham Clinton: 
United States Senate: 

The Honorable Susan Collins: 
United States Senate: 

The Honorable Christopher J. Dodd: 
United States Senate: 

The Honorable James M. Jeffords: 
United States Senate: 

The Honorable Edward M. Kennedy: 
United States Senate: 

The Honorable John F. Kerry: 
United States Senate: 

The Honorable Patrick Leahy: 
United States Senate: 

The Honorable Barbara A. Mikulski: 
United States Senate: 

The Honorable John D. Rockefeller IV: 
United States Senate: 

The Honorable Paul S. Sarbanes: 
United States Senate: 

The Honorable Charles E. Schumer: 
United States Senate: 

The Honorable Arlen Specter: 
United States Senate:

[End of section]

Appendixes: 

Appendix I: Objectives, Scope, and Methodology: 

In March 2003, Senator Snowe, Chair, Committee on Small Business and 
Entrepreneurship, joined by Senators Clinton, Collins, Dodd, Jeffords, 
Kennedy, Kerry, Leahy, Mikulski, Rockefeller IV, Sarbanes, Schumer, and 
Specter requested that GAO examine a number of issues concerning the 
pricing and marketing of milk in the United States. Specifically, they 
asked us to update the information contained in our 2001 report, 
entitled Dairy Industry: Information on Milk Prices and Changing Market 
Structure ([Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-01-561], 
June 15, 2001), and to address other issues. This report examines (1) 
what portion of the retail price of fluid milk is received by dairy 
farmers, dairy cooperatives, wholesale milk processors, and retailers 
in selected markets throughout the United States, how this distribution 
has changed over the period of our review, and the relationships among 
price changes at these levels; (2) how various factors, such as costs, 
influence the price of milk as it moves from the farm to the consumer, 
as well as how these and other factors affect the extent to which 
changes in price are transmitted among levels as milk moves from the 
farm to the consumer; and (3) how changes in dairy policies and 
alternative policy options have affected or might affect farm income, 
federal costs, economic efficiency, and consumer prices, among other 
policy considerations.[Footnote 15] It also updates other information 
on milk prices included in our June 2001 report.

To update our information on the price distribution among the various 
levels of the milk marketing chain, we analyzed milk prices in 15 
selected markets nationwide: Atlanta, Georgia; Boston, Massachusetts; 
Charlotte, North Carolina; Cincinnati, Ohio; Dallas, Texas; Denver, 
Colorado; Miami, Florida; Milwaukee, Wisconsin; Minneapolis, 
Minnesota; New Orleans, Louisiana; Phoenix, Arizona; Salt Lake City, 
Utah; San Diego, California; Seattle, Washington; and Washington, 
D.C.[Footnote 16] In selecting these markets, we ensured that (1) they 
provided national geographic coverage; (2) at least one market was 
located in each of the federal milk marketing orders (FMMOs) as they 
existed during most of the period from October 2000 through May 2004; 
(3) the selected markets included both state and federally regulated 
markets; and (4) these areas represented similar marketing areas for 
which we reported information in our June 2001 report. For the 15 
markets, we collected data on the prices received by farmers, 
cooperatives, wholesale milk processors, and retailers for October 2000 
through May 2004. We limited our data collection efforts to the prices 
of whole, 2 percent, 1 percent, and skim milk because sales of these 
milk types constitute over 93 percent of fluid milk sales annually. We 
also confined our analysis to the prices of these milk types sold in 
gallon containers because milk sold in gallon containers accounts for 
about 65 percent of fluid milk products sold under FMMOs.[Footnote 17]

There is no precise method for calculating the price that farmers 
receive for raw milk that is ultimately processed and sold in fluid 
milk products because dairy farmers receive a blend price for their 
milk, which is the average price for milk used for fluid and 
manufactured products. Therefore, any calculation of the value received 
by farmers for raw milk that is to be used for fluid milk products is 
necessarily only approximate. To estimate a farm price for raw milk 
used in fluid milk products, we used data provided by the U.S. 
Department of Agriculture's (USDA) Agricultural Marketing Service 
(AMS). AMS developed an adjustment, which accounts for various charges 
such as hauling and marketing fees, that we subtracted from the 
announced cooperative Class I price to obtain the estimated farm price 
for raw milk used in fluid milk products for each of the selected 
markets in our review except San Diego, which is not part of the FMMO 
system.[Footnote 18] AMS's adjustment accounts for farm-to-plant 
hauling costs, cooperative dues and capital assessment, mandatory 
advertising and promotion costs, competitive and receiving credits, and 
a representative estimate of the value of reimbursements to 
cooperatives for the services performed for handlers and for 
transportation costs not covered by the order minimum price.[Footnote 
19] Most of the items that make up the adjustment are not available for 
the specific fluid milk market that we selected, but rather are based 
on information collected for milk used over wider geographical areas. 
Therefore, an order-wide value used for any of these items provides an 
estimate rather than the actual value for this item. Also, the values 
for two of the adjustment items--reimbursements to cooperatives for 
services performed for handlers and for transportation costs not 
covered by the order minimum price--were not readily available so they 
were estimated indirectly based on other reported data and, in some 
cases, on anecdotal information provided by industry members. However, 
despite these limitations, AMS believes that the estimated farm price 
is a good representation of the price that dairy farmers receive for 
raw milk used in fluid milk products. For the farm price for San Diego-
-a state-regulated market--we used mailbox price data collected by the 
California Department of Food and Agriculture. The mailbox price is the 
weighted average of the prices received by dairy farmers in the market 
for all of their raw milk sold and therefore is computed as the total 
net dollars received for milk divided by the total pounds of milk 
marketed.[Footnote 20] This price is likely to be lower than the price 
received for milk used for fluid purposes because the prices for milk 
used for manufacturing purposes are generally lower. However, it is the 
best measure we could obtain.

To determine cooperative prices, we used AMS data on announced 
cooperative prices to represent prices that wholesale milk processors 
paid to cooperatives. Wholesale milk processors in federally regulated 
markets generally purchase milk from cooperatives and pay the federal 
minimum price for milk plus premiums that are negotiated between 
cooperatives and wholesale milk processors. The announced cooperative 
price is the Class I milk price announced by the major cooperative in 
each of the markets. This price does not apply to all Class I sales in 
federally regulated markets and is not necessarily the price actually 
received for all of the milk sold by the major cooperative; the 
announced cooperative prices have not been verified by USDA as actually 
having been paid by processors. For San Diego, we used the minimum 
fluid prices established by the state of California. Data on the 
premiums paid in excess of these minimums were not available for this 
market. (See app. V for a detailed discussion of over-order premiums.)

To determine wholesale prices, we used the prices paid at Department of 
Defense Commissary Agency locations. The Defense Commissary Agency 
purchases milk under competitive and noncompetitive contracts with 
wholesalers. We used commissary prices as surrogates for privately 
established wholesale prices because (1) defense commissaries sell 
groceries at a standard 5 percent markup from cost to active and 
retired military personnel and (2) wholesale price data are considered 
proprietary by industry officials and were not available to us. The 
commissary network of stores ranks twelfth in the United States in 
sales volume for supermarket chains. We selected 39 different 
commissary locations near the 15 markets we reviewed, and the Defense 
Commissary Agency provided us with weekly prices paid by consumers at 
these locations for gallons of whole, 2 percent, 1 percent, and skim 
milk.[Footnote 21] We averaged these weekly prices to obtain monthly 
prices. We then adjusted these monthly prices to account for the 5 
percent markup. Where we had multiple commissary locations for a 
market, we averaged the adjusted monthly prices to obtain a wholesale 
price for the market. We recognize that these locations may not provide 
an ideal match with other price data analyzed for a given location; for 
example, in some markets the available commissary locations were not in 
close proximity to the selected marketing areas. Also, wholesale 
processors may provide these commissary locations with different levels 
of service than they do for retailers in these markets.[Footnote 22] In 
such cases, the prices paid by these commissaries for fluid milk may 
have been different than the prices that retailers in the selected 
markets paid to their wholesale suppliers. However, these were the best 
wholesale data that we could obtain. In those locations where 
commissaries sold more than one brand of milk, we used the price for 
the brand that had the highest sales volume for a particular period.

For retail prices, we contracted with Information Resources, Inc., a 
private data collection and analysis company, to obtain average weekly 
retail prices for whole, 2 percent, 1 percent, and skim milk sold in 
gallon containers. These data represented a weighted average of prices 
at supermarkets with yearly sales exceeding $2 million for the markets 
included in our analysis. We then averaged these weekly prices to 
obtain monthly prices. We were unable to obtain data from some types of 
nonsupermarket retailers such as mass merchandisers, thus the retail 
pricing data that we present may not be representative of fluid milk 
prices at those locations. Figure 1 shows the locations of the 15 
selected markets, the corresponding commissaries, and the federal milk 
marketing order areas.

Figure 1: Selected Milk Markets, Corresponding Defense Commissaries 
Used for Our Analysis, and Federal Milk Marketing Order Areas Prior to 
April 2004: 

[See PDF for image] 

Note: The Western Order was terminated as of April 1, 2004. However, 
because the order existed during the majority of our period of analysis 
we chose to include the data in this report. Farm and cooperative level 
prices for this order for April and May 2004 were provided by USDA 
based on what they would have been had the order still existed.

[End of figure] 

To determine (1) the portion of the retail price of a gallon of milk 
received by farmers, cooperatives, wholesale milk processors, and 
retailers; (2) how changes in retail and farm prices affect the farm-
to-retail price spread; and (3) how price changes at any level of the 
marketing chain correlate to changes in prices at other levels, we 
limited our analysis to 2 percent milk, which currently represents the 
largest volume of reduced-fat milk sold nationwide. Therefore, our 
analysis of 2 percent prices may not necessarily reflect pricing 
patterns and trends for the other three kinds of milk. Appendix II 
includes graphs that show the relationships among the farm, 
cooperative, wholesale, and retail prices for a gallon of 2 percent 
milk for each of the 15 markets. Because farm and cooperative prices 
reflect a higher milkfat content than that in 2 percent milk, we 
adjusted these prices to reflect the value of removing milkfat and 
replacing it with skim milk.[Footnote 23] This adjustment allowed us to 
use farm and cooperative prices that were comparable to the wholesale 
and retail prices for our analysis.

To determine the degree that farm and retail prices had changed and the 
effect these changes had on the farm-to-retail price spread from 
October 2000 through May 2004 for each of the 15 markets, we used a 
statistical procedure to estimate farm-level and retail prices at the 
beginning and end of the period.[Footnote 24] We relied on estimated 
rather than actual prices to reduce the influence of the starting and 
ending months and years selected for our analysis in markets in which 
milk prices varied from month to month. We used the differences between 
the estimated initial and final prices to represent the changes during 
the period. When our statistical procedure did not find a consistent 
association between prices and time, we treated the difference in the 
estimated initial and final prices as zero. We calculated the change in 
the farm-to-retail price spread as the estimated retail price 
difference minus the estimated farm price difference.

To describe the relationship between price changes at any given level 
in the milk marketing chain and price changes at the other levels, we 
tested for correlations between price changes at the various levels for 
each of the 15 markets included in our analysis. Specifically, we 
calculated coefficients describing the degree of correlation between 
changes in farm prices and price changes at the cooperative, wholesale, 
and retail levels; price changes at the cooperative level and price 
changes at the wholesale and retail levels; and price changes at the 
wholesale and retail levels. In appendix II, we report those 
correlation coefficients and indicate which are statistically different 
from zero at the 95 percent confidence level.

To update information provided in our June 2001 report on the retail 
prices for four kinds of milk, we analyzed the retail price data that 
we obtained from Information Resources, Inc. We array these data in 
appendix III for each of the selected 15 markets for October 2000 
through May 2004.

To update information provided in our June 2001 report on average 
monthly and annual farm and cooperative prices, and wholesale and 
retail prices for different kinds of milk, we analyzed data obtained 
from USDA, the California Department of Food and Agriculture, the 
Department of Defense Commissary Agency, and Information Resources, 
Inc. We report these data in appendix IV for each of the selected 15 
markets for October 2000 through May 2004.

To update our information on the major factors influencing milk prices 
and explore price transmission within the milk marketing chain, we 
conducted more than 50 interviews with national dairy experts working 
with the federal and state governments,[Footnote 25] cooperatives,
[Footnote 26] processors,[Footnote 27] retailers,[Footnote 28] or 
industry groups,[Footnote 29] or in academia.[Footnote 30] We also 
reviewed a number of relevant studies and publications from USDA and 
other sources. Where possible, we obtained data on production costs, 
services provided by cooperatives, as well as inputs to processing and 
retailing. We also obtained information on concentration and market 
power at each level of the milk marketing chain. We present information 
on the factors influencing the price of milk in appendix V.

To compare the results and methodologies of various studies looking at 
the issue of price transmission in fluid milk marketing from the farm 
to the retail level, we performed a technical review of 14 academic 
studies conducted over the past 10 years, looking at model 
descriptions, assumptions, and results. We also spoke with the 
economists involved in these studies concerning their model results and 
the causes of differences in fluid milk price transmission across 
markets. The scope of these studies encompassed national, regional, and 
city-level models of fluid milk price transmission. Appendix VI 
provides a summary of our review of price transmission and the various 
price transmission studies.

To identify and examine the effects of federal dairy program changes 
and alternative policy options, we contacted many of the same dairy 
experts previously mentioned. We also conducted an extensive literature 
search and reviewed more than 50 relevant studies and other 
publications we identified. We qualitatively analyzed the effects of 
federal dairy program changes and policy options we identified on six 
main policy considerations: farm income, milk production, federal 
costs, price volatility, economic efficiency, and consumer prices. We 
evaluated impacts on these policy considerations under both high-and 
low-price scenarios, over the short and long terms. We identified these 
policy considerations by reviewing previous GAO reports, relevant 
studies, and legislation, as well as through our conversations with 
dairy policy experts. Different stakeholders in the dairy policy arena 
may have alternative views on the relative importance of these policy 
considerations, as well as other considerations that we did not 
include, which could lead to differing perspectives on these options. 
In addition, the potential effects of policy options on these 
considerations could vary depending upon economic conditions and other 
policy decisions. We compared the dairy policy options we identified 
against a baseline scenario of the policies in place as of August 2004: 
FMMO regulations, a Milk Income Loss Contract (MILC) program that is 
scheduled to expire at the end of fiscal year 2005, a price support 
program at $9.90 per hundredweight, a Dairy Export Incentive Program 
(DEIP), trade restrictions, and milk regulatory policies in some 
states. We include a discussion of the effects of recent federal dairy 
program changes and alternative policy options in appendix VII.

We conducted our review from September 2003 through October 2004 in 
accordance with generally accepted government auditing standards. We 
did not independently verify the data we received from various sources. 
However, we discussed with these sources the measures they take to 
ensure the accuracy of the data, and these measures seemed reasonable. 
Additionally, we consulted with the following dairy experts concerning 
the results of our analysis of price transmission within the milk 
marketing chain and the effects of changes in federal dairy programs 
and alternative policy options: 

* Ed Jesse, Ph.D., Professor, Department of Agricultural and Applied 
Economics, University of Wisconsin-Madison;

* Daniel Lass, Ph.D., Professor, College of Natural Resources and the 
Environment, University of Massachusetts, Amherst;

* Richard Sexton, Ph.D., Professor, Department of Agricultural and 
Resource Economics, University of California-Davis; and: 

* Mark Stephenson, Ph.D., Senior Extension Associate, Department of 
Applied Economics and Management, Cornell University.

[End of section]

Appendix II: Analysis of Prices at Four Marketing Levels for 2 Percent 
Milk in Selected Markets: 

This appendix reports on our analysis of prices at four marketing 
levels for a gallon of 2 percent milk in 15 selected markets for 
October 2000 through May 2004. Our analysis includes information on (1) 
the portion of the retail price of a gallon of milk received by 
farmers, cooperatives, wholesale milk processors, and retailers; (2) 
how changes in farm and retail milk prices affect the farm-to-retail 
milk price spread; and (3) how price changes at any level of the 
marketing chain correlate with changes in prices at other levels.

We limited our analysis to gallons of 2 percent milk because sales of 
milk with reduced fat content account for nearly 52 percent of all 
sales of fluid milk and sales of 2 percent milk account for about 62 
percent of these reduced-fat sales. The farm and cooperative prices 
used in our analysis and presented in this appendix have been adjusted 
to reflect 2 percent milkfat. This analysis may not reflect pricing 
patterns and trends for other kinds of milk. We present complete data 
for prices for all four types of milk--whole, 2 percent, 1 percent, and 
skim--in appendix III.

Portion Received by Farmers, Cooperatives, Wholesale Milk Processors 
and Retailers: 

Between October 2000 and May 2004, on average, our data suggest that 
farmers received 45.9 percent, cooperatives 6.1 percent, wholesale 
processors 35.6 percent, and retailers 12.5 percent of the retail price 
of a gallon of 2 percent milk in the 15 markets we reviewed.[Footnote 
31] However, these percentages varied depending on the specific market. 
For example, the farmers' portion ranged from 36.0 percent to 58.6 
percent, while retailers in 12 markets received anywhere from 3.5 
percent to 44.1 percent.[Footnote 32] In comparison, the average 
percentages we reported in 2001 for the period March 1998 through 
September 2000 were 43 percent, 5 percent, 33 percent, and 19 percent, 
respectively, for farmers, cooperatives, wholesale processors, and 
retailers. Table 1 summarizes the price breakdown for each market.

Table 1: Portion of the Retail Price of a Gallon of 2 Percent Milk 
Received by Farmers, Cooperatives, Wholesale Processors, and Retailers 
for 15 Markets, October 2000 through May 2004: 

Selected market: Atlanta, Georgia; 
Percent received by farmers: 42.7%; 
Percent received by cooperatives: 7.4%; 
Percent received by wholesale processors: 34.8%; 
Percent received by retailers: 15.1%; 
Subtotal received by wholesale processors and retailers: 49.9%. 

Selected market: Boston, Massachusetts; 
Percent received by farmers: 51.2%; 
Percent received by cooperatives: 4.5%; 
Percent received by wholesale processors: 24.0%; 
Percent received by retailers: 20.4%; 
Subtotal received by wholesale processors and retailers: 44.4%. 

Selected market: Charlotte, North Carolina; 
Percent received by farmers: 41.1%; 
Percent received by cooperatives: 7.5%; 
Percent received by wholesale processors: 46.6%; 
Percent received by retailers: 4.8%; 
Subtotal received by wholesale processors and retailers: 51.4%. 

Selected market: Cincinnati, Ohio; 
Percent received by farmers: 45.8%; 
Percent received by cooperatives: 7.6%; 
Percent received by wholesale processors: 39.0%; 
Percent received by retailers: 7.7%; 
Subtotal received by wholesale processors and retailers: 46.7%. 

Selected market: Dallas, Texas; 
Percent received by farmers: 55.9%; 
Percent received by cooperatives: 5.3%; 
Percent received by wholesale processors: 49.5%; 
Percent received by retailers: (10.7%)[A]; 
Subtotal received by wholesale processors and retailers: 38.8%. 

Selected market: Denver, Colorado; 
Percent received by farmers: 39.4%; 
Percent received by cooperatives: 4.5%; 
Percent received by wholesale processors: 25.7%; 
Percent received by retailers: 30.3%; 
Subtotal received by wholesale processors and retailers: 56.0%. 

Selected market: Miami, Florida; 
Percent received by farmers: 50.8%; 
Percent received by cooperatives: 9.5%; 
Percent received by wholesale processors: 45.0%; 
Percent received by retailers: (5.3%)[A]; 
Subtotal received by wholesale processors and retailers: 39.7%. 

Selected market: Milwaukee, Wisconsin; 
Percent received by farmers: 52.1%; 
Percent received by cooperatives: 7.9%; 
Percent received by wholesale processors: 36.5%; 
Percent received by retailers: 3.5%; 
Subtotal received by wholesale processors and retailers: 40.0%. 

Selected market: Minneapolis, Minnesota; 
Percent received by farmers: 58.6%; 
Percent received by cooperatives: 7.8%; 
Percent received by wholesale processors: 64.1%; 
Percent received by retailers: (30.5%)[A]; 
Subtotal received by wholesale processors and retailers: 33.6%. 

Selected market: New Orleans, Louisiana; 
Percent received by farmers: 36.8%; 
Percent received by cooperatives: 9.5%; 
Percent received by wholesale processors: 36.6%; 
Percent received by retailers: 17.1%; 
Subtotal received by wholesale processors and retailers: 53.7%. 

Selected market: Phoenix, Arizona; 
Percent received by farmers: 42.5%; 
Percent received by cooperatives: 3.3%; 
Percent received by wholesale processors: 34.8%; 
Percent received by retailers: 19.4%; 
Subtotal received by wholesale processors and retailers: 54.2%. 

Selected market: Salt Lake City, Utah; 
Percent received by farmers: 44.8%; 
Percent received by cooperatives: 3.6%; 
Percent received by wholesale processors: 43.0%; 
Percent received by retailers: 8.6%; 
Subtotal received by wholesale processors and retailers: 51.6%. 

Selected market: San Diego, California[B]; 
Percent received by farmers: 36.0%; 
Percent received by cooperatives: 6.8%; 
Percent received by wholesale processors: 28.1%; 
Percent received by retailers: 29.1%; 
Subtotal received by wholesale processors and retailers: 57.2%. 

Selected market: Seattle, Washington; 
Percent received by farmers: 36.7%; 
Percent received by cooperatives: 3.2%; 
Percent received by wholesale processors: 16.0%; 
Percent received by retailers: 44.1%; 
Subtotal received by wholesale processors and retailers: 60.1%. 

Selected market: Washington, D.C; 
Percent received by farmers: 53.4%; 
Percent received by cooperatives: 3.3%; 
Percent received by wholesale processors: 10.2%; 
Percent received by retailers: 33.1%; 
Subtotal received by wholesale processors and retailers: 43.3%. 

Selected market: Average for the 15 markets; 
Percent received by farmers: 45.9%; 
Percent received by cooperatives: 6.1%; 
Percent received by wholesale processors: 35.6%; 
Percent received by retailers: 12.5%; 
Subtotal received by wholesale processors and retailers: 48.0%. 

Source: GAO's analysis of farm and cooperative price data provided by 
USDA (for the San Diego market, the mailbox and Southern California 
Class I price data were provided by the California Department of Food 
and Agriculture), wholesale price data provided by the Defense 
Commissary Agency, and retail price data provided by Information 
Resources, Inc.

Note: Percentages may not total 100 due to rounding.

[A] Our analysis found that retailers in the Dallas, Miami, and 
Minneapolis markets received a negative return on a gallon of 2 percent 
milk for the 44-month period. Officials with one major retailer in the 
Dallas market indicated that a price war was occurring in Dallas during 
this time period. We were unable to obtain explanations for the 
negative returns in Miami and Minneapolis. These negative returns may 
be the result of problems with comparability between commissary and 
supermarket data.

[B] Figures for the San Diego market may understate the percent 
received by cooperatives and overstate the percent received by 
wholesale processors because the cooperative price data for this market 
did not include estimates of over-order premiums paid to cooperatives. 
On the other hand, figures for this market may overstate the percent 
received by cooperatives and understate the percent received by farmers 
because unlike the farm price data for other markets, the farm price 
data for San Diego represent a weighted average of milk sold for all 
uses. See appendix I.

[End of table]

Changes in Farm and Retail Prices and the Price Spread: 

From October 2000 through May 2004, the spread between farm and retail 
milk prices increased in 12 of the 15 markets.[Footnote 33] However, in 
some of the 12 markets, the spread between farm and retail milk prices 
increased dramatically and then moderated. In 9 of the 15 markets, 
retail prices showed a statistically significant increase. In 4 of the 
remaining markets, retail prices decreased over time; in the other 2 
markets, retail prices showed no statistically significant change. At 
the same time, farm prices decreased in 12 of the 15 markets and 
increased in the remaining 3 markets over the 44-month period. However, 
these declining farm prices began to moderate, or, in most cases, began 
to rise during the latter months of our period of analysis. Table 2 
provides these data for selected markets.[Footnote 34]

Table 2: Changes in the Farm-to-Retail Price Spread for a Gallon of 2 
Percent Milk for 15 Markets, October 2000 through May 2004: 

Selected market: Atlanta, Georgia; 
Change in farm prices: $0.03; 
Change in retail prices: ($0.21); 
Change in the farm-to-retail price spread: ($0.24).

Selected market: Boston, Massachusetts; 
Change in farm prices: ($0.06); 
Change in retail prices: $0.12; 
Change in the farm-to-retail price spread: $0.18.

Selected market: Charlotte, North Carolina; 
Change in farm prices: ($0.05); 
Change in retail prices: $0.20; 
Change in the farm-to-retail price spread: $0.25.

Selected market: Cincinnati, Ohio; 
Change in farm prices: ($0.07); 
Change in retail prices: ($0.12); 
Change in the farm-to-retail price spread: ($0.05).

Selected market: Dallas, Texas; 
Change in farm prices: $0.02; 
Change in retail prices: $0.24; 
Change in the farm-to-retail price spread: $0.22.

Selected market: Denver, Colorado; 
Change in farm prices: ($0.06); 
Change in retail prices: $0.16; 
Change in the farm-to-retail price spread: $0.22.

Selected market: Miami, Florida; 
Change in farm prices: ($0.01); 
Change in retail prices: $0.25; 
Change in the farm-to-retail price spread: $0.26.

Selected market: Milwaukee, Wisconsin; 
Change in farm prices: ($0.03); 
Change in retail prices: $0.05; 
Change in the farm-to-retail price spread: $0.08.

Selected market: Minneapolis, Minnesota; 
Change in farm prices: ($0.02); 
Change in retail prices: [A]; 
Change in the farm-to-retail price spread: $0.02.

Selected market: New Orleans, Louisiana; 
Change in farm prices: ($0.10); 
Change in retail prices: $0.16; 
Change in the farm-to-retail price spread: $0.27.

Selected market: Phoenix, Arizona; 
Change in farm prices: ($0.07); 
Change in retail prices: ($0.01); 
Change in the farm-to-retail price spread: $0.06.

Selected market: Salt Lake City, Utah; 
Change in farm prices: ($0.04); 
Change in retail prices: [A]; 
Change in the farm-to-retail price spread: $0.04.

Selected market: San Diego, California; 
Change in farm prices: $0.03; 
Change in retail prices: ($0.16); 
Change in the farm-to-retail price spread: ($0.19).

Selected market: Seattle, Washington; 
Change in farm prices: ($0.08); 
Change in retail prices: $0.10; 
Change in the farm-to-retail price spread: $0.18.

Selected market: Washington, D.C; 
Change in farm prices: ($0.03); 
Change in retail prices: $0.28; 
Change in the farm-to-retail price spread: $0.32. 

Source: GAO's analysis of farm and cooperative price data provided by 
USDA (for the San Diego market, the mailbox and Southern California 
Class I price data were provided by the California Department of Food 
and Agriculture), wholesale price data provided by the Defense 
Commissary Agency, and retail price data provided by Information 
Resources, Inc.

Note: Differences between changes in farm and retail prices may not add 
to the change in the farm-to-retail price spread due to rounding.

[A] No statistically significant change was observed in the price 
spread over the 44-month period.

[End of table]

Correlation between Price Changes at the Four Marketing Levels: 

We found that price changes generally correlated across levels in the 
marketing chain, with the strongest correlations occurring between 
adjacent levels. The values of correlation coefficients presented are 
estimates of the degree that price changes at one level in the milk 
marketing chain are associated with price changes at other levels. The 
higher the coefficient, the closer the association between changes in 
prices at different levels. Changes in cooperative prices, in general, 
were strongly correlated with changes in wholesale prices.[Footnote 35] 
However, changes in cooperative prices correlated less strongly with 
changes in retail prices. As discussed in appendix V, many factors 
other than farm or wholesale prices influence the retail price of fluid 
milk.

Correlation coefficients between prices at different marketing levels 
varied across markets. For example, correlations between cooperative 
and wholesale prices in individual markets range from a high of 0.982 
to a low of -0.031. We ranked the 15 markets by the extent of 
correlation between cooperative and wholesale prices. The correlation 
coefficient for the market that fell in the middle of this ranking was 
0.788. In comparison, the market in the middle of a similar ranking for 
the time period analyzed in our 2001 report had a lower correlation 
coefficient between these prices, 0.716. Similarly, correlations 
between cooperative and retail prices in individual markets range from 
a high of 0.879 to a low of 0.214. We did a comparable ranking of the 
15 markets by the extent of correlation between cooperative and retail 
prices. The correlation coefficient for the market that fell in the 
middle of this ranking was 0.588. In comparison, the market in the 
middle of a similar ranking for the time period presented in our 2001 
report again had a lower correlation coefficient between these prices, 
0.483. Tables 3 through 5 present data from our correlation analysis of 
price changes across marketing levels.

Table 3: Correlation between Farm Price Changes and Changes in 
Cooperative, Wholesale, and Retail Prices for a Gallon of 2 Percent 
Milk for 15 Markets, October 2000 through May 2004: 

Selected market: Atlanta, Georgia; 
Correlation coefficients for cooperative prices: 0.999*; 
Correlation coefficients for wholesale prices: 0.525*; 
Correlation coefficients for retail prices: 0.537*.

Selected market: Boston, Massachusetts; 
Correlation coefficients for cooperative prices: 1.000*; 
Correlation coefficients for wholesale prices: 0.691*; 
Correlation coefficients for retail prices: 0.780*.

Selected market: Charlotte, North Carolina; 
Correlation coefficients for cooperative prices: 0.995*; 
Correlation coefficients for wholesale prices: 0.693*; 
Correlation coefficients for retail prices: 0.778*.

Selected market: Cincinnati, Ohio; 
Correlation coefficients for cooperative prices: 1.000*; 
Correlation coefficients for wholesale prices: 0.983*; 
Correlation coefficients for retail prices: 0.589*.

Selected market: Dallas, Texas; 
Correlation coefficients for cooperative prices: 0.998*; 
Correlation coefficients for wholesale prices: 0.813*; 
Correlation coefficients for retail prices: 0.713*.

Selected market: Denver, Colorado; 
Correlation coefficients for cooperative prices: 0.999*; 
Correlation coefficients for wholesale prices: 0.932*; 
Correlation coefficients for retail prices: 0.428*.

Selected market: Miami, Florida; 
Correlation coefficients for cooperative prices: 0.999*; 
Correlation coefficients for wholesale prices: (0.024); 
Correlation coefficients for retail prices: 0.826*.

Selected market: Milwaukee, Wisconsin; 
Correlation coefficients for cooperative prices: 0.999*; 
Correlation coefficients for wholesale prices: 0.683*; 
Correlation coefficients for retail prices: 0.881*.

Selected market: Minneapolis, Minnesota; 
Correlation coefficients for cooperative prices: 0.999*; 
Correlation coefficients for wholesale prices: 0.220; 
Correlation coefficients for retail prices: 0.503*.

Selected market: New Orleans, Louisiana; 
Correlation coefficients for cooperative prices: 0.993*; 
Correlation coefficients for wholesale prices: 0.784*; 
Correlation coefficients for retail prices: 0.863*.

Selected market: Phoenix, Arizona; 
Correlation coefficients for cooperative prices: 1.000*; 
Correlation coefficients for wholesale prices: 0.542*; 
Correlation coefficients for retail prices: 0.217.

Selected market: Salt Lake City, Utah; 
Correlation coefficients for cooperative prices: 1.000*; 
Correlation coefficients for wholesale prices: 0.829*; 
Correlation coefficients for retail prices: 0.360*.

Selected market: San Diego, California; 
Correlation coefficients for cooperative prices: 0.407*; 
Correlation coefficients for wholesale prices: 0.432*; 
Correlation coefficients for retail prices: 0.341*.

Selected market: Seattle, Washington; 
Correlation coefficients for cooperative prices: 1.000*; 
Correlation coefficients for wholesale prices: 0.939*; 
Correlation coefficients for retail prices: 0.249.

Selected market: Washington, D.C; 
Correlation coefficients for cooperative prices: 1.000*; 
Correlation coefficients for wholesale prices: 0.962*; 
Correlation coefficients for retail prices: 0.810*.

Source: GAO's analysis of farm and cooperative price data provided by 
USDA (for the San Diego market, the mailbox and Southern California 
Class I price data were provided by the California Department of Food 
and Agriculture), wholesale price data provided by the Defense 
Commissary Agency, and retail price data provided by Information 
Resources, Inc.

Note: In calculating the correlation coefficients for each market, we 
omitted the months for which data were missing.

*Indicates that the correlation coefficient estimated for this time 
period is statistically significant at the 5 percent level (i.e., the 
probability that the two price series are uncorrelated is less than 5 
percent).

[End of table]

Table 4: Correlation between Cooperative Price Changes and Changes in 
Wholesale and Retail Prices for a Gallon of 2 Percent Milk for 15 
Markets, October 2000 through May 2004: 

Selected market: Atlanta, Georgia; 
Correlation coefficients for wholesale prices: 0.546*; 
Correlation coefficients for retail prices: 0.543*.

Selected market: Boston, Massachusetts; 
Correlation coefficients for wholesale prices: 0.694*; 
Correlation coefficients for retail prices: 0.775*.

Selected market: Charlotte, North Carolina; 
Correlation coefficients for wholesale prices: 0.697*; 
Correlation coefficients for retail prices: 0.778*.

Selected market: Cincinnati, Ohio; 
Correlation coefficients for wholesale prices: 0.982*; 
Correlation coefficients for retail prices: 0.588*.

Selected market: Dallas, Texas; 
Correlation coefficients for wholesale prices: 0.818*; 
Correlation coefficients for retail prices: 0.725*.

Selected market: Denver, Colorado; 
Correlation coefficients for wholesale prices: 0.939*; 
Correlation coefficients for retail prices: 0.436*.

Selected market: Miami, Florida; 
Correlation coefficients for wholesale prices: (0.031); 
Correlation coefficients for retail prices: 0.823*.

Selected market: Milwaukee, Wisconsin; 
Correlation coefficients for wholesale prices: 0.682*; 
Correlation coefficients for retail prices: 0.879*.

Selected market: Minneapolis, Minnesota; 
Correlation coefficients for wholesale prices: 0.228; 
Correlation coefficients for retail prices: 0.499*.

Selected market: New Orleans, Louisiana; 
Correlation coefficients for wholesale prices: 0.788*; 
Correlation coefficients for retail prices: 0.861*.

Selected market: Phoenix, Arizona; 
Correlation coefficients for wholesale prices: 0.540*; 
Correlation coefficients for retail prices: 0.214.

Selected market: Salt Lake City, Utah; 
Correlation coefficients for wholesale prices: 0.830*; 
Correlation coefficients for retail prices: 0.360*.

Selected market: San Diego, California; 
Correlation coefficients for wholesale prices: 0.969*; 
Correlation coefficients for retail prices: 0.480*.

Selected market: Seattle, Washington; 
Correlation coefficients for wholesale prices: 0.939*; 
Correlation coefficients for retail prices: 0.250.

Selected market: Washington, D.C; 
Correlation coefficients for wholesale prices: 0.962*; 
Correlation coefficients for retail prices: 0.809*.

Source: GAO's analysis of cooperative price data provided by USDA (for 
the San Diego market, the Southern California Class I price data were 
provided by the California Department of Food and Agriculture), 
wholesale price data provided by the Defense Commissary Agency, and 
retail price data provided by Information Resources, Inc.

Note: In calculating the correlation coefficients for each market, we 
omitted the months for which data were missing.

*Indicates that the correlation coefficient estimated for this time 
period is statistically significant at the 5 percent level (i.e., the 
probability that the two price series are uncorrelated is less than 5 
percent).

[End of table]

Table 5: Correlation between Wholesale and Retail Price Changes for a 
Gallon of 2 Percent Milk for 15 Markets, October 2000 through May 2004: 

Selected market: Atlanta, Georgia; 
Correlation coefficients for retail prices: 0.319*.

Selected market: Boston, Massachusetts; 
Correlation coefficients for retail prices: 0.348*.

Selected market: Charlotte, North Carolina; 
Correlation coefficients for retail prices: 0.746*.

Selected market: Cincinnati, Ohio; 
Correlation coefficients for retail prices: 0.544*.

Selected market: Dallas, Texas; 
Correlation coefficients for retail prices: 0.802*.

Selected market: Denver, Colorado; 
Correlation coefficients for retail prices: 0.429*.

Selected market: Miami, Florida; 
Correlation coefficients for retail prices: (0.003).

Selected market: Milwaukee, Wisconsin; 
Correlation coefficients for retail prices: 0.744*.

Selected market: Minneapolis, Minnesota; 
Correlation coefficients for retail prices: 0.205.

Selected market: New Orleans, Louisiana; 
Correlation coefficients for retail prices: 0.734*.

Selected market: Phoenix, Arizona; 
Correlation coefficients for retail prices: 0.419*.

Selected market: Salt Lake City, Utah; 
Correlation coefficients for retail prices: 0.270.

Selected market: San Diego, California; 
Correlation coefficients for retail prices: 0.497*.

Selected market: Seattle, Washington; 
Correlation coefficients for retail prices: 0.183.

Selected market: Washington, D.C; 
Correlation coefficients for retail prices: 0.778*.

Source: GAO's analysis of wholesale price data provided by the Defense 
Commissary Agency and retail price data provided by Information 
Resources, Inc.

Note: In calculating the correlation coefficients for each market, we 
omitted the months for which data were missing.

*Indicates that the correlation coefficient estimated for this time 
period is statistically significant at the 5 percent level (i.e., the 
probability that the two price series are uncorrelated is less than 5 
percent).

[End of table]

Comparison of Average Annual and Monthly Prices for 2 Percent Milk: 

Tables 6 through 10 show the average annual price for a gallon of 2 
percent milk in the 15 markets for each of the four marketing levels 
during part of 2000, all of 2001, 2002, and 2003, and part of 2004. 
Figures 2 through 16 present average monthly data for the period 
October 2000 through May 2004 on farm, cooperative, wholesale, and 
retail prices for gallons of 2 percent milk in each of the 15 markets. 
Gaps in any of the lines shown in the figures indicate that data were 
unavailable for those months.

Table 6: Average Annual Farm, Cooperative, Wholesale, and Retail Prices 
for a Gallon of 2 Percent Milk in Selected Markets, 2000: 

Selected market: Atlanta, Georgia; 
Farm price: $1.05; 
Cooperative price: $1.25; 
Wholesale price: $2.04; 
Retail price: $2.67.

Selected market: Boston, Massachusetts; 
Farm price: $1.25; 
Cooperative price: $1.35; 
Wholesale price: $1.96; 
Retail price: $2.23.

Selected market: Charlotte, North Carolina; 
Farm price: $1.09; 
Cooperative price: $1.25; 
Wholesale price: $2.06; 
Retail price: $2.58.

Selected market: Cincinnati, Ohio; 
Farm price: $1.03; 
Cooperative price: $1.21; 
Wholesale price: $[A]; 
Retail price: $2.24.

Selected market: Dallas, Texas; 
Farm price: $1.08; 
Cooperative price: $1.20; 
Wholesale price: $2.05; 
Retail price: $1.74.

Selected market: Denver, Colorado; 
Farm price: $0.99; 
Cooperative price: $1.11; 
Wholesale price: $1.73; 
Retail price: $2.45.

Selected market: Miami, Florida; 
Farm price: $1.22; 
Cooperative price: $1.44; 
Wholesale price: $2.50; 
Retail price: $2.33.

Selected market: Milwaukee, Wisconsin; 
Farm price: $1.05; 
Cooperative price: $1.18; 
Wholesale price: $1.79; 
Retail price: $1.94.

Selected market: Minneapolis, Minnesota; 
Farm price: $1.01; 
Cooperative price: $1.12; 
Wholesale price: $2.05; 
Retail price: $1.77.

Selected market: New Orleans, Louisiana; 
Farm price: $1.02; 
Cooperative price: $1.22; 
Wholesale price: $2.25; 
Retail price: $2.61.

Selected market: Phoenix, Arizona; 
Farm price: $1.01; 
Cooperative price: $1.09; 
Wholesale price: $1.83; 
Retail price: $2.09.

Selected market: Salt Lake City, Utah; 
Farm price: $0.98; 
Cooperative price: $1.06; 
Wholesale price: $1.97; 
Retail price: $2.25.

Selected market: San Diego, California; 
Farm price: $0.92; 
Cooperative price: $1.16; 
Wholesale price: $1.90; 
Retail price: $2.54.

Selected market: Seattle, Washington; 
Farm price: $1.02; 
Cooperative price: $1.10; 
Wholesale price: $1.47; 
Retail price: $2.56.

Selected market: Washington, D.C; 
Farm price: $1.21; 
Cooperative price: $1.28; 
Wholesale price: $1.51; 
Retail price: $2.11.

Source: GAO's analysis of farm and cooperative price data provided by 
USDA (for the San Diego market, the mailbox and Southern California 
Class I price data were provided by the California Department of Food 
and Agriculture), wholesale price data provided by the Defense 
Commissary Agency, and retail price data provided by Information 
Resources, Inc.

Note: Averages for 2000 were calculated using data from October through 
December, the portion of 2000 included in our analysis.

[A] We were unable to obtain data from the Defense Commissary Agency to 
represent wholesale prices for 2 percent milk in the Cincinnati market 
during 2000.

[End of table]

Table 7: Average Annual Farm, Cooperative, Wholesale, and Retail Prices 
for a Gallon of 2 Percent Milk in Selected Markets, 2001: 

Selected market: Atlanta, Georgia; 
Farm price: $1.14; 
Cooperative price: $1.34; 
Wholesale price: $2.50; 
Retail price: $2.68.

Selected market: Boston, Massachusetts; 
Farm price: $1.29; 
Cooperative price: $1.39; 
Wholesale price: $1.95; 
Retail price: $2.32.

Selected market: Charlotte, North Carolina; 
Farm price: $1.18; 
Cooperative price: $1.34; 
Wholesale price: $2.32; 
Retail price: $2.62.

Selected market: Cincinnati, Ohio; 
Farm price: $1.15; 
Cooperative price: $1.32; 
Wholesale price: $2.24; 
Retail price: $2.28.

Selected market: Dallas, Texas; 
Farm price: $1.17; 
Cooperative price: $1.28; 
Wholesale price: $2.15; 
Retail price: $1.98.

Selected market: Denver, Colorado; 
Farm price: $1.12; 
Cooperative price: $1.23; 
Wholesale price: $1.93; 
Retail price: $2.54.

Selected market: Miami, Florida; 
Farm price: $1.31; 
Cooperative price: $1.53; 
Wholesale price: $2.56; 
Retail price: $2.40.

Selected market: Milwaukee, Wisconsin; 
Farm price: $1.17; 
Cooperative price: $1.32; 
Wholesale price: $2.17; 
Retail price: $2.07.

Selected market: Minneapolis, Minnesota; 
Farm price: $1.14; 
Cooperative price: $1.27; 
Wholesale price: $2.21; 
Retail price: $1.73.

Selected market: New Orleans, Louisiana; 
Farm price: $1.11; 
Cooperative price: $1.31; 
Wholesale price: $2.32; 
Retail price: $2.68.

Selected market: Phoenix, Arizona; 
Farm price: $1.14; 
Cooperative price: $1.21; 
Wholesale price: $1.91; 
Retail price: $2.42.

Selected market: Salt Lake City, Utah; 
Farm price: $1.10; 
Cooperative price: $1.18; 
Wholesale price: $2.11; 
Retail price: $2.24.

Selected market: San Diego, California; 
Farm price: $1.05; 
Cooperative price: $1.25; 
Wholesale price: $2.04; 
Retail price: $2.84.

Selected market: Seattle, Washington; 
Farm price: $1.11; 
Cooperative price: $1.20; 
Wholesale price: $1.66; 
Retail price: $2.73.

Selected market: Washington, D.C; 
Farm price: $1.34; 
Cooperative price: $1.42; 
Wholesale price: $1.71; 
Retail price: $2.30.

Source: GAO's analysis of farm and cooperative price data provided by 
USDA (for the San Diego market, the mailbox and Southern California 
Class I price data were provided by the California Department of Food 
and Agriculture), wholesale price data provided by the Defense 
Commissary Agency, and retail price data provided by Information 
Resources, Inc.

[End of table]

Table 8: Average Annual Farm, Cooperative, Wholesale, and Retail Prices 
for a Gallon of 2 Percent Milk in Selected Markets, 2002: 

Selected market: Atlanta, Georgia; 
Farm price: $1.04; 
Cooperative price: $1.22; 
Wholesale price: $2.01; 
Retail price: $2.47.

Selected market: Boston, Massachusetts; 
Farm price: $1.11; 
Cooperative price: $1.21; 
Wholesale price: $1.77; 
Retail price: $2.33.

Selected market: Charlotte, North Carolina; 
Farm price: $1.01; 
Cooperative price: $1.22; 
Wholesale price: $2.55; 
Retail price: $2.59.

Selected market: Cincinnati, Ohio; 
Farm price: $0.95; 
Cooperative price: $1.11; 
Wholesale price: $1.98; 
Retail price: $2.34.

Selected market: Dallas, Texas; 
Farm price: $1.08; 
Cooperative price: $1.17; 
Wholesale price: $2.19; 
Retail price: $2.03.

Selected market: Denver, Colorado; 
Farm price: $0.93; 
Cooperative price: $1.05; 
Wholesale price: $1.66; 
Retail price: $2.56.

Selected market: Miami, Florida; 
Farm price: $1.17; 
Cooperative price: $1.41; 
Wholesale price: $2.56; 
Retail price: $2.36.

Selected market: Milwaukee, Wisconsin; 
Farm price: $0.98; 
Cooperative price: $1.14; 
Wholesale price: $1.81; 
Retail price: $2.01.

Selected market: Minneapolis, Minnesota; 
Farm price: $0.95; 
Cooperative price: $1.10; 
Wholesale price: $2.38; 
Retail price: $1.95.

Selected market: New Orleans, Louisiana; 
Farm price: $0.92; 
Cooperative price: $1.19; 
Wholesale price: $2.22; 
Retail price: $2.70.

Selected market: Phoenix, Arizona; 
Farm price: $0.94; 
Cooperative price: $1.02; 
Wholesale price: $1.88; 
Retail price: $2.59.

Selected market: Salt Lake City, Utah; 
Farm price: $0.91; 
Cooperative price: $0.99; 
Wholesale price: $1.92; 
Retail price: $2.29.

Selected market: San Diego, California; 
Farm price: $0.88; 
Cooperative price: $1.06; 
Wholesale price: $1.84; 
Retail price: $2.66.

Selected market: Seattle, Washington; 
Farm price: $0.93; 
Cooperative price: $1.01; 
Wholesale price: $1.39; 
Retail price: $2.74.

Selected market: Washington, D.C; 
Farm price: $1.16; 
Cooperative price: $1.23; 
Wholesale price: $1.44; 
Retail price: $2.28.

Source: GAO's analysis of farm and cooperative price data provided by 
USDA (for the San Diego market, the mailbox and Southern California 
Class I price data were provided by the California Department of Food 
and Agriculture), wholesale price data provided by the Defense 
Commissary Agency, and retail price data provided by Information 
Resources, Inc.

[End of table]

Table 9: Average Annual Farm, Cooperative, Wholesale, and Retail Prices 
for a Gallon of 2 Percent Milk in Selected Markets, 2003: 

Selected market: Atlanta, Georgia; 
Farm price: $1.07; 
Cooperative price: $1.25; 
Wholesale price: $2.02; 
Retail price: $2.49.

Selected market: Boston, Massachusetts; 
Farm price: $1.14; 
Cooperative price: $1.25; 
Wholesale price: $1.79; 
Retail price: $2.33.

Selected market: Charlotte, North Carolina; 
Farm price: $1.05; 
Cooperative price: $1.27; 
Wholesale price: $2.65; 
Retail price: $2.63.

Selected market: Cincinnati, Ohio; 
Farm price: $0.98; 
Cooperative price: $1.16; 
Wholesale price: $2.00; 
Retail price: $2.34.

Selected market: Dallas, Texas; 
Farm price: $1.09; 
Cooperative price: $1.19; 
Wholesale price: $2.26; 
Retail price: $2.02.

Selected market: Denver, Colorado; 
Farm price: $0.97; 
Cooperative price: $1.08; 
Wholesale price: $1.68; 
Retail price: $2.55.

Selected market: Miami, Florida; 
Farm price: $1.20; 
Cooperative price: $1.43; 
Wholesale price: $2.56; 
Retail price: $2.47.

Selected market: Milwaukee, Wisconsin; 
Farm price: $1.01; 
Cooperative price: $1.19; 
Wholesale price: $1.87; 
Retail price: $2.00.

Selected market: Minneapolis, Minnesota; 
Farm price: $0.99; 
Cooperative price: $1.13; 
Wholesale price: $2.36; 
Retail price: $1.62.

Selected market: New Orleans, Louisiana; 
Farm price: $0.94; 
Cooperative price: $1.24; 
Wholesale price: $2.22; 
Retail price: $2.68.

Selected market: Phoenix, Arizona; 
Farm price: $0.97; 
Cooperative price: $1.05; 
Wholesale price: $1.97; 
Retail price: $2.45.

Selected market: Salt Lake City, Utah; 
Farm price: $0.95; 
Cooperative price: $1.03; 
Wholesale price: $1.99; 
Retail price: $2.14.

Selected market: San Diego, California; 
Farm price: $0.93; 
Cooperative price: $1.12; 
Wholesale price: $1.84; 
Retail price: $2.69.

Selected market: Seattle, Washington; 
Farm price: $0.95; 
Cooperative price: $1.04; 
Wholesale price: $1.46; 
Retail price: $2.88.

Selected market: Washington, D.C; 
Farm price: $1.19; 
Cooperative price: $1.27; 
Wholesale price: $1.46; 
Retail price: $2.33.

Source: GAO's analysis of farm and cooperative price data provided by 
USDA (for the San Diego market, the mailbox and Southern California 
Class I price data were provided by the California Department of Food 
and Agriculture), wholesale price data provided by the Defense 
Commissary Agency, and retail price data provided by Information 
Resources, Inc.

[End of table]

Table 10: Average Annual Farm, Cooperative, Wholesale, and Retail 
Prices for a Gallon of 2 Percent Milk in Selected Markets, 2004: 

Selected market: Atlanta, Georgia; 
Farm price: $1.18; 
Cooperative price: $1.35; 
Wholesale price: $2.21; 
Retail price: $2.54.

Selected market: Boston, Massachusetts; 
Farm price: $1.27; 
Cooperative price: $1.38; 
Wholesale price: $1.90; 
Retail price: $2.43.

Selected market: Charlotte, North Carolina; 
Farm price: $1.13; 
Cooperative price: $1.35; 
Wholesale price: $2.84; 
Retail price: $2.87.

Selected market: Cincinnati, Ohio; 
Farm price: $1.09; 
Cooperative price: $1.27; 
Wholesale price: $2.21; 
Retail price: $1.95.

Selected market: Dallas, Texas; 
Farm price: $1.20; 
Cooperative price: $1.30; 
Wholesale price: $2.47; 
Retail price: $2.13.

Selected market: Denver, Colorado; 
Farm price: $1.06; 
Cooperative price: $1.20; 
Wholesale price: $2.04; 
Retail price: $2.72.

Selected market: Miami, Florida; 
Farm price: $1.30; 
Cooperative price: $1.52; 
Wholesale price: $2.56; 
Retail price: $2.63.

Selected market: Milwaukee, Wisconsin; 
Farm price: $1.15; 
Cooperative price: $1.31; 
Wholesale price: $2.13; 
Retail price: $2.13.

Selected market: Minneapolis, Minnesota; 
Farm price: $1.14; 
Cooperative price: $1.29; 
Wholesale price: $2.43; 
Retail price: $1.93.

Selected market: New Orleans, Louisiana; 
Farm price: $1.03; 
Cooperative price: $1.33; 
Wholesale price: $2.15; 
Retail price: $2.87.

Selected market: Phoenix, Arizona; 
Farm price: $1.08; 
Cooperative price: $1.17; 
Wholesale price: $2.17; 
Retail price: $2.25.

Selected market: Salt Lake City, Utah; 
Farm price: $1.07; 
Cooperative price: $1.14; 
Wholesale price: $2.16; 
Retail price: $2.19.

Selected market: San Diego, California; 
Farm price: $1.12; 
Cooperative price: $1.22; 
Wholesale price: $1.92; 
Retail price: $2.50.

Selected market: Seattle, Washington; 
Farm price: $1.06; 
Cooperative price: $1.15; 
Wholesale price: $1.74; 
Retail price: $2.59.

Selected market: Washington, D.C; 
Farm price: $1.31; 
Cooperative price: $1.39; 
Wholesale price: $1.66; 
Retail price: $2.56.

Source: GAO's analysis of farm and cooperative price data provided by 
USDA (for the San Diego market, the mailbox and Southern California 
Class I price data were provided by the California Department of Food 
and Agriculture), wholesale price data provided by the Defense 
Commissary Agency, and retail price data provided by Information 
Resources, Inc.

Note: The 2004 averages were calculated using data from January through 
May of that year, the portion of 2004 included in our analysis.

[End of table]

Figure 2: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for Atlanta, Georgia, October 2000 through May 2004: 

[See PDF for image] 

Note: For Atlanta, Georgia, the farm price is the USDA estimated farm 
Class I price adjusted to 2 percent milkfat content; the cooperative 
price is the announced cooperative Class I price for Atlanta adjusted 
to 2 percent milkfat content; the wholesale price is the average of the 
prices paid by the commissaries at Fort Gillem and Fort McPherson, 
adjusted for a 5 percent markup; and the retail price is the price 
collected by Information Resources, Inc., for the Atlanta market.

[End of figure] 

Figure 3: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for Boston, Massachusetts, October 2000 through May 
2004: 

[See PDF for image] 

Note: For Boston, Massachusetts, the farm price is the USDA estimated 
farm Class I price adjusted to 2 percent milkfat content; the 
cooperative price is the effective cooperative Class I price for Boston 
adjusted to 2 percent milkfat content during the period that the 
Northeast Interstate Dairy Compact was effective (July 1997 through 
September 2001); the cooperative price after September 2001 is the 
announced cooperative Class I price for Boston adjusted to 2 percent 
milkfat content; the wholesale price is the price paid by the 
commissary at Hanscom Air Force Base, adjusted for a 5 percent markup; 
and the retail price is the price collected by Information Resources, 
Inc., for the Boston market.

[End of figure] 

Figure 4: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for Charlotte, North Carolina, October 2000 through 
May 2004: 

[See PDF for image] 

Note: For Charlotte, North Carolina, the farm price is the USDA 
estimated farm Class I price adjusted to 2 percent milkfat content; the 
cooperative price is the announced cooperative Class I price for 
Charlotte adjusted to 2 percent milkfat content; the wholesale price is 
the price paid by the Fort Bragg North Post Store, adjusted for a 5 
percent markup; and the retail price is the price collected by 
Information Resources, Inc., for the Charlotte market.

[End of figure] 

Figure 5: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for Cincinnati, Ohio, October 2000 through May 2004: 

[See PDF for image] 

Note: For Cincinnati, Ohio, the farm price is the USDA estimated farm 
Class I price adjusted to 2 percent milkfat content; the cooperative 
price is the announced cooperative Class I price for Cincinnati 
adjusted to 2 percent milkfat content; the wholesale price is the price 
paid by the commissary at Wright-Patterson Air Force Base, adjusted for 
a 5 percent markup; and the retail price is the price collected by 
Information Resources, Inc., for the Cincinnati market. We were unable 
to obtain data from the Defense Commissary Agency to represent 
wholesale prices for 2 percent milk in the Cincinnati market during 
2000 and for January and February 2001.

[End of figure] 

Figure 6: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for Dallas, Texas, October 2000 through May 2004: 

[See PDF for image] 

Note: For Dallas, Texas, the farm price is the USDA estimated farm 
Class I price adjusted to 2 percent milkfat content; the cooperative 
price is the announced cooperative Class I price for Dallas adjusted to 
2 percent milkfat content; the wholesale price is the average of the 
prices paid by the two commissaries at Fort Hood, adjusted for a 5 
percent markup; and the retail price is the price collected by 
Information Resources, Inc., for the Dallas market.

[End of figure] 

Figure 7: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for Denver, Colorado, October 2000 through May 2004: 

[See PDF for image] 

Note: For Denver, Colorado, the farm price is the USDA estimated farm 
Class I price adjusted to 2 percent milkfat content; the cooperative 
price is the announced cooperative Class I price for Denver adjusted to 
2 percent milkfat content; the wholesale price is the average of the 
prices paid by the commissaries at Fort Carson, Peterson Air Force 
Base, Buckley Air Force Base, and the U.S. Air Force Academy, adjusted 
for a 5 percent markup; and the retail price is the price collected by 
Information Resources, Inc., for the Denver market.

[End of figure] 

Figure 8: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for Miami, Florida, October 2000 through May 2004: 

[See PDF for image] 

Note: For Miami, Florida, the farm price is the USDA estimated farm 
Class I price adjusted to 2 percent milkfat content; the cooperative 
price is the announced cooperative Class I price for Miami adjusted to 
2 percent milkfat content; the wholesale price is the price paid by the 
commissary at the Naval Air Station, Key West, adjusted for a 5 percent 
markup; and the retail price is the price collected by Information 
Resources, Inc., for the Miami market.

[End of figure] 

Figure 9: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for Milwaukee, Wisconsin, October 2000 through May 
2004: 

[See PDF for image] 

Note: For Milwaukee, Wisconsin, the farm price is the USDA estimated 
farm Class I price adjusted to 2 percent milkfat content; the 
cooperative price is the announced cooperative Class I price for 
Milwaukee adjusted to 2 percent milkfat content; the wholesale price is 
the price paid by the commissary at the Naval Station Great Lakes, 
adjusted for a 5 percent markup; and the retail price is the price 
collected by Information Resources, Inc., for the Milwaukee market.

[End of figure] 

Figure 10: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for Minneapolis, Minnesota, October 2000 through May 
2004: 

[See PDF for image] 

Note: For Minneapolis, Minnesota, the farm price is the USDA estimated 
farm Class I price adjusted to 2 percent milkfat content; the 
cooperative price is the announced cooperative Class I price for 
Minneapolis adjusted to 2 percent milkfat content; the wholesale price 
is the price paid by the commissary at Fort McCoy, adjusted for a 5 
percent markup; and the retail price is the price collected by 
Information Resources, Inc., for the Minneapolis market.

[End of figure] 

Figure 11: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for New Orleans, Louisiana, October 2000 through May 
2004: 

[See PDF for image] 

Note: For New Orleans, Louisiana, the farm price is the USDA estimated 
farm Class I price adjusted to 2 percent milkfat content; the 
cooperative price is the announced cooperative Class I price for New 
Orleans adjusted to 2 percent milkfat content; the wholesale price is 
the average of the prices paid by the Naval Support Activities, New 
Orleans; the Naval Construction Battalion Center, Gulfport; and Keesler 
Air Force Base commissaries, adjusted for a 5 percent markup; and the 
retail price is the price collected by Information Resources, Inc., for 
the New Orleans market.

[End of figure] 

Figure 12: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for Phoenix, Arizona, October 2000 through May 2004: 

[See PDF for image] 

Note: For Phoenix, Arizona, the farm price is the USDA estimated farm 
Class I price adjusted to 2 percent milkfat content; the cooperative 
price is the announced cooperative Class I price for Phoenix adjusted 
to 2 percent milkfat content; the wholesale price is the average of the 
prices paid by the commissaries at Luke Air Force Base and Davis- 
Monthan Air Force Base, adjusted for a 5 percent markup; and the retail 
price is the price collected by Information Resources, Inc., for the 
Phoenix market.

[End of figure] 

Figure 13: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for Salt Lake City, Utah, October 2000 through May 
2004: 

[See PDF for image] 

Note: For Salt Lake City, Utah, the farm price is the USDA estimated 
farm Class I price adjusted to 2 percent milkfat content; the 
cooperative price is the announced cooperative Class I price for Salt 
Lake City adjusted to 2 percent milkfat content; the wholesale price is 
the price paid by the commissary at Hill Air Force Base, adjusted for a 
5 percent markup; and the retail price is the price collected by 
Information Resources, Inc., for the Salt Lake City market.

[End of figure] 

Figure 14: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for San Diego, California, October 2000 through May 
2004: 

[See PDF for image] 

Note: For San Diego, California, the farm price is the California 
Department of Food and Agriculture mailbox price adjusted to 2 percent 
milkfat content; the cooperative price is the Southern California Class 
I price adjusted to 2 percent milkfat content; the wholesale price is 
the average of the prices paid by the commissaries at the Naval Base, 
San Diego; Marine Corps Base, Camp Pendleton; Naval Outlying Landing 
Field, Imperial Beach; Marine Corps Air Station, Miramar; Naval Air 
Station, North Island; and by the San Onofre Commissary, Camp 
Pendleton, adjusted for a 5 percent markup; and the retail price is the 
price collected by Information Resources, Inc., for the San Diego 
market.

[End of figure] 

Figure 15: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for Seattle, Washington, October 2000 through May 
2004: 

[See PDF for image] 

Note: For Seattle, Washington, the farm price is the USDA estimated 
farm Class I price adjusted to 2 percent milkfat content; the 
cooperative price is the announced cooperative Class I price for 
Seattle adjusted to 2 percent milkfat content; the wholesale price is 
the average of the prices paid by the commissaries at the Naval Station 
Everett, Smokey Point Support Center; Fort Lewis; and McChord Air Force 
Base, adjusted for a 5 percent markup; and the retail price is the 
price collected by Information Resources, Inc., for the Seattle market.

[End of figure] 

Figure 16: Farm, Cooperative, Wholesale, and Retail Prices for a Gallon 
of 2 Percent Milk for Washington, D.C., October 2000 through May 2004: 

[See PDF for image] 

Note: For Washington, D.C., the farm price is the USDA estimated farm 
Class I price adjusted to 2 percent milkfat content; the cooperative 
price is the announced cooperative Class I price for Washington, D.C., 
adjusted to 2 percent milkfat content; the wholesale price is the 
average of the prices paid by the commissaries at Bolling Air Force 
Base; Walter Reed Army Medical Center; Fort Myer; Fort Belvoir; the 
Marine Corps Base, Quantico; Andrews Air Force Base; Aberdeen Proving 
Ground; the Naval Station, Annapolis; Fort Meade; and Fort Detrick, 
adjusted for a 5 percent markup; and the retail price is the price 
collected by Information Resources, Inc., for the Washington, D.C., 
market.

[End of figure] 

[End of section]

Appendix III: Retail Prices for Four Kinds of Milk in Selected Markets: 

This appendix updates information provided in our June 2001 report on 
the average retail prices for whole, 2 percent, 1 percent, and skim 
milk in 15 selected markets for October 2000 through May 2004. We found 
that retail pricing patterns varied significantly across markets. For 
example, in the Boston market from October 2000 through May 2004, the 
average price for 2 percent milk was generally the same as the average 
price for 1 percent milk; however, whole and skim milk prices were 
generally lower. On the other hand, for this period in the San Diego 
market, the average price of 2 percent milk was generally lower than 
the prices of whole and 1 percent milk, but higher than skim milk 
prices. Figures 17 through 31 provide information on the average retail 
price for the four kinds of milk in the 15 selected markets for October 
2000 through May 2004.

Figure 17: Retail Prices in Atlanta, Georgia, for Whole, 2 Percent, 1 
Percent, and Skim Milk, October 2000 through May 2004: 

[See PDF for image] 

Note: The retail price is the price collected by Information 
Resources, Inc., for the Atlanta market.

[End of figure]

Figure 18: Retail Prices in Boston, Massachusetts, for Whole, 2 
Percent, 1 Percent, and Skim Milk, October 2000 through May 2004: 

[See PDF for image] 

Note: The retail price is the price collected by Information Resources, 
Inc., for the Boston market.

[End of figure] 

Figure 19: Retail Prices in Charlotte, North Carolina, for Whole, 2 
Percent, 1 Percent, and Skim Milk, October 2000 through May 2004: 

[See PDF for image] 

Note: The retail price is the price collected by Information Resources, 
Inc., for the Charlotte market.

[End of figure]

Figure 20: Retail Prices in Cincinnati, Ohio, for Whole, 2 Percent, 1 
Percent, and Skim Milk, October 2000 through May 2004: 

[See PDF for image] 

Note: The retail price is the price collected by Information Resources, 
Inc., for the Cincinnati market.

[End of figure] 

Figure 21: Retail Prices in Dallas, Texas, for Whole, 2 Percent, 1 
Percent, and Skim Milk, October 2000 through May 2004: 

[See PDF for image] 

Note: The retail price is the price collected by Information Resources, 
Inc., for the Dallas market.

[End of figure] 

Figure 22: Retail Prices in Denver, Colorado, for Whole, 2 Percent, 1 
Percent, and Skim Milk, October 2000 through May 2004: 

[See PDF for image] 

Note: The retail price is the price collected by Information Resources, 
Inc., for the Denver market.

[End of figure] 

Figure 23: Retail Prices in Miami, Florida, for Whole, 2 Percent, 1 
Percent, and Skim Milk, October 2000 through May 2004: 

[See PDF for image] 

Note: The retail price is the price collected by Information Resources, 
Inc., for the Miami market.

[End of figure] 

Figure 24: Retail Prices in Milwaukee, Wisconsin, for Whole, 2 Percent, 
1 Percent, and Skim Milk, October 2000 through May 2004: 

[See PDF for image] 

Note: The retail price is the price collected by Information Resources, 
Inc., for the Milwaukee market.

[End of figure] 

Figure 25: Retail Prices in Minneapolis, Minnesota, for Whole, 2 
Percent, 1 Percent, and Skim Milk, October 2000 through May 2004: 

[See PDF for image] 

Note: The retail price is the price collected by Information Resources, 
Inc., for the Minneapolis market.

[End of figure] 

Figure 26: Retail Prices in New Orleans, Louisiana, for Whole, 2 
Percent, 1 Percent, and Skim Milk, October 2000 through May 2004: 

[See PDF for image] 

Note: The retail price is the price collected by Information Resources, 
Inc., for the New Orleans market.

[End of figure] 

Figure 27: Retail Prices in Phoenix, Arizona, for Whole, 2 Percent, 1 
Percent, and Skim Milk, October 2000 through May 2004: 

[See PDF for image] 

Note: The retail price is the price collected by Information Resources, 
Inc., for the Phoenix market.

[End of figure] 

Figure 28: Retail Prices in Salt Lake City, Utah, for Whole, 2 Percent, 
1 Percent, and Skim Milk, October 2000 through May 2004: 

[See PDF for image] 

Note: The retail price is the price collected by Information Resources, 
Inc., for the Salt Lake City market.

[End of figure] 

Figure 29: Retail Prices in San Diego, California, for Whole, 2 
Percent, 1 Percent, and Skim Milk, October 2000 through May 2004: 

[See PDF for image] 

Note: The retail price is the price collected by Information Resources, 
Inc., for the San Diego market.

Figure 30: Retail Prices in Seattle, Washington, for Whole, 2 Percent, 
1 Percent, and Skim Milk, October 2000 through May 2004: 

[See PDF for image] 

Note: The retail price is the price collected by Information Resources, 
Inc., for the Seattle market.

[End of figure]

Figure 31: Retail Prices in Washington, D.C., for Whole, 2 Percent, 1 
Percent, and Skim Milk, October 2000 through May 2004: 

[See PDF for image] 

Note: The retail price is the price collected by Information Resources, 
Inc., for the Washington, D.C., market.

[End of figure] 

[End of section]

Appendix IV: Average Monthly and Annual Farm, Cooperative, Wholesale 
and Retail Milk Prices in Selected Markets: 

This appendix updates information provided in our June 2001 report on 
average monthly and annual farm and cooperative prices of raw milk and 
on the average monthly and annual wholesale and retail prices for a 
gallon of whole, 2 percent, 1 percent, and skim milk. Tables 11 through 
25 provide these data for 15 selected markets over the period October 
2000 through May 2004.

Table 11: Prices for a Gallon of Milk in Atlanta, Georgia, October 2000 
through May 2004: 

Year: 2000; 
Month: October; 
Farm: $1.20; 
Cooperative: $1.41; 
Wholesale: Whole: $2.16; 
Wholesale: 2%: $2.04; 
Wholesale: 1%: $2.01; 
Wholesale: Skim: $1.99; 
Retail: Whole: $2.64; 
Retail: 2%: $2.77; 
Retail: 1%: $2.87; 
Retail: Skim: $2.75.

Year: 2000; 
Month: November; 
Farm: $1.20; 
Cooperative: $1.40; 
Wholesale: Whole: $2.16; 
Wholesale: 2%: $2.04; 
Wholesale: 1%: $2.01; 
Wholesale: Skim: $1.99; 
Retail: Whole: $2.48; 
Retail: 2%: $2.53; 
Retail: 1%: $2.59; 
Retail: Skim: $2.51.

Year: 2000; 
Month: December; 
Farm: $1.21; 
Cooperative: $1.41; 
Wholesale: Whole: $2.16; 
Wholesale: 2%: $2.04; 
Wholesale: 1%: $2.01; 
Wholesale: Skim: $1.99; 
Retail: Whole: $2.63; 
Retail: 2%: $2.71; 
Retail: 1%: $2.76; 
Retail: Skim: $2.69.

Average; 
Farm: $1.20; 
Cooperative: $1.41; 
Wholesale: Whole: $2.16; 
Wholesale: 2%: $2.04; 
Wholesale: 1%: $2.01; 
Wholesale: Skim: $1.99; 
Retail: Whole: $2.58; 
Retail: 2%: $2.67; 
Retail: 1%: $2.74; 
Retail: Skim: $2.65.

Year: 2001; 
Month: January; 
Farm: $1.37; 
Cooperative: $1.57; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.42; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.04; 
Retail: Whole: $2.66; 
Retail: 2%: $2.77; 
Retail: 1%: $2.86; 
Retail: Skim: $2.74.

Year: 2001; 
Month: February; 
Farm: $1.21; 
Cooperative: $1.41; 
Wholesale: Whole: $2.17; 
Wholesale: 2%: $2.45; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.07; 
Retail: Whole: $2.23; 
Retail: 2%: $2.33; 
Retail: 1%: $2.37; 
Retail: Skim: $2.32.

Year: 2001; 
Month: March; 
Farm: $1.25; 
Cooperative: $1.45; 
Wholesale: Whole: $2.17; 
Wholesale: 2%: $2.45; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.07; 
Retail: Whole: $2.65; 
Retail: 2%: $2.73; 
Retail: 1%: $2.81; 
Retail: Skim: $2.71.

Year: 2001; 
Month: April; 
Farm: $1.32; 
Cooperative: $1.52; 
Wholesale: Whole: $2.17; 
Wholesale: 2%: $2.45; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.07; 
Retail: Whole: $2.53; 
Retail: 2%: $2.69; 
Retail: 1%: $2.71; 
Retail: Skim: $2.65.

Year: 2001; 
Month: May; 
Farm: $1.37; 
Cooperative: $1.58; 
Wholesale: Whole: $2.17; 
Wholesale: 2%: $2.45; 
Wholesale: 1%: $2.05; 
Wholesale: Skim: $2.07; 
Retail: Whole: $2.58; 
Retail: 2%: $2.75; 
Retail: 1%: $2.76; 
Retail: Skim: $2.69.

Year: 2001; 
Month: June; 
Farm: $1.41; 
Cooperative: $1.61; 
Wholesale: Whole: $2.20; 
Wholesale: 2%: $2.47; 
Wholesale: 1%: $2.05; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.50; 
Retail: 2%: $2.62; 
Retail: 1%: $2.64; 
Retail: Skim: $2.57.

Year: 2001; 
Month: July; 
Farm: $1.45; 
Cooperative: $1.66; 
Wholesale: Whole: $2.22; 
Wholesale: 2%: $2.52; 
Wholesale: 1%: $2.05; 
Wholesale: Skim: $2.13; 
Retail: Whole: $2.55; 
Retail: 2%: $2.67; 
Retail: 1%: $2.71; 
Retail: Skim: $2.64.

Year: 2001; 
Month: August; 
Farm: $1.46; 
Cooperative: $1.66; 
Wholesale: Whole: $2.22; 
Wholesale: 2%: $2.54; 
Wholesale: 1%: $2.05; 
Wholesale: Skim: $2.13; 
Retail: Whole: $2.55; 
Retail: 2%: $2.68; 
Retail: 1%: $2.68; 
Retail: Skim: $2.63.

Year: 2001; 
Month: September; 
Farm: $1.47; 
Cooperative: $1.68; 
Wholesale: Whole: $2.22; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $2.05; 
Wholesale: Skim: $2.13; 
Retail: Whole: $2.54; 
Retail: 2%: $2.70; 
Retail: 1%: $2.70; 
Retail: Skim: $2.65.

Year: 2001; 
Month: October; 
Farm: $1.50; 
Cooperative: $1.71; 
Wholesale: Whole: $2.22; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $2.05; 
Wholesale: Skim: $2.13; 
Retail: Whole: $2.64; 
Retail: 2%: $2.77; 
Retail: 1%: $2.81; 
Retail: Skim: $2.71.

Year: 2001; 
Month: November; 
Farm: $1.49; 
Cooperative: $1.69; 
Wholesale: Whole: $2.22; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $2.08; 
Wholesale: Skim: $2.13; 
Retail: Whole: $2.60; 
Retail: 2%: $2.73; 
Retail: 1%: $2.74; 
Retail: Skim: $2.68.

Year: 2001; 
Month: December; 
Farm: $1.20; 
Cooperative: $1.41; 
Wholesale: Whole: $2.22; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $2.08; 
Wholesale: Skim: $2.13; 
Retail: Whole: $2.57; 
Retail: 2%: $2.68; 
Retail: 1%: $2.72; 
Retail: Skim: $2.66.

Average; 
Farm: $1.38; 
Cooperative: $1.58; 
Wholesale: Whole: $2.20; 
Wholesale: 2%: $2.50; 
Wholesale: 1%: $2.06; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.55; 
Retail: 2%: $2.68; 
Retail: 1%: $2.71; 
Retail: Skim: $2.64.

Year: 2002; 
Month: January; 
Farm: $1.22; 
Cooperative: $1.40; 
Wholesale: Whole: $2.22; 
Wholesale: 2%: $2.25; 
Wholesale: 1%: $2.08; 
Wholesale: Skim: $2.13; 
Retail: Whole: $2.54; 
Retail: 2%: $2.64; 
Retail: 1%: $2.68; 
Retail: Skim: $2.62.

Year: 2002; 
Month: February; 
Farm: $1.22; 
Cooperative: $1.40; 
Wholesale: Whole: $2.22; 
Wholesale: 2%: $2.18; 
Wholesale: 1%: $2.08; 
Wholesale: Skim: $2.13; 
Retail: Whole: $2.48; 
Retail: 2%: $2.62; 
Retail: 1%: $2.63; 
Retail: Skim: $2.60.

Year: 2002; 
Month: March; 
Farm: $1.22; 
Cooperative: $1.40; 
Wholesale: Whole: $2.13; 
Wholesale: 2%: $2.06; 
Wholesale: 1%: $1.99; 
Wholesale: Skim: $1.99; 
Retail: Whole: $2.51; 
Retail: 2%: $2.67; 
Retail: 1%: $2.72; 
Retail: Skim: $2.64.

Year: 2002; 
Month: April; 
Farm: $1.22; 
Cooperative: $1.40; 
Wholesale: Whole: $2.04; 
Wholesale: 2%: $1.95; 
Wholesale: 1%: $1.89; 
Wholesale: Skim: $1.84; 
Retail: Whole: $2.38; 
Retail: 2%: $2.55; 
Retail: 1%: $2.55; 
Retail: Skim: $2.51.

Year: 2002; 
Month: May; 
Farm: $1.22; 
Cooperative: $1.40; 
Wholesale: Whole: $2.04; 
Wholesale: 2%: $1.95; 
Wholesale: 1%: $1.89; 
Wholesale: Skim: $1.84; 
Retail: Whole: $2.32; 
Retail: 2%: $2.51; 
Retail: 1%: $2.54; 
Retail: Skim: $2.49.

Year: 2002; 
Month: June; 
Farm: $1.20; 
Cooperative: $1.38; 
Wholesale: Whole: $2.04; 
Wholesale: 2%: $1.95; 
Wholesale: 1%: $1.89; 
Wholesale: Skim: $1.84; 
Retail: Whole: $2.30; 
Retail: 2%: $2.43; 
Retail: 1%: $2.46; 
Retail: Skim: $2.42.

Year: 2002; 
Month: July; 
Farm: $1.17; 
Cooperative: $1.35; 
Wholesale: Whole: $2.04; 
Wholesale: 2%: $1.95; 
Wholesale: 1%: $1.89; 
Wholesale: Skim: $1.84; 
Retail: Whole: $2.12; 
Retail: 2%: $2.26; 
Retail: 1%: $2.22; 
Retail: Skim: $2.23.

Year: 2002; 
Month: August; 
Farm: $1.16; 
Cooperative: $1.34; 
Wholesale: Whole: $2.04; 
Wholesale: 2%: $1.95; 
Wholesale: 1%: $1.89; 
Wholesale: Skim: $1.84; 
Retail: Whole: $2.29; 
Retail: 2%: $2.51; 
Retail: 1%: $2.50; 
Retail: Skim: $2.47.

Year: 2002; 
Month: September; 
Farm: $1.15; 
Cooperative: $1.34; 
Wholesale: Whole: $2.04; 
Wholesale: 2%: $1.95; 
Wholesale: 1%: $1.89; 
Wholesale: Skim: $1.84; 
Retail: Whole: $2.21; 
Retail: 2%: $2.40; 
Retail: 1%: $2.35; 
Retail: Skim: $2.37.

Year: 2002; 
Month: October; 
Farm: $1.15; 
Cooperative: $1.32; 
Wholesale: Whole: $2.04; 
Wholesale: 2%: $1.95; 
Wholesale: 1%: $1.89; 
Wholesale: Skim: $1.84; 
Retail: Whole: $2.08; 
Retail: 2%: $2.25; 
Retail: 1%: $2.21; 
Retail: Skim: $2.22.

Year: 2002; 
Month: November; 
Farm: $1.17; 
Cooperative: $1.35; 
Wholesale: Whole: $2.06; 
Wholesale: 2%: $1.97; 
Wholesale: 1%: $1.92; 
Wholesale: Skim: $1.86; 
Retail: Whole: $2.13; 
Retail: 2%: $2.30; 
Retail: 1%: $2.27; 
Retail: Skim: $2.26.

Year: 2002; 
Month: December; 
Farm: $1.16; 
Cooperative: $1.34; 
Wholesale: Whole: $2.08; 
Wholesale: 2%: $1.99; 
Wholesale: 1%: $1.94; 
Wholesale: Skim: $1.88; 
Retail: Whole: $2.32; 
Retail: 2%: $2.49; 
Retail: 1%: $2.51; 
Retail: Skim: $2.48.

Average; 
Farm: $1.19; 
Cooperative: $1.37; 
Wholesale: Whole: $2.08; 
Wholesale: 2%: $2.01; 
Wholesale: 1%: $1.94; 
Wholesale: Skim: $1.91; 
Retail: Whole: $2.31; 
Retail: 2%: $2.47; 
Retail: 1%: $2.47; 
Retail: Skim: $2.44.

Year: 2003; 
Month: January; 
Farm: $1.16; 
Cooperative: $1.34; 
Wholesale: Whole: $2.08; 
Wholesale: 2%: $1.99; 
Wholesale: 1%: $1.94; 
Wholesale: Skim: $1.88; 
Retail: Whole: $2.21; 
Retail: 2%: $2.38; 
Retail: 1%: $2.38; 
Retail: Skim: $2.35.

Year: 2003; 
Month: February; 
Farm: $1.16; 
Cooperative: $1.34; 
Wholesale: Whole: $2.08; 
Wholesale: 2%: $1.99; 
Wholesale: 1%: $1.94; 
Wholesale: Skim: $1.88; 
Retail: Whole: $2.31; 
Retail: 2%: $2.47; 
Retail: 1%: $2.50; 
Retail: Skim: $2.45.

Year: 2003; 
Month: March; 
Farm: $1.13; 
Cooperative: $1.31; 
Wholesale: Whole: $2.08; 
Wholesale: 2%: $1.99; 
Wholesale: 1%: $1.94; 
Wholesale: Skim: $1.88; 
Retail: Whole: $2.28; 
Retail: 2%: $2.47; 
Retail: 1%: $2.45; 
Retail: Skim: $2.43.

Year: 2003; 
Month: April; 
Farm: $1.11; 
Cooperative: $1.29; 
Wholesale: Whole: $2.08; 
Wholesale: 2%: $1.99; 
Wholesale: 1%: $1.94; 
Wholesale: Skim: $1.88; 
Retail: Whole: $2.23; 
Retail: 2%: $2.41; 
Retail: 1%: $2.43; 
Retail: Skim: $2.38.

Year: 2003; 
Month: May; 
Farm: $1.12; 
Cooperative: $1.30; 
Wholesale: Whole: $2.08; 
Wholesale: 2%: $1.99; 
Wholesale: 1%: $1.94; 
Wholesale: Skim: $1.88; 
Retail: Whole: $2.23; 
Retail: 2%: $2.40; 
Retail: 1%: $2.38; 
Retail: Skim: $2.37.

Year: 2003; 
Month: June; 
Farm: $1.12; 
Cooperative: $1.30; 
Wholesale: Whole: $2.08; 
Wholesale: 2%: $1.99; 
Wholesale: 1%: $1.94; 
Wholesale: Skim: $1.88; 
Retail: Whole: $2.28; 
Retail: 2%: $2.47; 
Retail: 1%: $2.47; 
Retail: Skim: $2.44.

Year: 2003; 
Month: July; 
Farm: $1.12; 
Cooperative: $1.30; 
Wholesale: Whole: $2.08; 
Wholesale: 2%: $1.99; 
Wholesale: 1%: $1.94; 
Wholesale: Skim: $1.88; 
Retail: Whole: $2.23; 
Retail: 2%: $2.45; 
Retail: 1%: $2.44; 
Retail: Skim: $2.40.

Year: 2003; 
Month: August; 
Farm: $1.19; 
Cooperative: $1.38; 
Wholesale: Whole: $2.08; 
Wholesale: 2%: $1.99; 
Wholesale: 1%: $1.94; 
Wholesale: Skim: $1.88; 
Retail: Whole: $2.28; 
Retail: 2%: $2.44; 
Retail: 1%: $2.42; 
Retail: Skim: $2.40.

Year: 2003; 
Month: September; 
Farm: $1.39; 
Cooperative: $1.57; 
Wholesale: Whole: $2.08; 
Wholesale: 2%: $1.99; 
Wholesale: 1%: $1.94; 
Wholesale: Skim: $1.88; 
Retail: Whole: $2.44; 
Retail: 2%: $2.67; 
Retail: 1%: $2.68; 
Retail: Skim: $2.62.

Year: 2003; 
Month: October; 
Farm: $1.41; 
Cooperative: $1.60; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.11; 
Wholesale: 1%: $2.06; 
Wholesale: Skim: $2.02; 
Retail: Whole: $2.44; 
Retail: 2%: $2.62; 
Retail: 1%: $2.66; 
Retail: Skim: $2.60.

Year: 2003; 
Month: November; 
Farm: $1.41; 
Cooperative: $1.60; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.12; 
Wholesale: 1%: $2.07; 
Wholesale: Skim: $2.02; 
Retail: Whole: $2.46; 
Retail: 2%: $2.66; 
Retail: 1%: $2.67; 
Retail: Skim: $2.62.

Year: 2003; 
Month: December; 
Farm: $1.40; 
Cooperative: $1.58; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.12; 
Wholesale: 1%: $2.07; 
Wholesale: Skim: $2.02; 
Retail: Whole: $2.27; 
Retail: 2%: $2.49; 
Retail: 1%: $2.51; 
Retail: Skim: $2.46.

Average; 
Farm: $1.23; 
Cooperative: $1.41; 
Wholesale: Whole: $2.11; 
Wholesale: 2%: $2.02; 
Wholesale: 1%: $1.97; 
Wholesale: Skim: $1.92; 
Retail: Whole: $2.31; 
Retail: 2%: $2.49; 
Retail: 1%: $2.50; 
Retail: Skim: $2.46.

Year: 2004; 
Month: January; 
Farm: $1.25; 
Cooperative: $1.43; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.12; 
Wholesale: 1%: $2.07; 
Wholesale: Skim: $2.02; 
Retail: Whole: $2.24; 
Retail: 2%: $2.42; 
Retail: 1%: $2.38; 
Retail: Skim: $2.36.

Year: 2004; 
Month: February; 
Farm: $1.25; 
Cooperative: $1.43; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.12; 
Wholesale: 1%: $2.07; 
Wholesale: Skim: $2.02; 
Retail: Whole: $2.25; 
Retail: 2%: $2.39; 
Retail: 1%: $2.37; 
Retail: Skim: $2.34.

Year: 2004; 
Month: March; 
Farm: $1.26; 
Cooperative: $1.43; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.12; 
Wholesale: 1%: $2.07; 
Wholesale: Skim: $2.02; 
Retail: Whole: $2.28; 
Retail: 2%: $2.45; 
Retail: 1%: $2.43; 
Retail: Skim: $2.40.

Year: 2004; 
Month: April; 
Farm: $1.40; 
Cooperative: $1.57; 
Wholesale: Whole: $2.22; 
Wholesale: 2%: $2.12; 
Wholesale: 1%: $2.07; 
Wholesale: Skim: $2.03; 
Retail: Whole: $2.29; 
Retail: 2%: $2.49; 
Retail: 1%: $2.38; 
Retail: Skim: $2.35.

Year: 2004; 
Month: May; 
Farm: $1.87; 
Cooperative: $2.05; 
Wholesale: Whole: $2.64; 
Wholesale: 2%: $2.55; 
Wholesale: 1%: $2.50; 
Wholesale: Skim: $2.45; 
Retail: Whole: $2.69; 
Retail: 2%: $2.93; 
Retail: 1%: $2.85; 
Retail: Skim: $2.78.

Average; 
Farm: $1.41; 
Cooperative: $1.58; 
Wholesale: Whole: $2.30; 
Wholesale: 2%: $2.21; 
Wholesale: 1%: $2.16; 
Wholesale: Skim: $2.11; 
Retail: Whole: $2.35; 
Retail: 2%: $2.54; 
Retail: 1%: $2.48; 
Wholesale: Skim: $2.45.

Source: GAO's analysis of price data provided by USDA, the Defense 
Commissary Agency, and Information Resources, Inc.

Note: For the Atlanta market, the farm price is the USDA-estimated farm 
Class I price for 3.5 percent milkfat content; the cooperative price is 
the announced cooperative Class I price for Atlanta for 3.5 percent 
milkfat content; the wholesale price is the average of the prices paid 
by the commissaries at Fort Gillem and Fort McPherson, adjusted for a 5 
percent markup; and the retail price is the price collected by 
Information Resources, Inc., for the Atlanta market. Prices may not 
average due to rounding. "N/A" indicates data not available.

[End of table]

Table 12: Prices for a Gallon of Milk in Boston, Massachusetts, October 
2000 through May 2004: 

Year: 2000; 
Month: October; 
Farm: $1.41; 
Cooperative: $1.50; 
Wholesale: Whole: $2.00; 
Wholesale: 2%: $1.96; 
Wholesale: 1%: $1.91; 
Wholesale: Skim: $1.90; 
Retail: Whole: $2.19; 
Retail: 2%: $2.21; 
Retail: 1%: $2.23; 
Retail: Skim: $2.02.

Year: 2000; 
Month: November; 
Farm: $1.41; 
Cooperative: $1.50; 
Wholesale: Whole: $2.00; 
Wholesale: 2%: $1.96; 
Wholesale: 1%: $1.91; 
Wholesale: Skim: $1.90; 
Retail: Whole: $2.20; 
Retail: 2%: $2.22; 
Retail: 1%: $2.24; 
Retail: Skim: $2.03.

Year: 2000; 
Month: December; 
Farm: $1.41; 
Cooperative: $1.50; 
Wholesale: Whole: $2.00; 
Wholesale: 2%: $1.96; 
Wholesale: 1%: $1.91; 
Wholesale: Skim: $1.90; 
Retail: Whole: $2.23; 
Retail: 2%: $2.26; 
Retail: 1%: $2.27; 
Retail: Skim: $2.05.

Average; 
Farm: $1.41; 
Cooperative: $1.50; 
Wholesale: Whole: $2.00; 
Wholesale: 2%: $1.96; 
Wholesale: 1%: $1.91; 
Wholesale: Skim: $1.90; 
Retail: Whole: $2.21; 
Retail: 2%: $2.23; 
Retail: 1%: $2.25; 
Retail: Skim: $2.03.

Year: 2001; 
Month: January; 
Farm: $1.43; 
Cooperative: $1.53; 
Wholesale: Whole: $2.00; 
Wholesale: 2%: $1.96; 
Wholesale: 1%: $1.91; 
Wholesale: Skim: $1.90; 
Retail: Whole: $2.23; 
Retail: 2%: $2.25; 
Retail: 1%: $2.25; 
Retail: Skim: $2.05.

Year: 2001; 
Month: February; 
Farm: $1.41; 
Cooperative: $1.50; 
Wholesale: Whole: $2.00; 
Wholesale: 2%: $1.96; 
Wholesale: 1%: $1.91; 
Wholesale: Skim: $1.90; 
Retail: Whole: $2.25; 
Retail: 2%: $2.29; 
Retail: 1%: $2.29; 
Retail: Skim: $2.08.

Year: 2001; 
Month: March; 
Farm: $1.41; 
Cooperative: $1.50; 
Wholesale: Whole: $2.00; 
Wholesale: 2%: $1.96; 
Wholesale: 1%: $1.91; 
Wholesale: Skim: $1.90; 
Retail: Whole: $2.26; 
Retail: 2%: $2.31; 
Retail: 1%: $2.32; 
Retail: Skim: $2.12.

Year: 2001; 
Month: April; 
Farm: $1.41; 
Cooperative: $1.50; 
Wholesale: Whole: $2.00; 
Wholesale: 2%: $1.96; 
Wholesale: 1%: $1.91; 
Wholesale: Skim: $1.90; 
Retail: Whole: $2.26; 
Retail: 2%: $2.30; 
Retail: 1%: $2.31; 
Retail: Skim: $2.12.

Year: 2001; 
Month: May; 
Farm: $1.45; 
Cooperative: $1.55; 
Wholesale: Whole: $2.00; 
Wholesale: 2%: $1.96; 
Wholesale: 1%: $1.91; 
Wholesale: Skim: $1.90; 
Retail: Whole: $2.26; 
Retail: 2%: $2.31; 
Retail: 1%: $2.32; 
Retail: Skim: $2.13.

Year: 2001; 
Month: June; 
Farm: $1.55; 
Cooperative: $1.65; 
Wholesale: Whole: $2.00; 
Wholesale: 2%: $1.96; 
Wholesale: 1%: $1.91; 
Wholesale: Skim: $1.90; 
Retail: Whole: $2.26; 
Retail: 2%: $2.31; 
Retail: 1%: $2.32; 
Retail: Skim: $2.14.

Year: 2001; 
Month: July; 
Farm: $1.59; 
Cooperative: $1.68; 
Wholesale: Whole: $2.00; 
Wholesale: 2%: $1.96; 
Wholesale: 1%: $1.91; 
Wholesale: Skim: $1.90; 
Retail: Whole: $2.27; 
Retail: 2%: $2.32; 
Retail: 1%: $2.33; 
Retail: Skim: $2.14.

Year: 2001; 
Month: August; 
Farm: $1.65; 
Cooperative: $1.75; 
Wholesale: Whole: $2.00; 
Wholesale: 2%: $1.96; 
Wholesale: 1%: $1.91; 
Wholesale: Skim: $1.90; 
Retail: Whole: $2.27; 
Retail: 2%: $2.32; 
Retail: 1%: $2.33; 
Retail: Skim: $2.15.

Year: 2001; 
Month: September; 
Farm: $1.66; 
Cooperative: $1.76; 
Wholesale: Whole: $2.00; 
Wholesale: 2%: $1.96; 
Wholesale: 1%: $1.91; 
Wholesale: Skim: $1.90; 
Retail: Whole: $2.28; 
Retail: 2%: $2.34; 
Retail: 1%: $2.36; 
Retail: Skim: $2.18.

Year: 2001; 
Month: October; 
Farm: $1.69; 
Cooperative: $1.79; 
Wholesale: Whole: $2.00; 
Wholesale: 2%: $1.96; 
Wholesale: 1%: $1.91; 
Wholesale: Skim: $1.90; 
Retail: Whole: $2.30; 
Retail: 2%: $2.35; 
Retail: 1%: $2.37; 
Retail: Skim: $2.19.

Year: 2001; 
Month: November; 
Farm: $1.68; 
Cooperative: $1.78; 
Wholesale: Whole: $2.00; 
Wholesale: 2%: $1.96; 
Wholesale: 1%: $1.93; 
Wholesale: Skim: $1.90; 
Retail: Whole: $2.32; 
Retail: 2%: $2.38; 
Retail: 1%: $2.40; 
Retail: Skim: $2.21.

Year: 2001; 
Month: December; 
Farm: $1.36; 
Cooperative: $1.45; 
Wholesale: Whole: $2.07; 
Wholesale: 2%: $1.85; 
Wholesale: 1%: $1.71; 
Wholesale: Skim: $1.71; 
Retail: Whole: $2.27; 
Retail: 2%: $2.36; 
Retail: 1%: $2.38; 
Retail: Skim: $2.20.

Average; 
Farm: $1.52; 
Cooperative: $1.62; 
Wholesale: Whole: $2.01; 
Wholesale: 2%: $1.95; 
Wholesale: 1%: $1.90; 
Wholesale: Skim: $1.88; 
Retail: Whole: $2.27; 
Retail: 2%: $2.32; 
Retail: 1%: $2.33; 
Retail: Skim: $2.14.

Year: 2002; 
Month: January; 
Farm: $1.35; 
Cooperative: $1.45; 
Wholesale: Whole: $2.07; 
Wholesale: 2%: $1.85; 
Wholesale: 1%: $1.71; 
Wholesale: Skim: $1.71; 
Retail: Whole: $2.27; 
Retail: 2%: $2.33; 
Retail: 1%: $2.35; 
Retail: Skim: $2.17.

Year: 2002; 
Month: February; 
Farm: $1.35; 
Cooperative: $1.45; 
Wholesale: Whole: $2.07; 
Wholesale: 2%: $1.85; 
Wholesale: 1%: $1.71; 
Wholesale: Skim: $1.71; 
Retail: Whole: $2.28; 
Retail: 2%: $2.36; 
Retail: 1%: $2.38; 
Retail: Skim: $2.20.

Year: 2002; 
Month: March; 
Farm: $1.32; 
Cooperative: $1.42; 
Wholesale: Whole: $2.04; 
Wholesale: 2%: $1.82; 
Wholesale: 1%: $1.68; 
Wholesale: Skim: $1.68; 
Retail: Whole: $2.28; 
Retail: 2%: $2.37; 
Retail: 1%: $2.38; 
Retail: Skim: $2.21.

Year: 2002; 
Month: April; 
Farm: $1.30; 
Cooperative: $1.41; 
Wholesale: Whole: $2.03; 
Wholesale: 2%: $1.81; 
Wholesale: 1%: $1.67; 
Wholesale: Skim: $1.67; 
Retail: Whole: $2.27; 
Retail: 2%: $2.34; 
Retail: 1%: $2.35; 
Retail: Skim: $2.18.

Year: 2002; 
Month: May; 
Farm: $1.29; 
Cooperative: $1.39; 
Wholesale: Whole: $2.01; 
Wholesale: 2%: $1.81; 
Wholesale: 1%: $1.67; 
Wholesale: Skim: $1.67; 
Retail: Whole: $2.27; 
Retail: 2%: $2.34; 
Retail: 1%: $2.36; 
Retail: Skim: $2.19.

Year: 2002; 
Month: June; 
Farm: $1.27; 
Cooperative: $1.37; 
Wholesale: Whole: $2.00; 
Wholesale: 2%: $1.78; 
Wholesale: 1%: $1.63; 
Wholesale: Skim: $1.63; 
Retail: Whole: $2.26; 
Retail: 2%: $2.32; 
Retail: 1%: $2.34; 
Retail: Skim: $2.17.

Year: 2002; 
Month: July; 
Farm: $1.23; 
Cooperative: $1.33; 
Wholesale: Whole: $1.96; 
Wholesale: 2%: $1.74; 
Wholesale: 1%: $1.60; 
Wholesale: Skim: $1.60; 
Retail: Whole: $2.26; 
Retail: 2%: $2.31; 
Retail: 1%: $2.33; 
Retail: Skim: $2.16.

Year: 2002; 
Month: August; 
Farm: $1.20; 
Cooperative: $1.30; 
Wholesale: Whole: $1.95; 
Wholesale: 2%: $1.73; 
Wholesale: 1%: $1.59; 
Wholesale: Skim: $1.59; 
Retail: Whole: $2.24; 
Retail: 2%: $2.28; 
Retail: 1%: $2.31; 
Retail: Skim: $2.14.

Year: 2002; 
Month: September; 
Farm: $1.20; 
Cooperative: $1.30; 
Wholesale: Whole: $1.95; 
Wholesale: 2%: $1.73; 
Wholesale: 1%: $1.59; 
Wholesale: Skim: $1.59; 
Retail: Whole: $2.26; 
Retail: 2%: $2.32; 
Retail: 1%: $2.33; 
Retail: Skim: $2.17.

Year: 2002; 
Month: October; 
Farm: $1.17; 
Cooperative: $1.28; 
Wholesale: Whole: $1.92; 
Wholesale: 2%: $1.70; 
Wholesale: 1%: $1.56; 
Wholesale: Skim: $1.56; 
Retail: Whole: $2.25; 
Retail: 2%: $2.32; 
Retail: 1%: $2.33; 
Retail: Skim: $2.18.

Year: 2002; 
Month: November; 
Farm: $1.21; 
Cooperative: $1.31; 
Wholesale: Whole: $1.96; 
Wholesale: 2%: $1.74; 
Wholesale: 1%: $1.60; 
Wholesale: Skim: $1.60; 
Retail: Whole: $2.26; 
Retail: 2%: $2.32; 
Retail: 1%: $2.33; 
Retail: Skim: $2.18.

Year: 2002; 
Month: December; 
Farm: $1.20; 
Cooperative: $1.31; 
Wholesale: Whole: $1.95; 
Wholesale: 2%: $1.73; 
Wholesale: 1%: $1.59; 
Wholesale: Skim: $1.59; 
Retail: Whole: $2.24; 
Retail: 2%: $2.30; 
Retail: 1%: $2.29; 
Retail: Skim: $2.15.

Average; 
Farm: $1.26; 
Cooperative: $1.36; 
Wholesale: Whole: $1.99; 
Wholesale: 2%: $1.77; 
Wholesale: 1%: $1.63; 
Wholesale: Skim: $1.63; 
Retail: Whole: $2.26; 
Retail: 2%: $2.33; 
Retail: 1%: $2.34; 
Retail: Skim: $2.18.

Year: 2003; 
Month: January; 
Farm: $1.20; 
Cooperative: $1.31; 
Wholesale: Whole: $1.95; 
Wholesale: 2%: $1.73; 
Wholesale: 1%: $1.59; 
Wholesale: Skim: $1.59; 
Retail: Whole: $2.27; 
Retail: 2%: $2.33; 
Retail: 1%: $2.31; 
Retail: Skim: $2.16.

Year: 2003; 
Month: February; 
Farm: $1.17; 
Cooperative: $1.28; 
Wholesale: Whole: $1.90; 
Wholesale: 2%: $1.70; 
Wholesale: 1%: $1.56; 
Wholesale: Skim: $1.55; 
Retail: Whole: $2.28; 
Retail: 2%: $2.33; 
Retail: 1%: $2.33; 
Retail: Skim: $2.19.

Year: 2003; 
Month: March; 
Farm: $1.14; 
Cooperative: $1.25; 
Wholesale: Whole: $1.87; 
Wholesale: 2%: $1.66; 
Wholesale: 1%: $1.52; 
Wholesale: Skim: $1.52; 
Retail: Whole: $2.27; 
Retail: 2%: $2.33; 
Retail: 1%: $2.33; 
Retail: Skim: $2.17.

Year: 2003; 
Month: April; 
Farm: $1.12; 
Cooperative: $1.23; 
Wholesale: Whole: $1.86; 
Wholesale: 2%: $1.65; 
Wholesale: 1%: $1.51; 
Wholesale: Skim: $1.51; 
Retail: Whole: $2.25; 
Retail: 2%: $2.29; 
Retail: 1%: $2.28; 
Retail: Skim: $2.15.

Year: 2003; 
Month: May; 
Farm: $1.13; 
Cooperative: $1.24; 
Wholesale: Whole: $1.87; 
Wholesale: 2%: $1.66; 
Wholesale: 1%: $1.52; 
Wholesale: Skim: $1.52; 
Retail: Whole: $2.26; 
Retail: 2%: $2.31; 
Retail: 1%: $2.31; 
Retail: Skim: $2.16.

Year: 2003; 
Month: June; 
Farm: $1.13; 
Cooperative: $1.24; 
Wholesale: Whole: $1.87; 
Wholesale: 2%: $1.66; 
Wholesale: 1%: $1.52; 
Wholesale: Skim: $1.52; 
Retail: Whole: $2.26; 
Retail: 2%: $2.29; 
Retail: 1%: $2.30; 
Retail: Skim: $2.15.

Year: 2003; 
Month: July; 
Farm: $1.16; 
Cooperative: $1.27; 
Wholesale: Whole: $1.88; 
Wholesale: 2%: $1.67; 
Wholesale: 1%: $1.53; 
Wholesale: Skim: $1.53; 
Retail: Whole: $2.25; 
Retail: 2%: $2.29; 
Retail: 1%: $2.29; 
Retail: Skim: $2.13.

Year: 2003; 
Month: August; 
Farm: $1.26; 
Cooperative: $1.37; 
Wholesale: Whole: $1.98; 
Wholesale: 2%: $1.76; 
Wholesale: 1%: $1.62; 
Wholesale: Skim: $1.62; 
Retail: Whole: $2.25; 
Retail: 2%: $2.29; 
Retail: 1%: $2.30; 
Retail: Skim: $2.14.

Year: 2003; 
Month: September; 
Farm: $1.50; 
Cooperative: $1.61; 
Wholesale: Whole: $2.15; 
Wholesale: 2%: $1.94; 
Wholesale: 1%: $1.79; 
Wholesale: Skim: $1.79; 
Retail: Whole: $2.31; 
Retail: 2%: $2.35; 
Retail: 1%: $2.37; 
Retail: Skim: $2.21.

Year: 2003; 
Month: October; 
Farm: $1.54; 
Cooperative: $1.66; 
Wholesale: Whole: $2.25; 
Wholesale: 2%: $2.04; 
Wholesale: 1%: $1.89; 
Wholesale: Skim: $1.89; 
Retail: Whole: $2.33; 
Retail: 2%: $2.38; 
Retail: 1%: $2.40; 
Retail: Skim: $2.24.

Year: 2003; 
Month: November; 
Farm: $1.55; 
Cooperative: $1.67; 
Wholesale: Whole: $2.26; 
Wholesale: 2%: $2.05; 
Wholesale: 1%: $1.90; 
Wholesale: Skim: $1.90; 
Retail: Whole: $2.33; 
Retail: 2%: $2.39; 
Retail: 1%: $2.40; 
Retail: Skim: $2.24.

Year: 2003; 
Month: December; 
Farm: $1.51; 
Cooperative: $1.62; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.00; 
Wholesale: 1%: $1.85; 
Wholesale: Skim: $1.85; 
Retail: Whole: $2.34; 
Retail: 2%: $2.40; 
Retail: 1%: $2.42; 
Retail: Skim: $2.26.

Average; 
Farm: $1.28; 
Cooperative: $1.40; 
Wholesale: Whole: $2.00; 
Wholesale: 2%: $1.79; 
Wholesale: 1%: $1.65; 
Wholesale: Skim: $1.65; 
Retail: Whole: $2.28; 
Retail: 2%: $2.33; 
Retail: 1%: $2.34; 
Retail: Skim: $2.18.

Year: 2004; 
Month: January; 
Farm: $1.34; 
Cooperative: $1.45; 
Wholesale: Whole: $2.08; 
Wholesale: 2%: $1.87; 
Wholesale: 1%: $1.72; 
Wholesale: Skim: $1.72; 
Retail: Whole: $2.35; 
Retail: 2%: $2.40; 
Retail: 1%: $2.42; 
Retail: Skim: $2.26.

Year: 2004; 
Month: February; 
Farm: $1.31; 
Cooperative: $1.43; 
Wholesale: Whole: $2.03; 
Wholesale: 2%: $1.81; 
Wholesale: 1%: $1.67; 
Wholesale: Skim: $1.67; 
Retail: Whole: $2.34; 
Retail: 2%: $2.37; 
Retail: 1%: $2.39; 
Retail: Skim: $2.24.

Year: 2004; 
Month: March; 
Farm: $1.34; 
Cooperative: $1.46; 
Wholesale: Whole: $2.03; 
Wholesale: 2%: $1.81; 
Wholesale: 1%: $1.67; 
Wholesale: Skim: $1.67; 
Retail: Whole: $2.32; 
Retail: 2%: $2.37; 
Retail: 1%: $2.38; 
Retail: Skim: $2.22.

Year: 2004; 
Month: April; 
Farm: $1.49; 
Cooperative: $1.60; 
Wholesale: Whole: $2.20; 
Wholesale: 2%: $1.98; 
Wholesale: 1%: $1.83; 
Wholesale: Skim: $1.83; 
Retail: Whole: $2.32; 
Retail: 2%: $2.37; 
Retail: 1%: $2.38; 
Retail: Skim: $2.26.

Year: 2004; 
Month: May; 
Farm: $2.01; 
Cooperative: $2.12; 
Wholesale: Whole: $2.26; 
Wholesale: 2%: $2.05; 
Wholesale: 1%: $1.90; 
Wholesale: Skim: $1.90; 
Retail: Whole: $2.58; 
Retail: 2%: $2.63; 
Retail: 1%: $2.66; 
Retail: Skim: $2.51.

Average; 
Farm: $1.50; 
Cooperative: $1.61; 
Wholesale: Whole: $ $2.12; 
Wholesale: 2%: $1.90; 
Wholesale: 1%: $1.76; 
Wholesale: Skim: $1.76; 
Retail: Whole: $2.38; 
Retail: 2%: $2.43; 
Retail: 1%: $2.45; 
Wholesale: Skim: $2.30.

Source: GAO's analysis of price data provided by USDA, the Defense 
Commissary Agency, and Information Resources, Inc.

Note: For the Boston market, the farm price is the USDA-estimated farm 
Class I price for 3.5 percent milkfat content; the cooperative price is 
the effective cooperative Class I price for Boston for 3.5 percent
milkfat content during the period that the Northeast Interstate Dairy 
Compact was effective (July 1997 through September 2001); the 
cooperative price after September 2001 is the announced cooperative 
Class I price for Boston for 3.5 percent milkfat content; the wholesale 
price is the price paid by the commissary at Hanscom Air Force Base, 
adjusted for a 5 percent markup; and the retail price is the price 
collected by Information Resources, Inc., for the Boston market. Prices 
may not average due to rounding.

[End of table]

Table 13: Prices for a Gallon of Milk in Charlotte, North Carolina, 
October 2000 through May 2004: 

Year: 2000; 
Month: October; 
Farm: $1.25; 
Cooperative: $1.41; 
Wholesale: Whole: $2.09; 
Wholesale: 2%: $2.05; 
Wholesale: 1%: $2.03; 
Wholesale: Skim: $2.00; 
Retail: Whole: $2.59; 
Retail: 2%: $2.59; 
Retail: 1%: $2.64; 
Retail: Skim: $2.55.

Year: 2000; 
Month: November; 
Farm: $1.24; 
Cooperative: $1.40; 
Wholesale: Whole: $2.08; 
Wholesale: 2%: $2.06; 
Wholesale: 1%: $2.03; 
Wholesale: Skim: $2.00; 
Retail: Whole: $2.56; 
Retail: 2%: $2.56; 
Retail: 1%: $2.59; 
Retail: Skim: $2.52.

Year: 2000; 
Month: December; 
Farm: $1.25; 
Cooperative: $1.41; 
Wholesale: Whole: $2.11; 
Wholesale: 2%: $2.08; 
Wholesale: 1%: $2.03; 
Wholesale: Skim: $2.00; 
Retail: Whole: $2.57; 
Retail: 2%: $2.59; 
Retail: 1%: $2.62; 
Retail: Skim: $2.55.

Average; 
Farm: $1.25; 
Cooperative: $1.41; 
Wholesale: Whole: $2.09; 
Wholesale: 2%: $2.06; 
Wholesale: 1%: $2.03; 
Wholesale: Skim: $2.00; 
Retail: Whole: $2.57; 
Retail: 2%: $2.58; 
Retail: 1%: $2.62; 
Retail: Skim: $2.54.

Year: 2001; 
Month: January; 
Farm: $1.40; 
Cooperative: $1.57; 
Wholesale: Whole: $2.25; 
Wholesale: 2%: $2.18; 
Wholesale: 1%: $2.08; 
Wholesale: Skim: $2.00; 
Retail: Whole: $2.61; 
Retail: 2%: $2.62; 
Retail: 1%: $2.64; 
Retail: Skim: $2.58.

Year: 2001; 
Month: February; 
Farm: $1.25; 
Cooperative: $1.41; 
Wholesale: Whole: $2.10; 
Wholesale: 2%: $2.07; 
Wholesale: 1%: $2.03; 
Wholesale: Skim: $1.98; 
Retail: Whole: $2.56; 
Retail: 2%: $2.57; 
Retail: 1%: $2.60; 
Retail: Skim: $2.53.

Year: 2001; 
Month: March; 
Farm: $1.29; 
Cooperative: $1.45; 
Wholesale: Whole: $2.14; 
Wholesale: 2%: $2.11; 
Wholesale: 1%: $2.08; 
Wholesale: Skim: $2.03; 
Retail: Whole: $2.61; 
Retail: 2%: $2.63; 
Retail: 1%: $2.65; 
Retail: Skim: $2.57.

Year: 2001; 
Month: April; 
Farm: $1.36; 
Cooperative: $1.52; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.15; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.58; 
Retail: 2%: $2.61; 
Retail: 1%: $2.63; 
Retail: Skim: $2.56.

Year: 2001; 
Month: May; 
Farm: $1.41; 
Cooperative: $1.58; 
Wholesale: Whole: $2.28; 
Wholesale: 2%: $2.25; 
Wholesale: 1%: $2.21; 
Wholesale: Skim: $2.17; 
Retail: Whole: $2.59; 
Retail: 2%: $2.62; 
Retail: 1%: $2.64; 
Retail: Skim: $2.57.

Year: 2001; 
Month: June; 
Farm: $1.44; 
Cooperative: $1.61; 
Wholesale: Whole: $2.35; 
Wholesale: 2%: $2.32; 
Wholesale: 1%: $2.28; 
Wholesale: Skim: $2.23; 
Retail: Whole: $2.58; 
Retail: 2%: $2.61; 
Retail: 1%: $2.63; 
Retail: Skim: $2.57.

Year: 2001; 
Month: July; 
Farm: $1.49; 
Cooperative: $1.66; 
Wholesale: Whole: $2.38; 
Wholesale: 2%: $2.35; 
Wholesale: 1%: $2.31; 
Wholesale: Skim: $2.26; 
Retail: Whole: $2.59; 
Retail: 2%: $2.62; 
Retail: 1%: $2.64; 
Retail: Skim: $2.57.

Year: 2001; 
Month: August; 
Farm: $1.49; 
Cooperative: $1.66; 
Wholesale: Whole: $2.52; 
Wholesale: 2%: $2.42; 
Wholesale: 1%: $2.36; 
Wholesale: Skim: $2.30; 
Retail: Whole: $2.58; 
Retail: 2%: $2.61; 
Retail: 1%: $2.63; 
Retail: Skim: $2.56.

Year: 2001; 
Month: September; 
Farm: $1.51; 
Cooperative: $1.68; 
Wholesale: Whole: $2.57; 
Wholesale: 2%: $2.45; 
Wholesale: 1%: $2.38; 
Wholesale: Skim: $2.32; 
Retail: Whole: $2.57; 
Retail: 2%: $2.60; 
Retail: 1%: $2.62; 
Retail: Skim: $2.55.

Year: 2001; 
Month: October; 
Farm: $1.54; 
Cooperative: $1.71; 
Wholesale: Whole: $2.57; 
Wholesale: 2%: $2.46; 
Wholesale: 1%: $2.39; 
Wholesale: Skim: $2.33; 
Retail: Whole: $2.58; 
Retail: 2%: $2.60; 
Retail: 1%: $2.63; 
Retail: Skim: $2.55.

Year: 2001; 
Month: November; 
Farm: $1.53; 
Cooperative: $1.69; 
Wholesale: Whole: $2.60; 
Wholesale: 2%: $2.50; 
Wholesale: 1%: $2.46; 
Wholesale: Skim: $2.42; 
Retail: Whole: $2.62; 
Retail: 2%: $2.64; 
Retail: 1%: $2.68; 
Retail: Skim: $2.62.

Year: 2001; 
Month: December; 
Farm: $1.24; 
Cooperative: $1.41; 
Wholesale: Whole: $2.60; 
Wholesale: 2%: $2.55; 
Wholesale: 1%: $2.54; 
Wholesale: Skim: $2.52; 
Retail: Whole: $2.62; 
Retail: 2%: $2.65; 
Retail: 1%: $2.68; 
Retail: Skim: $2.63.

Average; 
Farm: $1.41; 
Cooperative: $1.58; 
Wholesale: Whole: $2.38; 
Wholesale: 2%: $2.32; 
Wholesale: 1%: $2.27; 
Wholesale: Skim: $2.22; 
Retail: Whole: $2.59; 
Retail: 2%: $2.62; 
Retail: 1%: $2.64; 
Retail: Skim: $2.57.

Year: 2002; 
Month: January; 
Farm: $1.18; 
Cooperative: $1.40; 
Wholesale: Whole: $2.60; 
Wholesale: 2%: $2.55; 
Wholesale: 1%: $2.54; 
Wholesale: Skim: $2.52; 
Retail: Whole: $2.63; 
Retail: 2%: $2.65; 
Retail: 1%: $2.67; 
Retail: Skim: $2.60.

Year: 2002; 
Month: February; 
Farm: $1.18; 
Cooperative: $1.40; 
Wholesale: Whole: $2.60; 
Wholesale: 2%: $2.55; 
Wholesale: 1%: $2.54; 
Wholesale: Skim: $2.52; 
Retail: Whole: $2.59; 
Retail: 2%: $2.60; 
Retail: 1%: $2.65; 
Retail: Skim: $2.58.

Year: 2002; 
Month: March; 
Farm: $1.18; 
Cooperative: $1.40; 
Wholesale: Whole: $2.60; 
Wholesale: 2%: $2.55; 
Wholesale: 1%: $2.54; 
Wholesale: Skim: $2.52; 
Retail: Whole: $2.59; 
Retail: 2%: $2.61; 
Retail: 1%: $2.65; 
Retail: Skim: $2.59.

Year: 2002; 
Month: April; 
Farm: $1.18; 
Cooperative: $1.40; 
Wholesale: Whole: $2.60; 
Wholesale: 2%: $2.55; 
Wholesale: 1%: $2.54; 
Wholesale: Skim: $2.52; 
Retail: Whole: $2.58; 
Retail: 2%: $2.60; 
Retail: 1%: $2.63; 
Retail: Skim: $2.56.

Year: 2002; 
Month: May; 
Farm: $1.19; 
Cooperative: $1.40; 
Wholesale: Whole: $2.60; 
Wholesale: 2%: $2.55; 
Wholesale: 1%: $2.54; 
Wholesale: Skim: $2.52; 
Retail: Whole: $2.57; 
Retail: 2%: $2.59; 
Retail: 1%: $2.63; 
Retail: Skim: $2.57.

Year: 2002; 
Month: June; 
Farm: $1.17; 
Cooperative: $1.38; 
Wholesale: Whole: $2.60; 
Wholesale: 2%: $2.55; 
Wholesale: 1%: $2.54; 
Wholesale: Skim: $2.52; 
Retail: Whole: $2.57; 
Retail: 2%: $2.59; 
Retail: 1%: $2.60; 
Retail: Skim: $2.56.

Year: 2002; 
Month: July; 
Farm: $1.14; 
Cooperative: $1.35; 
Wholesale: Whole: $2.60; 
Wholesale: 2%: $2.55; 
Wholesale: 1%: $2.54; 
Wholesale: Skim: $2.52; 
Retail: Whole: $2.54; 
Retail: 2%: $2.56; 
Retail: 1%: $2.61; 
Retail: Skim: $2.55.

Year: 2002; 
Month: August; 
Farm: $1.12; 
Cooperative: $1.34; 
Wholesale: Whole: $2.60; 
Wholesale: 2%: $2.55; 
Wholesale: 1%: $2.54; 
Wholesale: Skim: $2.52; 
Retail: Whole: $2.56; 
Retail: 2%: $2.58; 
Retail: 1%: $2.62; 
Retail: Skim: $2.56.

Year: 2002; 
Month: September; 
Farm: $1.12; 
Cooperative: $1.34; 
Wholesale: Whole: $2.60; 
Wholesale: 2%: $2.55; 
Wholesale: 1%: $2.54; 
Wholesale: Skim: $2.52; 
Retail: Whole: $2.51; 
Retail: 2%: $2.55; 
Retail: 1%: $2.59; 
Retail: Skim: $2.53.

Year: 2002; 
Month: October; 
Farm: $1.10; 
Cooperative: $1.31; 
Wholesale: Whole: $2.60; 
Wholesale: 2%: $2.55; 
Wholesale: 1%: $2.54; 
Wholesale: Skim: $2.52; 
Retail: Whole: $2.51; 
Retail: 2%: $2.53; 
Retail: 1%: $2.59; 
Retail: Skim: $2.52.

Year: 2002; 
Month: November; 
Farm: $1.14; 
Cooperative: $1.35; 
Wholesale: Whole: $2.63; 
Wholesale: 2%: $2.57; 
Wholesale: 1%: $2.56; 
Wholesale: Skim: $2.54; 
Retail: Whole: $2.59; 
Retail: 2%: $2.60; 
Retail: 1%: $2.65; 
Retail: Skim: $2.58.

Year: 2002; 
Month: December; 
Farm: $1.12; 
Cooperative: $1.34; 
Wholesale: Whole: $2.65; 
Wholesale: 2%: $2.58; 
Wholesale: 1%: $2.57; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.58; 
Retail: 2%: $2.58; 
Retail: 1%: $2.63; 
Retail: Skim: $2.56.

Average; 
Farm: $1.15; 
Cooperative: $1.37; 
Wholesale: Whole: $2.61; 
Wholesale: 2%: $2.55; 
Wholesale: 1%: $2.54; 
Wholesale: Skim: $2.53; 
Retail: Whole: $2.57; 
Retail: 2%: $2.59; 
Retail: 1%: $2.63; 
Retail: Skim: $2.56.

Year: 2003; 
Month: January; 
Farm: $1.13; 
Cooperative: $1.34; 
Wholesale: Whole: $2.65; 
Wholesale: 2%: $2.58; 
Wholesale: 1%: $2.57; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.52; 
Retail: 2%: $2.52; 
Retail: 1%: $2.58; 
Retail: Skim: $2.50.

Year: 2003; 
Month: February; 
Farm: $1.13; 
Cooperative: $1.34; 
Wholesale: Whole: $2.64; 
Wholesale: 2%: $2.57; 
Wholesale: 1%: $2.56; 
Wholesale: Skim: $2.54; 
Retail: Whole: $2.59; 
Retail: 2%: $2.58; 
Retail: 1%: $2.64; 
Retail: Skim: $2.56.

Year: 2003; 
Month: March; 
Farm: $1.10; 
Cooperative: $1.31; 
Wholesale: Whole: $2.62; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $2.55; 
Wholesale: Skim: $2.52; 
Retail: Whole: $2.59; 
Retail: 2%: $2.59; 
Retail: 1%: $2.64; 
Retail: Skim: $2.56.

Year: 2003; 
Month: April; 
Farm: $1.08; 
Cooperative: $1.29; 
Wholesale: Whole: $2.62; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $2.55; 
Wholesale: Skim: $2.52; 
Retail: Whole: $2.58; 
Retail: 2%: $2.57; 
Retail: 1%: $2.62; 
Retail: Skim: $2.54.

Year: 2003; 
Month: May; 
Farm: $1.09; 
Cooperative: $1.30; 
Wholesale: Whole: $2.62; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $2.55; 
Wholesale: Skim: $2.52; 
Retail: Whole: $2.56; 
Retail: 2%: $2.56; 
Retail: 1%: $2.61; 
Retail: Skim: $2.53.

Year: 2003; 
Month: June; 
Farm: $1.09; 
Cooperative: $1.30; 
Wholesale: Whole: $2.62; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $2.55; 
Wholesale: Skim: $2.52; 
Retail: Whole: $2.59; 
Retail: 2%: $2.58; 
Retail: 1%: $2.62; 
Retail: Skim: $2.55.

Year: 2003; 
Month: July; 
Farm: $1.09; 
Cooperative: $1.30; 
Wholesale: Whole: $2.62; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $2.55; 
Wholesale: Skim: $2.52; 
Retail: Whole: $2.56; 
Retail: 2%: $2.56; 
Retail: 1%: $2.63; 
Retail: Skim: $2.53.

Year: 2003; 
Month: August; 
Farm: $1.16; 
Cooperative: $1.38; 
Wholesale: Whole: $2.62; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $2.55; 
Wholesale: Skim: $2.52; 
Retail: Whole: $2.59; 
Retail: 2%: $2.61; 
Retail: 1%: $2.68; 
Retail: Skim: $2.58.

Year: 2003; 
Month: September; 
Farm: $1.35; 
Cooperative: $1.57; 
Wholesale: Whole: $2.77; 
Wholesale: 2%: $2.70; 
Wholesale: 1%: $2.69; 
Wholesale: Skim: $2.66; 
Retail: Whole: $2.62; 
Retail: 2%: $2.64; 
Retail: 1%: $2.71; 
Retail: Skim: $2.65.

Year: 2003; 
Month: October; 
Farm: $1.38; 
Cooperative: $1.60; 
Wholesale: Whole: $2.95; 
Wholesale: 2%: $2.85; 
Wholesale: 1%: $2.87; 
Wholesale: Skim: $2.85; 
Retail: Whole: $2.75; 
Retail: 2%: $2.76; 
Retail: 1%: $2.83; 
Retail: Skim: $2.73.

Year: 2003; 
Month: November; 
Farm: $1.38; 
Cooperative: $1.60; 
Wholesale: Whole: $2.98; 
Wholesale: 2%: $2.85; 
Wholesale: 1%: $2.92; 
Wholesale: Skim: $2.91; 
Retail: Whole: $2.78; 
Retail: 2%: $2.80; 
Retail: 1%: $2.88; 
Retail: Skim: $2.80.

Year: 2003; 
Month: December; 
Farm: $1.37; 
Cooperative: $1.58; 
Wholesale: Whole: $2.98; 
Wholesale: 2%: $2.85; 
Wholesale: 1%: $2.92; 
Wholesale: Skim: $2.91; 
Retail: Whole: $2.80; 
Retail: 2%: $2.82; 
Retail: 1%: $2.90; 
Retail: Skim: $2.81.

Average; 
Farm: $1.20; 
Cooperative: $1.41; 
Wholesale: Whole: $2.72; 
Wholesale: 2%: $2.65; 
Wholesale: 1%: $2.65; 
Wholesale: Skim: $2.63; 
Retail: Whole: $2.63; 
Retail: 2%: $2.63; 
Retail: 1%: $2.70; 
Retail: Skim: $2.61.

Year: 2004; 
Month: January; 
Farm: $1.21; 
Cooperative: $1.43; 
Wholesale: Whole: $2.98; 
Wholesale: 2%: $2.90; 
Wholesale: 1%: $2.92; 
Wholesale: Skim: $2.90; 
Retail: Whole: $2.78; 
Retail: 2%: $2.79; 
Retail: 1%: $2.87; 
Retail: Skim: $2.78.

Year: 2004; 
Month: February; 
Farm: $1.21; 
Cooperative: $1.43; 
Wholesale: Whole: $2.88; 
Wholesale: 2%: $2.82; 
Wholesale: 1%: $2.81; 
Wholesale: Skim: $2.80; 
Retail: Whole: $2.76; 
Retail: 2%: $2.77; 
Retail: 1%: $2.84; 
Retail: Skim: $2.77.

Year: 2004; 
Month: March; 
Farm: $1.21; 
Cooperative: $1.43; 
Wholesale: Whole: $2.78; 
Wholesale: 2%: $2.75; 
Wholesale: 1%: $2.69; 
Wholesale: Skim: $2.66; 
Retail: Whole: $2.74; 
Retail: 2%: $2.75; 
Retail: 1%: $2.83; 
Retail: Skim: $2.73.

Year: 2004; 
Month: April; 
Farm: $1.35; 
Cooperative: $1.57; 
Wholesale: Whole: $2.70; 
Wholesale: 2%: $2.69; 
Wholesale: 1%: $2.57; 
Wholesale: Skim: $2.52; 
Retail: Whole: $2.83; 
Retail: 2%: $2.83; 
Retail: 1%: $2.92; 
Retail: Skim: $2.81.

Year: 2004; 
Month: May; 
Farm: $1.83; 
Cooperative: $2.05; 
Wholesale: Whole: $3.10; 
Wholesale: 2%: $3.05; 
Wholesale: 1%: $2.85; 
Wholesale: Skim: $2.84; 
Retail: Whole: $3.19; 
Retail: 2%: $3.21; 
Retail: 1%: $3.24; 
Retail: Skim: $3.21.

Average; 
Farm: $1.36; 
Cooperative: $1.58; 
Wholesale: Whole: $2.89; 
Wholesale: 2%: $2.84; 
Wholesale: 1%: $2.77; 
Wholesale: Skim: $2.74; 
Retail: Whole: $2.86; 
Retail: 2%: $2.87; 
Retail: 1%: $2.94; 
Wholesale: Skim: $2.86.

Source: GAO's analysis of price data provided by USDA, the Defense 
Commissary Agency, and Information Resources, Inc.

Note: For the Charlotte market, the farm price is the USDA-estimated 
farm Class I price for 3.5 percent milkfat content; the cooperative 
price is the announced cooperative Class I price for Charlotte for 3.5 
percent milkfat content; the wholesale price is the price paid by the 
Fort Bragg North Post Store, adjusted for a 5 percent markup; and the 
retail price is the price collected by Information Resources, Inc., for 
the Charlotte market. Prices may not average due to rounding.

[End of table]

Table 14: Prices for a Gallon of Milk in Cincinnati, Ohio, October 2000 
through May 2004: 

Year: 2000; 
Month: October; 
Farm: $1.20; 
Cooperative: $1.38; 
Wholesale: Whole: N/A; 
Wholesale: 2%: N/A; 
Wholesale: 1%: $1.96; 
Wholesale: Skim: $1.80; 
Retail: Whole: $1.88; 
Retail: 2%: $2.28; 
Retail: 1%: $2.32; 
Retail: Skim: $2.25.

Year: 2000; 
Month: November; 
Farm: $1.19; 
Cooperative: $1.37; 
Wholesale: Whole: N/A; 
Wholesale: 2%: N/A; 
Wholesale: 1%: $1.96; 
Wholesale: Skim: $1.80; 
Retail: Whole: $1.94; 
Retail: 2%: $2.18; 
Retail: 1%: $2.25; 
Retail: Skim: $2.19.

Year: 2000; 
Month: December; 
Farm: $1.22; 
Cooperative: $1.40; 
Wholesale: Whole: N/A; 
Wholesale: 2%: N/A; 
Wholesale: 1%: $1.96; 
Wholesale: Skim: $1.80; 
Retail: Whole: $1.93; 
Retail: 2%: $2.27; 
Retail: 1%: $2.31; 
Retail: Skim: $2.25.

Average; 
Farm: $1.20; 
Cooperative: $1.38; 
Wholesale: Whole: N/A; 
Wholesale: 2%: N/A; 
Wholesale: 1%: $1.96; 
Wholesale: Skim: $1.80; 
Retail: Whole: $1.92; 
Retail: 2%: $2.24; 
Retail: 1%: $2.29; 
Retail: Skim: $2.23.

Year: 2001; 
Month: January; 
Farm: $1.38; 
Cooperative: $1.55; 
Wholesale: Whole: N/A; 
Wholesale: 2%: N/A; 
Wholesale: 1%: $1.96; 
Wholesale: Skim: $1.80; 
Retail: Whole: $2.09; 
Retail: 2%: $2.37; 
Retail: 1%: $2.46; 
Retail: Skim: $2.37.

Year: 2001; 
Month: February; 
Farm: $1.20; 
Cooperative: $1.37; 
Wholesale: Whole: N/A; 
Wholesale: 2%: N/A; 
Wholesale: 1%: $1.96; 
Wholesale: Skim: $1.80; 
Retail: Whole: $1.86; 
Retail: 2%: $2.20; 
Retail: 1%: $2.27; 
Retail: Skim: $2.22.

Year: 2001; 
Month: March; 
Farm: $1.26; 
Cooperative: $1.43; 
Wholesale: Whole: $2.29; 
Wholesale: 2%: $2.12; 
Wholesale: 1%: $1.96; 
Wholesale: Skim: $1.80; 
Retail: Whole: $1.91; 
Retail: 2%: $2.06; 
Retail: 1%: $2.08; 
Retail: Skim: $2.04.

Year: 2001; 
Month: April; 
Farm: $1.33; 
Cooperative: $1.50; 
Wholesale: Whole: $2.34; 
Wholesale: 2%: $2.15; 
Wholesale: 1%: $1.99; 
Wholesale: Skim: $1.81; 
Retail: Whole: $1.88; 
Retail: 2%: $2.21; 
Retail: 1%: $2.28; 
Retail: Skim: $2.21.

Year: 2001; 
Month: May; 
Farm: $1.39; 
Cooperative: $1.56; 
Wholesale: Whole: $2.43; 
Wholesale: 2%: $2.22; 
Wholesale: 1%: $2.03; 
Wholesale: Skim: $1.84; 
Retail: Whole: $1.80; 
Retail: 2%: $2.07; 
Retail: 1%: $1.93; 
Retail: Skim: $1.88.

Year: 2001; 
Month: June; 
Farm: $1.46; 
Cooperative: $1.63; 
Wholesale: Whole: $2.49; 
Wholesale: 2%: $2.26; 
Wholesale: 1%: $2.05; 
Wholesale: Skim: $1.84; 
Retail: Whole: $1.98; 
Retail: 2%: $2.27; 
Retail: 1%: $2.31; 
Retail: Skim: $2.26.

Year: 2001; 
Month: July; 
Farm: $1.50; 
Cooperative: $1.67; 
Wholesale: Whole: $2.53; 
Wholesale: 2%: $2.29; 
Wholesale: 1%: $2.07; 
Wholesale: Skim: $1.85; 
Retail: Whole: $1.98; 
Retail: 2%: $2.28; 
Retail: 1%: $2.32; 
Retail: Skim: $2.25.

Year: 2001; 
Month: August; 
Farm: $1.51; 
Cooperative: $1.67; 
Wholesale: Whole: $2.53; 
Wholesale: 2%: $2.29; 
Wholesale: 1%: $2.07; 
Wholesale: Skim: $1.85; 
Retail: Whole: $1.94; 
Retail: 2%: $2.38; 
Retail: 1%: $2.47; 
Retail: Skim: $2.41.

Year: 2001; 
Month: September; 
Farm: $1.52; 
Cooperative: $1.69; 
Wholesale: Whole: $2.54; 
Wholesale: 2%: $2.30; 
Wholesale: 1%: $2.08; 
Wholesale: Skim: $1.86; 
Retail: Whole: $2.00; 
Retail: 2%: $2.42; 
Retail: 1%: $2.46; 
Retail: Skim: $2.40.

Year: 2001; 
Month: October; 
Farm: $1.55; 
Cooperative: $1.72; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.30; 
Wholesale: 1%: $2.06; 
Wholesale: Skim: $1.82; 
Retail: Whole: $1.95; 
Retail: 2%: $2.23; 
Retail: 1%: $2.29; 
Retail: Skim: $2.15.

Year: 2001; 
Month: November; 
Farm: $1.52; 
Cooperative: $1.70; 
Wholesale: Whole: $2.39; 
Wholesale: 2%: $2.36; 
Wholesale: 1%: $2.15; 
Wholesale: Skim: $1.96; 
Retail: Whole: $2.02; 
Retail: 2%: $2.56; 
Retail: 1%: $2.67; 
Retail: Skim: $2.55.

Year: 2001; 
Month: December; 
Farm: $1.21; 
Cooperative: $1.37; 
Wholesale: Whole: $2.28; 
Wholesale: 2%: $2.09; 
Wholesale: 1%: $2.19; 
Wholesale: Skim: $2.00; 
Retail: Whole: $1.87; 
Retail: 2%: $2.29; 
Retail: 1%: $2.36; 
Retail: Skim: $2.27.

Average; 
Farm: $1.40; 
Cooperative: $1.57; 
Wholesale: Whole: $2.44; 
Wholesale: 2%: $2.24; 
Wholesale: 1%: $2.05; 
Wholesale: Skim: $1.85; 
Retail: Whole: $1.94; 
Retail: 2%: $2.28; 
Retail: 1%: $2.33; 
Retail: Skim: $2.25.

Year: 2002; 
Month: January; 
Farm: $1.19; 
Cooperative: $1.36; 
Wholesale: Whole: $2.26; 
Wholesale: 2%: $2.06; 
Wholesale: 1%: $2.19; 
Wholesale: Skim: $2.00; 
Retail: Whole: $1.96; 
Retail: 2%: $2.38; 
Retail: 1%: $2.44; 
Retail: Skim: $2.34.

Year: 2002; 
Month: February; 
Farm: $1.19; 
Cooperative: $1.36; 
Wholesale: Whole: $2.26; 
Wholesale: 2%: $2.06; 
Wholesale: 1%: $2.19; 
Wholesale: Skim: $2.00; 
Retail: Whole: $1.91; 
Retail: 2%: $2.37; 
Retail: 1%: $2.46; 
Retail: Skim: $2.38.

Year: 2002; 
Month: March; 
Farm: $1.17; 
Cooperative: $1.33; 
Wholesale: Whole: $2.23; 
Wholesale: 2%: $2.03; 
Wholesale: 1%: $2.19; 
Wholesale: Skim: $2.00; 
Retail: Whole: $1.93; 
Retail: 2%: $2.36; 
Retail: 1%: $2.50; 
Retail: Skim: $2.36.

Year: 2002; 
Month: April; 
Farm: $1.15; 
Cooperative: $1.32; 
Wholesale: Whole: $2.23; 
Wholesale: 2%: $2.03; 
Wholesale: 1%: N/A; 
Wholesale: Skim: N/A; 
Retail: Whole: $1.95; 
Retail: 2%: $2.28; 
Retail: 1%: $2.29; 
Retail: Skim: $2.22.

Year: 2002; 
Month: May; 
Farm: $1.13; 
Cooperative: $1.30; 
Wholesale: Whole: $2.20; 
Wholesale: 2%: $2.00; 
Wholesale: 1%: N/A; 
Wholesale: Skim: N/A; 
Retail: Whole: $1.88; 
Retail: 2%: $2.44; 
Retail: 1%: $2.48; 
Retail: Skim: $2.38.

Year: 2002; 
Month: June; 
Farm: $1.11; 
Cooperative: $1.28; 
Wholesale: Whole: $2.19; 
Wholesale: 2%: $1.99; 
Wholesale: 1%: N/A; 
Wholesale: Skim: N/A; 
Retail: Whole: $1.81; 
Retail: 2%: $2.21; 
Retail: 1%: $2.27; 
Retail: Skim: $2.18.

Year: 2002; 
Month: July; 
Farm: $1.08; 
Cooperative: $1.24; 
Wholesale: Whole: $2.16; 
Wholesale: 2%: $1.96; 
Wholesale: 1%: N/A; 
Wholesale: Skim: N/A; 
Retail: Whole: $1.81; 
Retail: 2%: $2.30; 
Retail: 1%: $2.33; 
Retail: Skim: $2.24.

Year: 2002; 
Month: August; 
Farm: $1.07; 
Cooperative: $1.23; 
Wholesale: Whole: $2.14; 
Wholesale: 2%: $1.94; 
Wholesale: 1%: N/A; 
Wholesale: Skim: N/A; 
Retail: Whole: $1.82; 
Retail: 2%: $2.33; 
Retail: 1%: $2.36; 
Retail: Skim: $2.27.

Year: 2002; 
Month: September; 
Farm: $1.07; 
Cooperative: $1.23; 
Wholesale: Whole: $2.14; 
Wholesale: 2%: $1.94; 
Wholesale: 1%: N/A; 
Wholesale: Skim: N/A; 
Retail: Whole: $1.81; 
Retail: 2%: $2.34; 
Retail: 1%: $2.38; 
Retail: Skim: $2.28.

Year: 2002; 
Month: October; 
Farm: $1.03; 
Cooperative: $1.20; 
Wholesale: Whole: $2.11; 
Wholesale: 2%: $1.91; 
Wholesale: 1%: N/A; 
Wholesale: Skim: N/A; 
Retail: Whole: $1.79; 
Retail: 2%: $2.28; 
Retail: 1%: $2.32; 
Retail: Skim: $2.23.

Year: 2002; 
Month: November; 
Farm: $1.07; 
Cooperative: $1.24; 
Wholesale: Whole: $2.15; 
Wholesale: 2%: $1.95; 
Wholesale: 1%: N/A; 
Wholesale: Skim: N/A; 
Retail: Whole: $1.83; 
Retail: 2%: $2.43; 
Retail: 1%: $2.48; 
Retail: Skim: $2.37.

Year: 2002; 
Month: December; 
Farm: $1.07; 
Cooperative: $1.23; 
Wholesale: Whole: $2.14; 
Wholesale: 2%: $1.94; 
Wholesale: 1%: $1.75; 
Wholesale: Skim: $1.56; 
Retail: Whole: $1.85; 
Retail: 2%: $2.37; 
Retail: 1%: $2.40; 
Retail: Skim: $2.32.

Average; 
Farm: $1.11; 
Cooperative: $1.28; 
Wholesale: Whole: $2.18; 
Wholesale: 2%: $1.98; 
Wholesale: 1%: $2.08; 
Wholesale: Skim: $1.89; 
Retail: Whole: $1.86; 
Retail: 2%: $2.34; 
Retail: 1%: $2.39; 
Retail: Skim: $2.30.

Year: 2003; 
Month: January; 
Farm: $1.07; 
Cooperative: $1.24; 
Wholesale: Whole: $2.14; 
Wholesale: 2%: $1.94; 
Wholesale: 1%: $1.75; 
Wholesale: Skim: $1.56; 
Retail: Whole: $1.72; 
Retail: 2%: $2.35; 
Retail: 1%: $2.39; 
Retail: Skim: $2.30.

Year: 2003; 
Month: February; 
Farm: $1.06; 
Cooperative: $1.24; 
Wholesale: Whole: $2.11; 
Wholesale: 2%: $1.90; 
Wholesale: 1%: $1.75; 
Wholesale: Skim: $1.56; 
Retail: Whole: $1.82; 
Retail: 2%: $2.29; 
Retail: 1%: $2.33; 
Retail: Skim: $2.24.

Year: 2003; 
Month: March; 
Farm: $1.02; 
Cooperative: $1.20; 
Wholesale: Whole: $2.07; 
Wholesale: 2%: $1.86; 
Wholesale: 1%: $1.71; 
Wholesale: Skim: $1.52; 
Retail: Whole: $1.84; 
Retail: 2%: $2.30; 
Retail: 1%: $2.34; 
Retail: Skim: $2.24.

Year: 2003; 
Month: April; 
Farm: $1.01; 
Cooperative: $1.19; 
Wholesale: Whole: $2.06; 
Wholesale: 2%: $1.85; 
Wholesale: 1%: $1.71; 
Wholesale: Skim: $1.52; 
Retail: Whole: $1.74; 
Retail: 2%: $2.21; 
Retail: 1%: $2.24; 
Retail: Skim: $2.17.

Year: 2003; 
Month: May; 
Farm: $1.02; 
Cooperative: $1.19; 
Wholesale: Whole: $2.07; 
Wholesale: 2%: $1.86; 
Wholesale: 1%: $1.68; 
Wholesale: Skim: $1.49; 
Retail: Whole: $1.84; 
Retail: 2%: $2.38; 
Retail: 1%: $2.42; 
Retail: Skim: $2.32.

Year: 2003; 
Month: June; 
Farm: $1.02; 
Cooperative: $1.20; 
Wholesale: Whole: $2.07; 
Wholesale: 2%: $1.86; 
Wholesale: 1%: $1.68; 
Wholesale: Skim: $1.49; 
Retail: Whole: $1.80; 
Retail: 2%: $2.47; 
Retail: 1%: $2.54; 
Retail: Skim: $2.42.

Year: 2003; 
Month: July; 
Farm: $1.02; 
Cooperative: $1.20; 
Wholesale: Whole: $2.08; 
Wholesale: 2%: $1.87; 
Wholesale: 1%: $1.69; 
Wholesale: Skim: $1.50; 
Retail: Whole: $1.82; 
Retail: 2%: $2.30; 
Retail: 1%: $2.33; 
Retail: Skim: $2.25.

Year: 2003; 
Month: August; 
Farm: $1.09; 
Cooperative: $1.27; 
Wholesale: Whole: $2.17; 
Wholesale: 2%: $1.97; 
Wholesale: 1%: $1.78; 
Wholesale: Skim: $1.59; 
Retail: Whole: $1.86; 
Retail: 2%: $2.43; 
Retail: 1%: $2.48; 
Retail: Skim: $2.37.

Year: 2003; 
Month: September; 
Farm: $1.33; 
Cooperative: $1.51; 
Wholesale: Whole: $2.39; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.01; 
Wholesale: Skim: $1.81; 
Retail: Whole: $1.83; 
Retail: 2%: $2.38; 
Retail: 1%: $2.42; 
Retail: Skim: $2.32.

Year: 2003; 
Month: October; 
Farm: $1.38; 
Cooperative: $1.56; 
Wholesale: Whole: $2.44; 
Wholesale: 2%: $2.24; 
Wholesale: 1%: $2.06; 
Wholesale: Skim: $1.86; 
Retail: Whole: $1.86; 
Retail: 2%: $2.36; 
Retail: 1%: $2.42; 
Retail: Skim: $2.31.

Year: 2003; 
Month: November; 
Farm: $1.38; 
Cooperative: $1.56; 
Wholesale: Whole: $2.45; 
Wholesale: 2%: $2.25; 
Wholesale: 1%: $2.07; 
Wholesale: Skim: $1.87; 
Retail: Whole: $1.88; 
Retail: 2%: $2.40; 
Retail: 1%: $2.46; 
Retail: Skim: $2.34.

Year: 2003; 
Month: December; 
Farm: $1.34; 
Cooperative: $1.52; 
Wholesale: Whole: $2.39; 
Wholesale: 2%: $2.20; 
Wholesale: 1%: $2.06; 
Wholesale: Skim: $1.86; 
Retail: Whole: $1.87; 
Retail: 2%: $2.15; 
Retail: 1%: $2.18; 
Retail: Skim: $2.08.

Average; 
Farm: $1.15; 
Cooperative: $1.32; 
Wholesale: Whole: $2.20; 
Wholesale: 2%: $2.00; 
Wholesale: 1%: $1.83; 
Wholesale: Skim: $1.64; 
Retail: Whole: $1.82; 
Retail: 2%: $2.34; 
Retail: 1%: $2.38; 
Retail: Skim: $2.28.

Year: 2004; 
Month: January; 
Farm: $1.18; 
Cooperative: $1.36; 
Wholesale: Whole: $2.27; 
Wholesale: 2%: $2.07; 
Wholesale: 1%: $1.89; 
Wholesale: Skim: $1.70; 
Retail: Whole: $1.71; 
Retail: 2%: $2.08; 
Retail: 1%: $2.07; 
Retail: Skim: $2.00.

Year: 2004; 
Month: February; 
Farm: $1.15; 
Cooperative: $1.33; 
Wholesale: Whole: $2.22; 
Wholesale: 2%: $2.02; 
Wholesale: 1%: $1.83; 
Wholesale: Skim: $1.64; 
Retail: Whole: $1.63; 
Retail: 2%: $1.89; 
Retail: 1%: $1.88; 
Retail: Skim: $1.82.

Year: 2004; 
Month: March; 
Farm: $1.18; 
Cooperative: $1.36; 
Wholesale: Whole: $2.25; 
Wholesale: 2%: $2.05; 
Wholesale: 1%: $1.86; 
Wholesale: Skim: $1.67; 
Retail: Whole: $1.63; 
Retail: 2%: $1.87; 
Retail: 1%: $1.85; 
Retail: Skim: $1.80.

Year: 2004; 
Month: April; 
Farm: $1.33; 
Cooperative: $1.51; 
Wholesale: Whole: $2.41; 
Wholesale: 2%: $2.21; 
Wholesale: 1%: $2.03; 
Wholesale: Skim: $1.83; 
Retail: Whole: $1.46; 
Retail: 2%: $1.70; 
Retail: 1%: $1.60; 
Retail: Skim: $1.56.

Year: 2004; 
Month: May; 
Farm: $1.85; 
Cooperative: $2.03; 
Wholesale: Whole: $2.88; 
Wholesale: 2%: $2.68; 
Wholesale: 1%: $2.50; 
Wholesale: Skim: $2.31; 
Retail: Whole: $1.87; 
Retail: 2%: $2.19; 
Retail: 1%: $2.14; 
Retail: Skim: $2.05.

Average; 
Farm: $1.34; 
Cooperative: $1.52; 
Wholesale: Whole: $2.41; 
Wholesale: 2%: $ 2.21; 
Wholesale: 1%: $2.02; 
Wholesale: Skim: $1.83; 
Retail: Whole: $1.66; 
Retail: 2%: $1.95; 
Retail: 1%: $1.91; 
Wholesale: Skim: $1.85.

Source: GAO's analysis of price data provided by USDA, the Defense 
Commissary Agency, and Information Resources, Inc.

Note: For the Cincinnati market, the farm price is the USDA-estimated 
farm Class I price for 3.5 percent milkfat content; the cooperative 
price is the announced cooperative Class I price for Cincinnati for 3.5 
percent milkfat content; the wholesale price is the price paid by the 
commissary at Wright-Patterson Air Force Base, adjusted for a 5 percent 
markup; and the retail price is the price collected by Information 
Resources, Inc., for the Cincinnati market. Prices may not average due 
to rounding. "N/A" indicates data not available.

[End of table]

Table 15: Prices for a Gallon of Milk in Dallas, Texas, October 2000 
through May 2004: 

Year: 2000; 
Month: October; 
Farm: $1.24; 
Cooperative: $1.35; 
Wholesale: Whole: $2.06; 
Wholesale: 2%: $2.06; 
Wholesale: 1%: $2.02; 
Wholesale: Skim: $1.95; 
Retail: Whole: $1.79; 
Retail: 2%: $1.64; 
Retail: 1%: $1.75; 
Retail: Skim: $1.67.

Year: 2000; 
Month: November; 
Farm: $1.23; 
Cooperative: $1.35; 
Wholesale: Whole: $2.06; 
Wholesale: 2%: $2.06; 
Wholesale: 1%: $2.02; 
Wholesale: Skim: $1.95; 
Retail: Whole: $1.87; 
Retail: 2%: $1.77; 
Retail: 1%: $2.01; 
Retail: Skim: $1.80.

Year: 2000; 
Month: December; 
Farm: $1.24; 
Cooperative: $1.35; 
Wholesale: Whole: $2.06; 
Wholesale: 2%: $2.03; 
Wholesale: 1%: $2.02; 
Wholesale: Skim: $1.95; 
Retail: Whole: $2.00; 
Retail: 2%: $1.82; 
Retail: 1%: $2.02; 
Retail: Skim: $1.81.

Average; 
Farm: $1.24; 
Cooperative: $1.35; 
Wholesale: Whole: $2.06; 
Wholesale: 2%: $2.05; 
Wholesale: 1%: $2.02; 
Wholesale: Skim: $1.95; 
Retail: Whole: $1.89; 
Retail: 2%: $1.74; 
Retail: 1%: $1.93; 
Retail: Skim: $1.76.

Year: 2001; 
Month: January; 
Farm: $1.35; 
Cooperative: $1.46; 
Wholesale: Whole: $2.06; 
Wholesale: 2%: $2.03; 
Wholesale: 1%: $2.02; 
Wholesale: Skim: $1.95; 
Retail: Whole: $2.01; 
Retail: 2%: $1.89; 
Retail: 1%: $2.12; 
Retail: Skim: $1.87.

Year: 2001; 
Month: February; 
Farm: $1.25; 
Cooperative: $1.36; 
Wholesale: Whole: $2.15; 
Wholesale: 2%: $2.12; 
Wholesale: 1%: $2.11; 
Wholesale: Skim: $2.04; 
Retail: Whole: $2.02; 
Retail: 2%: $1.91; 
Retail: 1%: $2.07; 
Retail: Skim: $1.91.

Year: 2001; 
Month: March; 
Farm: $1.29; 
Cooperative: $1.40; 
Wholesale: Whole: $2.16; 
Wholesale: 2%: $2.13; 
Wholesale: 1%: $2.12; 
Wholesale: Skim: $2.04; 
Retail: Whole: $1.96; 
Retail: 2%: $1.85; 
Retail: 1%: $2.03; 
Retail: Skim: $1.84.

Year: 2001; 
Month: April; 
Farm: $1.35; 
Cooperative: $1.46; 
Wholesale: Whole: $2.16; 
Wholesale: 2%: $2.13; 
Wholesale: 1%: $2.12; 
Wholesale: Skim: $2.04; 
Retail: Whole: $2.00; 
Retail: 2%: $1.92; 
Retail: 1%: $2.06; 
Retail: Skim: $1.92.

Year: 2001; 
Month: May; 
Farm: $1.40; 
Cooperative: $1.51; 
Wholesale: Whole: $2.16; 
Wholesale: 2%: $2.13; 
Wholesale: 1%: $2.12; 
Wholesale: Skim: $2.04; 
Retail: Whole: $2.05; 
Retail: 2%: $1.94; 
Retail: 1%: $2.07; 
Retail: Skim: $1.94.

Year: 2001; 
Month: June; 
Farm: $1.43; 
Cooperative: $1.55; 
Wholesale: Whole: $2.16; 
Wholesale: 2%: $2.13; 
Wholesale: 1%: $2.12; 
Wholesale: Skim: $2.04; 
Retail: Whole: $2.07; 
Retail: 2%: $2.00; 
Retail: 1%: $2.05; 
Retail: Skim: $1.98.

Year: 2001; 
Month: July; 
Farm: $1.50; 
Cooperative: $1.61; 
Wholesale: Whole: $2.16; 
Wholesale: 2%: $2.13; 
Wholesale: 1%: $2.12; 
Wholesale: Skim: $2.04; 
Retail: Whole: $2.08; 
Retail: 2%: $2.00; 
Retail: 1%: $2.09; 
Retail: Skim: $1.96.

Year: 2001; 
Month: August; 
Farm: $1.50; 
Cooperative: $1.62; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.18; 
Wholesale: 1%: $2.15; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.08; 
Retail: 2%: $2.06; 
Retail: 1%: $2.18; 
Retail: Skim: $2.05.

Year: 2001; 
Month: September; 
Farm: $1.50; 
Cooperative: $1.61; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.18; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.06; 
Retail: 2%: $2.02; 
Retail: 1%: $2.09; 
Retail: Skim: $1.99.

Year: 2001; 
Month: October; 
Farm: $1.54; 
Cooperative: $1.64; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.18; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.10; 
Retail: 2%: $2.04; 
Retail: 1%: $2.12; 
Retail: Skim: $2.05.

Year: 2001; 
Month: November; 
Farm: $1.53; 
Cooperative: $1.63; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.18; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.08; 
Retail: 2%: $2.05; 
Retail: 1%: $2.19; 
Retail: Skim: $2.06.

Year: 2001; 
Month: December; 
Farm: $1.25; 
Cooperative: $1.36; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.18; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.16; 
Retail: 2%: $2.10; 
Retail: 1%: $2.14; 
Retail: Skim: $2.10.

Average; 
Farm: $1.41; 
Cooperative: $1.52; 
Wholesale: Whole: $2.17; 
Wholesale: 2%: $2.15; 
Wholesale: 1%: $2.13; 
Wholesale: Skim: $2.06; 
Retail: Whole: $2.06; 
Retail: 2%: $1.98; 
Retail: 1%: $2.10; 
Retail: Skim: $1.97.

Year: 2002; 
Month: January; 
Farm: $1.25; 
Cooperative: $1.36; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.18; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.03; 
Retail: 2%: $2.03; 
Retail: 1%: $2.20; 
Retail: Skim: $2.01.

Year: 2002; 
Month: February; 
Farm: $1.26; 
Cooperative: $1.36; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.18; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.09; 
Retail: 2%: $2.03; 
Retail: 1%: $2.15; 
Retail: Skim: $2.02.

Year: 2002; 
Month: March; 
Farm: $1.27; 
Cooperative: $1.37; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.18; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.02; 
Retail: 2%: $2.00; 
Retail: 1%: $2.11; 
Retail: Skim: $1.97.

Year: 2002; 
Month: April; 
Farm: $1.27; 
Cooperative: $1.37; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.18; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.05; 
Retail: 2%: $2.01; 
Retail: 1%: $2.14; 
Retail: Skim: $2.00.

Year: 2002; 
Month: May; 
Farm: $1.27; 
Cooperative: $1.37; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.18; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.08; 
Retail: 2%: $2.02; 
Retail: 1%: $2.17; 
Retail: Skim: $2.00.

Year: 2002; 
Month: June; 
Farm: $1.27; 
Cooperative: $1.37; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.18; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.10; 
Retail: 2%: $2.06; 
Retail: 1%: $2.21; 
Retail: Skim: $2.07.

Year: 2002; 
Month: July; 
Farm: $1.20; 
Cooperative: $1.29; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.18; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.07; 
Retail: 2%: $2.06; 
Retail: 1%: $2.23; 
Retail: Skim: $2.06.

Year: 2002; 
Month: August; 
Farm: $1.18; 
Cooperative: $1.28; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.18; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.08; 
Retail: 2%: $2.06; 
Retail: 1%: $2.23; 
Retail: Skim: $2.06.

Year: 2002; 
Month: September; 
Farm: $1.18; 
Cooperative: $1.28; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.18; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.07; 
Retail: 2%: $2.05; 
Retail: 1%: $2.18; 
Retail: Skim: $2.05.

Year: 2002; 
Month: October; 
Farm: $1.15; 
Cooperative: $1.25; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.18; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.06; 
Retail: 2%: $2.06; 
Retail: 1%: $2.18; 
Retail: Skim: $2.06.

Year: 2002; 
Month: November; 
Farm: $1.20; 
Cooperative: $1.28; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.18; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.05; 
Retail: 2%: $1.99; 
Retail: 1%: $2.08; 
Retail: Skim: $1.99.

Year: 2002; 
Month: December; 
Farm: $1.18; 
Cooperative: $1.28; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.18; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.02; 
Retail: 2%: $1.97; 
Retail: 1%: $2.05; 
Retail: Skim: $1.97.

Average; 
Farm: $1.22; 
Cooperative: $1.32; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.18; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.06; 
Retail: 2%: $2.03; 
Retail: 1%: $2.16; 
Retail: Skim: $2.02.

Year: 2003; 
Month: January; 
Farm: $1.19; 
Cooperative: $1.29; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.18; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.02; 
Retail: 2%: $1.98; 
Retail: 1%: $2.07; 
Retail: Skim: $1.96.

Year: 2003; 
Month: February; 
Farm: $1.16; 
Cooperative: $1.26; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.18; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.01; 
Retail: 2%: $1.95; 
Retail: 1%: $2.03; 
Retail: Skim: $1.93.

Year: 2003; 
Month: March; 
Farm: $1.12; 
Cooperative: $1.22; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.18; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.05; 
Retail: 2%: $1.97; 
Retail: 1%: $2.04; 
Retail: Skim: $1.96.

Year: 2003; 
Month: April; 
Farm: $1.11; 
Cooperative: $1.21; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.18; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.07; 
Retail: 2%: $2.00; 
Retail: 1%: $2.07; 
Retail: Skim: $2.00.

Year: 2003; 
Month: May; 
Farm: $1.11; 
Cooperative: $1.22; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.18; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.06; 
Retail: 2%: $1.96; 
Retail: 1%: $2.05; 
Retail: Skim: $1.96.

Year: 2003; 
Month: June; 
Farm: $1.11; 
Cooperative: $1.22; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.18; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.07; 
Retail: 2%: $2.01; 
Retail: 1%: $2.08; 
Retail: Skim: $1.99.

Year: 2003; 
Month: July; 
Farm: $1.11; 
Cooperative: $1.22; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.18; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.06; 
Retail: 2%: $1.98; 
Retail: 1%: $2.07; 
Retail: Skim: $1.96.

Year: 2003; 
Month: August; 
Farm: $1.19; 
Cooperative: $1.30; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.18; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.14; 
Retail: 2%: $2.01; 
Retail: 1%: $2.12; 
Retail: Skim: $1.99.

Year: 2003; 
Month: September; 
Farm: $1.41; 
Cooperative: $1.52; 
Wholesale: Whole: $2.39; 
Wholesale: 2%: $2.37; 
Wholesale: 1%: $2.26; 
Wholesale: Skim: $2.27; 
Retail: Whole: $2.18; 
Retail: 2%: $2.05; 
Retail: 1%: $2.14; 
Retail: Skim: $2.02.

Year: 2003; 
Month: October; 
Farm: $1.43; 
Cooperative: $1.54; 
Wholesale: Whole: $2.39; 
Wholesale: 2%: $2.37; 
Wholesale: 1%: $2.43; 
Wholesale: Skim: $2.27; 
Retail: Whole: $2.27; 
Retail: 2%: $2.17; 
Retail: 1%: $2.27; 
Retail: Skim: $2.16.

Year: 2003; 
Month: November; 
Farm: $1.43; 
Cooperative: $1.54; 
Wholesale: Whole: $2.39; 
Wholesale: 2%: $2.37; 
Wholesale: 1%: $2.45; 
Wholesale: Skim: $2.27; 
Retail: Whole: $2.24; 
Retail: 2%: $2.11; 
Retail: 1%: $2.21; 
Retail: Skim: $2.10.

Year: 2003; 
Month: December; 
Farm: $1.42; 
Cooperative: $1.53; 
Wholesale: Whole: $2.49; 
Wholesale: 2%: $2.46; 
Wholesale: 1%: $2.44; 
Wholesale: Skim: $2.37; 
Retail: Whole: $2.19; 
Retail: 2%: $2.05; 
Retail: 1%: $2.06; 
Retail: Skim: $2.02.

Average; 
Farm: $1.23; 
Cooperative: $1.34; 
Wholesale: Whole: $2.28; 
Wholesale: 2%: $2.26; 
Wholesale: 1%: $2.25; 
Wholesale: Skim: $2.17; 
Retail: Whole: $2.11; 
Retail: 2%: $2.02; 
Retail: 1%: $2.10; 
Retail: Skim: $2.00.

Year: 2004; 
Month: January; 
Farm: $1.27; 
Cooperative: $1.38; 
Wholesale: Whole: $2.41; 
Wholesale: 2%: $2.38; 
Wholesale: 1%: $2.37; 
Wholesale: Skim: $2.28; 
Retail: Whole: $2.16; 
Retail: 2%: $2.01; 
Retail: 1%: $2.01; 
Retail: Skim: $1.95.

Year: 2004; 
Month: February; 
Farm: $1.27; 
Cooperative: $1.38; 
Wholesale: Whole: $2.39; 
Wholesale: 2%: $2.37; 
Wholesale: 1%: $2.35; 
Wholesale: Skim: $2.26; 
Retail: Whole: $2.15; 
Retail: 2%: $1.96; 
Retail: 1%: $1.98; 
Retail: Skim: $1.92.

Year: 2004; 
Month: March; 
Farm: $1.28; 
Cooperative: $1.38; 
Wholesale: Whole: $2.39; 
Wholesale: 2%: $2.37; 
Wholesale: 1%: $2.35; 
Wholesale: Skim: $2.26; 
Retail: Whole: $2.14; 
Retail: 2%: $1.97; 
Retail: 1%: $1.96; 
Retail: Skim: $1.94.

Year: 2004; 
Month: April; 
Farm: $1.42; 
Cooperative: $1.52; 
Wholesale: Whole: $2.43; 
Wholesale: 2%: $2.40; 
Wholesale: 1%: $2.38; 
Wholesale: Skim: $2.29; 
Retail: Whole: $2.24; 
Retail: 2%: $2.03; 
Retail: 1%: $2.03; 
Retail: Skim: $1.95.

Year: 2004; 
Month: May; 
Farm: $1.89; 
Cooperative: $2.00; 
Wholesale: Whole: $2.87; 
Wholesale: 2%: $2.84; 
Wholesale: 1%: $2.82; 
Wholesale: Skim: $2.74; 
Retail: Whole: $2.79; 
Retail: 2%: $2.67; 
Retail: 1%: $2.77; 
Retail: Skim: $2.52.

Average; 
Farm: $1.43; 
Cooperative: $1.53; 
Wholesale: Whole: $2.50; 
Wholesale: 2%: $2.47; 
Wholesale: 1%: $2.45; 
Wholesale: Skim: $2.37; 
2.37: [Empty]; 
Retail: Whole: $2.30; 
Retail: 2%: $2.13; 
Retail: 1%: $2.15; 
Wholesale: Skim: $2.06.

Source: GAO's analysis of price data provided by USDA, the Defense 
Commissary Agency, and Information Resources, Inc.

Note: For the Dallas market, the farm price is the USDA-estimated farm 
Class I price for 3.5 percent milkfat content; the cooperative price is 
the announced cooperative Class I price for Dallas for 3.5 percent 
milkfat content; the wholesale price is the average of the prices paid 
by the two commissaries at Fort Hood, adjusted for a 5 percent markup; 
and the retail price is the price collected by Information Resources, 
Inc., for the Dallas market. Prices may not average due to rounding.

[End of table]

Table 16: Prices for a Gallon of Milk in Denver, Colorado, October 2000 
through May 2004: 

Year: 2000; 
Month: October; 
Farm: $1.18; 
Cooperative: $1.31; 
Wholesale: Whole: $1.94; 
Wholesale: 2%: $1.71; 
Wholesale: 1%: $1.62; 
Wholesale: Skim: $1.52; 
Retail: Whole: $2.55; 
Retail: 2%: $2.43; 
Retail: 1%: $2.45; 
Retail: Skim: $2.23.

Year: 2000; 
Month: November; 
Farm: $1.19; 
Cooperative: $1.30; 
Wholesale: Whole: $1.94; 
Wholesale: 2%: $1.72; 
Wholesale: 1%: $1.63; 
Wholesale: Skim: $1.53; 
Retail: Whole: $2.55; 
Retail: 2%: $2.44; 
Retail: 1%: $2.46; 
Retail: Skim: $2.25.

Year: 2000; 
Month: December; 
Farm: $1.21; 
Cooperative: $1.33; 
Wholesale: Whole: $1.97; 
Wholesale: 2%: $1.75; 
Wholesale: 1%: $1.65; 
Wholesale: Skim: $1.56; 
Retail: Whole: $2.58; 
Retail: 2%: $2.49; 
Retail: 1%: $2.45; 
Retail: Skim: $2.27.

Average; 
Farm: $1.19; 
Cooperative: $1.31; 
Wholesale: Whole: $1.95; 
Wholesale: 2%: $1.73; 
Wholesale: 1%: $1.63; 
Wholesale: Skim: $1.54; 
Retail: Whole: $2.56; 
Retail: 2%: $2.45; 
Retail: 1%: $2.45; 
Retail: Skim: $2.25.

Year: 2001; 
Month: January; 
Farm: $1.38; 
Cooperative: $1.49; 
Wholesale: Whole: $2.10; 
Wholesale: 2%: $1.88; 
Wholesale: 1%: $1.79; 
Wholesale: Skim: $1.70; 
Retail: Whole: $2.62; 
Retail: 2%: $2.50; 
Retail: 1%: $2.56; 
Retail: Skim: $2.28.

Year: 2001; 
Month: February; 
Farm: $1.21; 
Cooperative: $1.31; 
Wholesale: Whole: $1.97; 
Wholesale: 2%: $1.75; 
Wholesale: 1%: $1.54; 
Wholesale: Skim: $1.57; 
Retail: Whole: $2.57; 
Retail: 2%: $2.48; 
Retail: 1%: $2.54; 
Retail: Skim: $2.27.

Year: 2001; 
Month: March; 
Farm: $1.27; 
Cooperative: $1.37; 
Wholesale: Whole: $1.99; 
Wholesale: 2%: $1.77; 
Wholesale: 1%: $1.55; 
Wholesale: Skim: $1.59; 
Retail: Whole: $2.49; 
Retail: 2%: $2.45; 
Retail: 1%: $2.48; 
Retail: Skim: $2.15.

Year: 2001; 
Month: April; 
Farm: $1.33; 
Cooperative: $1.44; 
Wholesale: Whole: $2.07; 
Wholesale: 2%: $1.85; 
Wholesale: 1%: $1.63; 
Wholesale: Skim: $1.67; 
Retail: Whole: $2.59; 
Retail: 2%: $2.50; 
Retail: 1%: $2.50; 
Retail: Skim: $2.30.

Year: 2001; 
Month: May; 
Farm: $1.40; 
Cooperative: $1.51; 
Wholesale: Whole: $2.14; 
Wholesale: 2%: $1.93; 
Wholesale: 1%: $1.70; 
Wholesale: Skim: $1.74; 
Retail: Whole: $2.59; 
Retail: 2%: $2.51; 
Retail: 1%: $2.61; 
Retail: Skim: $2.28.

Year: 2001; 
Month: June; 
Farm: $1.46; 
Cooperative: $1.57; 
Wholesale: Whole: $2.20; 
Wholesale: 2%: $2.00; 
Wholesale: 1%: $1.76; 
Wholesale: Skim: $1.81; 
Retail: Whole: $2.65; 
Retail: 2%: $2.56; 
Retail: 1%: $2.58; 
Retail: Skim: $2.34.

Year: 2001; 
Month: July; 
Farm: $1.49; 
Cooperative: $1.60; 
Wholesale: Whole: $2.23; 
Wholesale: 2%: $2.02; 
Wholesale: 1%: $1.79; 
Wholesale: Skim: $1.83; 
Retail: Whole: $2.65; 
Retail: 2%: $2.55; 
Retail: 1%: $2.48; 
Retail: Skim: $2.31.

Year: 2001; 
Month: August; 
Farm: $1.49; 
Cooperative: $1.61; 
Wholesale: Whole: $2.24; 
Wholesale: 2%: $2.03; 
Wholesale: 1%: $1.80; 
Wholesale: Skim: $1.84; 
Retail: Whole: $2.65; 
Retail: 2%: $2.55; 
Retail: 1%: $2.52; 
Retail: Skim: $2.31.

Year: 2001; 
Month: September; 
Farm: $1.51; 
Cooperative: $1.62; 
Wholesale: Whole: $2.25; 
Wholesale: 2%: $2.04; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.85; 
Retail: Whole: $2.60; 
Retail: 2%: $2.53; 
Retail: 1%: $2.49; 
Retail: Skim: $2.31.

Year: 2001; 
Month: October; 
Farm: $1.55; 
Cooperative: $1.65; 
Wholesale: Whole: $2.28; 
Wholesale: 2%: $2.07; 
Wholesale: 1%: $1.82; 
Wholesale: Skim: $1.88; 
Retail: Whole: $2.64; 
Retail: 2%: $2.60; 
Retail: 1%: $2.62; 
Retail: Skim: $2.35.

Year: 2001; 
Month: November; 
Farm: $1.53; 
Cooperative: $1.64; 
Wholesale: Whole: $2.27; 
Wholesale: 2%: $2.06; 
Wholesale: 1%: $1.83; 
Wholesale: Skim: $1.87; 
Retail: Whole: $2.65; 
Retail: 2%: $2.63; 
Retail: 1%: $2.72; 
Retail: Skim: $2.39.

Year: 2001; 
Month: December; 
Farm: $1.22; 
Cooperative: $1.33; 
Wholesale: Whole: $1.96; 
Wholesale: 2%: $1.74; 
Wholesale: 1%: $1.64; 
Wholesale: Skim: $1.56; 
Retail: Whole: $2.64; 
Retail: 2%: $2.65; 
Retail: 1%: $2.64; 
Retail: Skim: $2.40.

Average; 
Farm: $1.40; 
Cooperative: $1.51; 
Wholesale: Whole: $2.14; 
Wholesale: 2%: $1.93; 
Wholesale: 1%: $1.72; 
Wholesale: Skim: $1.74; 
Retail: Whole: $2.61; 
Retail: 2%: $2.54; 
Retail: 1%: $2.56; 
Retail: Skim: $2.31.

Year: 2002; 
Month: January; 
Farm: $1.21; 
Cooperative: $1.32; 
Wholesale: Whole: $1.96; 
Wholesale: 2%: $1.74; 
Wholesale: 1%: $1.64; 
Wholesale: Skim: $1.56; 
Retail: Whole: $2.67; 
Retail: 2%: $2.65; 
Retail: 1%: $2.73; 
Retail: Skim: $2.39.

Year: 2002; 
Month: February; 
Farm: $1.21; 
Cooperative: $1.32; 
Wholesale: Whole: $1.95; 
Wholesale: 2%: $1.74; 
Wholesale: 1%: $1.64; 
Wholesale: Skim: $1.56; 
Retail: Whole: $2.66; 
Retail: 2%: $2.64; 
Retail: 1%: $2.72; 
Retail: Skim: $2.39.

Year: 2002; 
Month: March; 
Farm: $1.18; 
Cooperative: $1.29; 
Wholesale: Whole: $1.92; 
Wholesale: 2%: $1.71; 
Wholesale: 1%: $1.62; 
Wholesale: Skim: $1.53; 
Retail: Whole: $2.64; 
Retail: 2%: $2.63; 
Retail: 1%: $2.72; 
Retail: Skim: $2.34.

Year: 2002; 
Month: April; 
Farm: $1.17; 
Cooperative: $1.28; 
Wholesale: Whole: $1.91; 
Wholesale: 2%: $1.70; 
Wholesale: 1%: $1.61; 
Wholesale: Skim: $1.52; 
Retail: Whole: $2.69; 
Retail: 2%: $2.71; 
Retail: 1%: $2.73; 
Retail: Skim: $2.39.

Year: 2002; 
Month: May; 
Farm: $1.15; 
Cooperative: $1.26; 
Wholesale: Whole: $1.89; 
Wholesale: 2%: $1.68; 
Wholesale: 1%: $1.59; 
Wholesale: Skim: $1.50; 
Retail: Whole: $2.60; 
Retail: 2%: $2.61; 
Retail: 1%: $2.71; 
Retail: Skim: $2.40.

Year: 2002; 
Month: June; 
Farm: $1.13; 
Cooperative: $1.24; 
Wholesale: Whole: $1.87; 
Wholesale: 2%: $1.66; 
Wholesale: 1%: $1.57; 
Wholesale: Skim: $1.48; 
Retail: Whole: $2.59; 
Retail: 2%: $2.54; 
Retail: 1%: $2.71; 
Retail: Skim: $2.34.

Year: 2002; 
Month: July; 
Farm: $1.09; 
Cooperative: $1.21; 
Wholesale: Whole: $1.83; 
Wholesale: 2%: $1.62; 
Wholesale: 1%: $1.53; 
Wholesale: Skim: $1.44; 
Retail: Whole: $2.50; 
Retail: 2%: $2.43; 
Retail: 1%: $2.64; 
Retail: Skim: $2.30.

Year: 2002; 
Month: August; 
Farm: $1.08; 
Cooperative: $1.20; 
Wholesale: Whole: $1.82; 
Wholesale: 2%: $1.62; 
Wholesale: 1%: $1.52; 
Wholesale: Skim: $1.43; 
Retail: Whole: $2.50; 
Retail: 2%: $2.43; 
Retail: 1%: $2.63; 
Retail: Skim: $2.33.

Year: 2002; 
Month: September; 
Farm: $1.08; 
Cooperative: $1.19; 
Wholesale: Whole: $1.82; 
Wholesale: 2%: $1.62; 
Wholesale: 1%: $1.52; 
Wholesale: Skim: $1.43; 
Retail: Whole: $2.52; 
Retail: 2%: $2.51; 
Retail: 1%: $2.70; 
Retail: Skim: $2.30.

Year: 2002; 
Month: October; 
Farm: $1.05; 
Cooperative: $1.17; 
Wholesale: Whole: $1.80; 
Wholesale: 2%: $1.59; 
Wholesale: 1%: $1.49; 
Wholesale: Skim: $1.41; 
Retail: Whole: $2.55; 
Retail: 2%: $2.52; 
Retail: 1%: $2.70; 
Retail: Skim: $2.34.

Year: 2002; 
Month: November; 
Farm: $1.09; 
Cooperative: $1.21; 
Wholesale: Whole: $1.83; 
Wholesale: 2%: $1.62; 
Wholesale: 1%: $1.53; 
Wholesale: Skim: $1.44; 
Retail: Whole: $2.43; 
Retail: 2%: $2.50; 
Retail: 1%: $2.68; 
Retail: Skim: $2.32.

Year: 2002; 
Month: December; 
Farm: $1.09; 
Cooperative: $1.20; 
Wholesale: Whole: $1.82; 
Wholesale: 2%: $1.62; 
Wholesale: 1%: $1.52; 
Wholesale: Skim: $1.43; 
Retail: Whole: $2.49; 
Retail: 2%: $2.49; 
Retail: 1%: $2.64; 
Retail: Skim: $2.30.

Average; 
Farm: $1.13; 
Cooperative: $1.24; 
Wholesale: Whole: $1.87; 
Wholesale: 2%: $1.66; 
Wholesale: 1%: $1.57; 
Wholesale: Skim: $1.48; 
Retail: Whole: $2.57; 
Retail: 2%: $2.56; 
Retail: 1%: $2.69; 
Retail: Skim: $2.35.

Year: 2003; 
Month: January; 
Farm: $1.09; 
Cooperative: $1.20; 
Wholesale: Whole: $1.82; 
Wholesale: 2%: $1.61; 
Wholesale: 1%: $1.52; 
Wholesale: Skim: $1.43; 
Retail: Whole: $2.57; 
Retail: 2%: $2.52; 
Retail: 1%: $2.71; 
Retail: Skim: $2.32.

Year: 2003; 
Month: February; 
Farm: $1.06; 
Cooperative: $1.17; 
Wholesale: Whole: $1.79; 
Wholesale: 2%: $1.58; 
Wholesale: 1%: $1.49; 
Wholesale: Skim: $1.40; 
Retail: Whole: $2.61; 
Retail: 2%: $2.56; 
Retail: 1%: $2.70; 
Retail: Skim: $2.35.

Year: 2003; 
Month: March; 
Farm: $1.03; 
Cooperative: $1.14; 
Wholesale: Whole: $1.77; 
Wholesale: 2%: $1.55; 
Wholesale: 1%: $1.46; 
Wholesale: Skim: $1.38; 
Retail: Whole: $2.56; 
Retail: 2%: $2.50; 
Retail: 1%: $2.65; 
Retail: Skim: $2.34.

Year: 2003; 
Month: April; 
Farm: $1.01; 
Cooperative: $1.12; 
Wholesale: Whole: $1.75; 
Wholesale: 2%: $1.54; 
Wholesale: 1%: $1.44; 
Wholesale: Skim: $1.36; 
Retail: Whole: $2.51; 
Retail: 2%: $2.44; 
Retail: 1%: $2.61; 
Retail: Skim: $2.31.

Year: 2003; 
Month: May; 
Farm: $1.02; 
Cooperative: $1.13; 
Wholesale: Whole: $1.76; 
Wholesale: 2%: $1.55; 
Wholesale: 1%: $1.45; 
Wholesale: Skim: $1.37; 
Retail: Whole: $2.55; 
Retail: 2%: $2.47; 
Retail: 1%: $2.66; 
Retail: Skim: $2.34.

Year: 2003; 
Month: June; 
Farm: $1.02; 
Cooperative: $1.13; 
Wholesale: Whole: $1.76; 
Wholesale: 2%: $1.55; 
Wholesale: 1%: $1.45; 
Wholesale: Skim: $1.37; 
Retail: Whole: $2.54; 
Retail: 2%: $2.45; 
Retail: 1%: $2.64; 
Retail: Skim: $2.31.

Year: 2003; 
Month: July; 
Farm: $1.02; 
Cooperative: $1.14; 
Wholesale: Whole: $1.77; 
Wholesale: 2%: $1.56; 
Wholesale: 1%: $1.46; 
Wholesale: Skim: $1.38; 
Retail: Whole: $2.56; 
Retail: 2%: $2.47; 
Retail: 1%: $2.68; 
Retail: Skim: $2.35.

Year: 2003; 
Month: August; 
Farm: $1.12; 
Cooperative: $1.24; 
Wholesale: Whole: $1.85; 
Wholesale: 2%: $1.64; 
Wholesale: 1%: $1.55; 
Wholesale: Skim: $1.46; 
Retail: Whole: $2.58; 
Retail: 2%: $2.50; 
Retail: 1%: $2.71; 
Retail: Skim: $2.35.

Year: 2003; 
Month: September; 
Farm: $1.36; 
Cooperative: $1.47; 
Wholesale: Whole: $2.03; 
Wholesale: 2%: $1.81; 
Wholesale: 1%: $1.72; 
Wholesale: Skim: $1.63; 
Retail: Whole: $2.80; 
Retail: 2%: $2.69; 
Retail: 1%: $2.97; 
Retail: Skim: $2.53.

Year: 2003; 
Month: October; 
Farm: $1.41; 
Cooperative: $1.52; 
Wholesale: Whole: $2.13; 
Wholesale: 2%: $1.92; 
Wholesale: 1%: $1.82; 
Wholesale: Skim: $1.73; 
Retail: Whole: $2.87; 
Retail: 2%: $2.73; 
Retail: 1%: $2.99; 
Retail: Skim: $2.55.

Year: 2003; 
Month: November; 
Farm: $1.42; 
Cooperative: $1.53; 
Wholesale: Whole: $2.15; 
Wholesale: 2%: $1.94; 
Wholesale: 1%: $1.84; 
Wholesale: Skim: $1.75; 
Retail: Whole: $2.81; 
Retail: 2%: $2.70; 
Retail: 1%: $2.93; 
Retail: Skim: $2.45.

Year: 2003; 
Month: December; 
Farm: $1.37; 
Cooperative: $1.49; 
Wholesale: Whole: $2.14; 
Wholesale: 2%: $1.96; 
Wholesale: 1%: $1.82; 
Wholesale: Skim: $1.72; 
Retail: Whole: $2.73; 
Retail: 2%: $2.62; 
Retail: 1%: $2.72; 
Retail: Skim: $2.36.

Average; 
Farm: $1.16; 
Cooperative: $1.27; 
Wholesale: Whole: $1.89; 
Wholesale: 2%: $1.68; 
Wholesale: 1%: $1.59; 
Wholesale: Skim: $1.50; 
Retail: Whole: $2.64; 
Retail: 2%: $2.55; 
Retail: 1%: $2.75; 
Retail: Skim: $2.38.

Year: 2004; 
Month: January; 
Farm: $1.17; 
Cooperative: $1.31; 
Wholesale: Whole: $2.10; 
Wholesale: 2%: $1.91; 
Wholesale: 1%: $1.78; 
Wholesale: Skim: $1.68; 
Retail: Whole: $2.72; 
Retail: 2%: $2.65; 
Retail: 1%: $2.70; 
Retail: Skim: $2.34.

Year: 2004; 
Month: February; 
Farm: $1.15; 
Cooperative: $1.29; 
Wholesale: Whole: $2.07; 
Wholesale: 2%: $1.89; 
Wholesale: 1%: $1.75; 
Wholesale: Skim: $1.65; 
Retail: Whole: $2.69; 
Retail: 2%: $2.55; 
Retail: 1%: $2.58; 
Retail: Skim: $2.20.

Year: 2004; 
Month: March; 
Farm: $1.18; 
Cooperative: $1.32; 
Wholesale: Whole: $2.07; 
Wholesale: 2%: $1.89; 
Wholesale: 1%: $1.75; 
Wholesale: Skim: $1.64; 
Retail: Whole: $2.80; 
Retail: 2%: $2.69; 
Retail: 1%: $2.56; 
Retail: Skim: $2.42.

Year: 2004; 
Month: April; 
Farm: $1.33; 
Cooperative: $1.47; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.04; 
Wholesale: 1%: $1.89; 
Wholesale: Skim: $1.78; 
Retail: Whole: $2.88; 
Retail: 2%: $2.79; 
Retail: 1%: $2.59; 
Retail: Skim: $2.49.

Year: 2004; 
Month: May; 
Farm: $1.85; 
Cooperative: $1.99; 
Wholesale: Whole: $2.66; 
Wholesale: 2%: $2.48; 
Wholesale: 1%: $2.34; 
Wholesale: Skim: $2.23; 
Retail: Whole: $3.00; 
Retail: 2%: $2.90; 
Retail: 1%: $2.87; 
Retail: Skim: $2.64.

Average; 
Farm: $1.34; 
Cooperative: $1.48; 
Wholesale: Whole: $2.22; 
Wholesale: 2%: $2.04; 
Wholesale: 1%: $1.90; 
Wholesale: Skim: $1.80; 
Wholesale: Whole: $2.82; 
Retail: 2%: $2.72; 
Retail: 1%: $2.66; 
Wholesale: Skim: $2.42.

Source: GAO's analysis of price data provided by USDA, the Defense 
Commissary Agency, and Information Resources, Inc.

Note: For the Denver market, the farm price is the USDA-estimated farm 
Class I price for 3.5 percent milkfat content; the cooperative price is 
the announced cooperative Class I price for Denver for 3.5 percent 
milkfat content; the wholesale price is the average of the prices paid 
by the commissaries at Fort Carson, Peterson Air Force Base, Buckley 
Air Force Base, and the U.S. Air Force Academy, adjusted for a 5 
percent markup; and the retail price is the price collected by 
Information Resources, Inc., for the Denver market. Prices may not 
average due to rounding.

[End of table]

Table 17: Prices for a Gallon of Milk in Miami, Florida, October 2000 
through May 2004: 

Year: 2000; 
Month: October; 
Farm: $1.40; 
Cooperative: $1.62; 
Wholesale: Whole: $2.46; 
Wholesale: 2%: $2.46; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.46; 
Retail: Whole: $2.47; 
Retail: 2%: $2.36; 
Retail: 1%: $2.38; 
Retail: Skim: $2.25.

Year: 2000; 
Month: November; 
Farm: $1.39; 
Cooperative: $1.62; 
Wholesale: Whole: $2.47; 
Wholesale: 2%: $2.47; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.47; 
Retail: Whole: $2.47; 
Retail: 2%: $2.31; 
Retail: 1%: $2.34; 
Retail: Skim: $2.25.

Year: 2000; 
Month: December; 
Farm: $1.40; 
Cooperative: $1.62; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.47; 
Retail: 2%: $2.33; 
Retail: 1%: $2.35; 
Retail: Skim: $2.24.

Average; 
Farm: $1.40; 
Cooperative: $1.62; 
Wholesale: Whole: $2.50; 
Wholesale: 2%: $2.50; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.50; 
Retail: Whole: $2.47; 
Retail: 2%: $2.33; 
Retail: 1%: $2.36; 
Retail: Skim: $2.25.

Year: 2001; 
Month: January; 
Farm: $1.56; 
Cooperative: $1.78; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.48; 
Retail: 2%: $2.34; 
Retail: 1%: $2.35; 
Retail: Skim: $2.24.

Year: 2001; 
Month: February; 
Farm: $1.40; 
Cooperative: $1.63; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.47; 
Retail: 2%: $2.32; 
Retail: 1%: $2.32; 
Retail: Skim: $2.25.

Year: 2001; 
Month: March; 
Farm: $1.43; 
Cooperative: $1.66; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.49; 
Retail: 2%: $2.34; 
Retail: 1%: $2.35; 
Retail: Skim: $2.26.

Year: 2001; 
Month: April; 
Farm: $1.51; 
Cooperative: $1.74; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.49; 
Retail: 2%: $2.37; 
Retail: 1%: $2.36; 
Retail: Skim: $2.27.

Year: 2001; 
Month: May; 
Farm: $1.57; 
Cooperative: $1.79; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.48; 
Retail: 2%: $2.37; 
Retail: 1%: $2.39; 
Retail: Skim: $2.28.

Year: 2001; 
Month: June; 
Farm: $1.60; 
Cooperative: $1.83; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.57; 
Retail: 2%: $2.45; 
Retail: 1%: $2.47; 
Retail: Skim: $2.34.

Year: 2001; 
Month: July; 
Farm: $1.65; 
Cooperative: $1.87; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.56; 
Retail: 2%: $2.44; 
Retail: 1%: $2.45; 
Retail: Skim: $2.32.

Year: 2001; 
Month: August; 
Farm: $1.65; 
Cooperative: $1.88; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.58; 
Retail: 2%: $2.45; 
Retail: 1%: $2.47; 
Retail: Skim: $2.34.

Year: 2001; 
Month: September; 
Farm: $1.67; 
Cooperative: $1.89; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.58; 
Retail: 2%: $2.45; 
Retail: 1%: $2.47; 
Retail: Skim: $2.35.

Year: 2001; 
Month: October; 
Farm: $1.70; 
Cooperative: $1.92; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.56; 
Retail: 2%: $2.44; 
Retail: 1%: $2.45; 
Retail: Skim: $2.33.

Year: 2001; 
Month: November; 
Farm: $1.68; 
Cooperative: $1.91; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.56; 
Retail: 2%: $2.44; 
Retail: 1%: $2.45; 
Retail: Skim: $2.34.

Year: 2001; 
Month: December; 
Farm: $1.40; 
Cooperative: $1.62; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.56; 
Retail: 2%: $2.43; 
Retail: 1%: $2.44; 
Retail: Skim: $2.33.

Average; 
Farm: $1.57; 
Cooperative: $1.79; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.53; 
Retail: 2%: $2.40; 
Retail: 1%: $2.41; 
Retail: Skim: $2.30.

Year: 2002; 
Month: January; 
Farm: $1.38; 
Cooperative: $1.62; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.53; 
Retail: 2%: $2.40; 
Retail: 1%: $2.40; 
Retail: Skim: $2.31.

Year: 2002; 
Month: February; 
Farm: $1.38; 
Cooperative: $1.62; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.49; 
Retail: 2%: $2.38; 
Retail: 1%: $2.38; 
Retail: Skim: $2.30.

Year: 2002; 
Month: March; 
Farm: $1.38; 
Cooperative: $1.62; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.49; 
Retail: 2%: $2.38; 
Retail: 1%: $2.39; 
Retail: Skim: $2.30.

Year: 2002; 
Month: April; 
Farm: $1.39; 
Cooperative: $1.62; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.52; 
Retail: 2%: $2.39; 
Retail: 1%: $2.40; 
Retail: Skim: $2.30.

Year: 2002; 
Month: May; 
Farm: $1.39; 
Cooperative: $1.62; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.47; 
Retail: 2%: $2.36; 
Retail: 1%: $2.36; 
Retail: Skim: $2.27.

Year: 2002; 
Month: June; 
Farm: $1.37; 
Cooperative: $1.60; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.48; 
Retail: 2%: $2.36; 
Retail: 1%: $2.39; 
Retail: Skim: $2.28.

Year: 2002; 
Month: July; 
Farm: $1.33; 
Cooperative: $1.57; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.46; 
Retail: 2%: $2.37; 
Retail: 1%: $2.35; 
Retail: Skim: $2.27.

Year: 2002; 
Month: August; 
Farm: $1.32; 
Cooperative: $1.55; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.34; 
Retail: 2%: $2.33; 
Retail: 1%: $2.31; 
Retail: Skim: $2.24.

Year: 2002; 
Month: September; 
Farm: $1.32; 
Cooperative: $1.55; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: N/A; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.37; 
Retail: 2%: $2.29; 
Retail: 1%: $2.27; 
Retail: Skim: $2.22.

Year: 2002; 
Month: October; 
Farm: $1.29; 
Cooperative: $1.52; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $1.86; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.38; 
Retail: 2%: $2.28; 
Retail: 1%: $2.26; 
Retail: Skim: $2.19.

Year: 2002; 
Month: November; 
Farm: $1.32; 
Cooperative: $1.56; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $1.88; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.45; 
Retail: 2%: $2.35; 
Retail: 1%: $2.36; 
Retail: Skim: $2.28.

Year: 2002; 
Month: December; 
Farm: $1.31; 
Cooperative: $1.55; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $1.88; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.49; 
Retail: 2%: $2.38; 
Retail: 1%: $2.39; 
Retail: Skim: $2.30.

Average; 
Farm: $1.35; 
Cooperative: $1.58; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $1.87; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.46; 
Retail: 2%: $2.36; 
Retail: 1%: $2.36; 
Retail: Skim: $2.27.

Year: 2003; 
Month: January; 
Farm: $1.31; 
Cooperative: $1.55; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $1.90; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.50; 
Retail: 2%: $2.38; 
Retail: 1%: $2.39; 
Retail: Skim: $2.30.

Year: 2003; 
Month: February; 
Farm: $1.29; 
Cooperative: $1.52; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $1.90; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.50; 
Retail: 2%: $2.36; 
Retail: 1%: $2.37; 
Retail: Skim: $2.28.

Year: 2003; 
Month: March; 
Farm: $1.26; 
Cooperative: $1.49; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $1.90; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.51; 
Retail: 2%: $2.38; 
Retail: 1%: $2.39; 
Retail: Skim: $2.29.

Year: 2003; 
Month: April; 
Farm: $1.25; 
Cooperative: $1.48; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $1.90; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.49; 
Retail: 2%: $2.38; 
Retail: 1%: $2.40; 
Retail: Skim: $2.30.

Year: 2003; 
Month: May; 
Farm: $1.26; 
Cooperative: $1.49; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $1.90; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.54; 
Retail: 2%: $2.42; 
Retail: 1%: $2.43; 
Retail: Skim: $2.32.

Year: 2003; 
Month: June; 
Farm: $1.26; 
Cooperative: $1.49; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $1.90; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.54; 
Retail: 2%: $2.42; 
Retail: 1%: $2.43; 
Retail: Skim: $2.32.

Year: 2003; 
Month: July; 
Farm: $1.25; 
Cooperative: $1.49; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $1.91; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.51; 
Retail: 2%: $2.40; 
Retail: 1%: $2.41; 
Retail: Skim: $2.31.

Year: 2003; 
Month: August; 
Farm: $1.34; 
Cooperative: $1.57; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $2.08; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.58; 
Retail: 2%: $2.48; 
Retail: 1%: $2.50; 
Retail: Skim: $2.39.

Year: 2003; 
Month: September; 
Farm: $1.53; 
Cooperative: $1.77; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $2.27; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.69; 
Retail: 2%: $2.59; 
Retail: 1%: $2.62; 
Retail: Skim: $2.50.

Year: 2003; 
Month: October; 
Farm: $1.56; 
Cooperative: $1.79; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $2.27; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.71; 
Retail: 2%: $2.61; 
Retail: 1%: $2.62; 
Retail: Skim: $2.51.

Year: 2003; 
Month: November; 
Farm: $1.56; 
Cooperative: $1.79; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $2.27; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.69; 
Retail: 2%: $2.59; 
Retail: 1%: $2.57; 
Retail: Skim: $2.49.

Year: 2003; 
Month: December; 
Farm: $1.55; 
Cooperative: $1.78; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $2.27; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.71; 
Retail: 2%: $2.61; 
Retail: 1%: $2.56; 
Retail: Skim: $2.51.

Average; 
Farm: $1.37; 
Cooperative: $1.60; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $2.04; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.58; 
Retail: 2%: $2.47; 
Retail: 1%: $2.47; 
Retail: Skim: $2.38.

Year: 2004; 
Month: January; 
Farm: $1.41; 
Cooperative: $1.63; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $2.18; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.67; 
Retail: 2%: $2.54; 
Retail: 1%: $2.50; 
Retail: Skim: $2.44.

Year: 2004; 
Month: February; 
Farm: $1.41; 
Cooperative: $1.63; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $2.08; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.63; 
Retail: 2%: $2.49; 
Retail: 1%: $2.46; 
Retail: Skim: $2.41.

Year: 2004; 
Month: March; 
Farm: $1.41; 
Cooperative: $1.63; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $2.08; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.64; 
Retail: 2%: $2.51; 
Retail: 1%: $2.47; 
Retail: Skim: $2.42.

Year: 2004; 
Month: April; 
Farm: $1.55; 
Cooperative: $1.77; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $2.09; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.74; 
Retail: 2%: $2.62; 
Retail: 1%: $2.58; 
Retail: Skim: $2.53.

Year: 2004; 
Month: May; 
Farm: $2.02; 
Cooperative: $2.25; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $2.66; 
Wholesale: Skim: $2.56; 
Retail: Whole: $3.07; 
Retail: 2%: $2.97; 
Retail: 1%: $2.92; 
Retail: Skim: $2.86.

Average; 
Farm: $1.56; 
Cooperative: $1.78; 
Wholesale: Whole: $2.56; 
Wholesale: 2%: $2.56; 
Wholesale: 1%: $2.22; 
Wholesale: Skim: $2.56; 
Retail: Whole: $2.75; 
Retail: 2%: $2.63; 
Retail: 1%: $2.59; 
Wholesale: Skim: $2.53.

Source: GAO's analysis of price data provided by USDA, the Defense 
Commissary Agency, and Information Resources, Inc.

Note: For the Miami market, the farm price is the USDA-estimated farm 
Class I price for 3.5 percent milkfat content; the cooperative price is 
the announced cooperative Class I price for Miami for 3.5 percent 
milkfat content; the wholesale price is the price paid by the 
commissary at the Naval Air Station, Key West, adjusted for a 5 percent 
markup; and the retail price is the price collected by Information 
Resources, Inc., for the Miami market. Prices may not average due to 
rounding. "N/A" indicates data not available.

[End of table]

Table 18: Prices for a Gallon of Milk in Milwaukee, Wisconsin, October 
2000 through May 2004: 

Year: 2000; 
Month: October; 
Farm: $1.20; 
Cooperative: $1.34; 
Wholesale: Whole: $1.87; 
Wholesale: 2%: $1.79; 
Wholesale: 1%: $1.76; 
Wholesale: Skim: $1.72; 
Retail: Whole: $1.97; 
Retail: 2%: $1.93; 
Retail: 1%: $2.01; 
Retail: Skim: $1.87.

Year: 2000; 
Month: November; 
Farm: $1.20; 
Cooperative: $1.33; 
Wholesale: Whole: $1.87; 
Wholesale: 2%: $1.79; 
Wholesale: 1%: $1.76; 
Wholesale: Skim: $1.72; 
Retail: Whole: $1.98; 
Retail: 2%: $1.95; 
Retail: 1%: $2.03; 
Retail: Skim: $1.89.

Year: 2000; 
Month: December; 
Farm: $1.21; 
Cooperative: $1.34; 
Wholesale: Whole: $1.87; 
Wholesale: 2%: $1.79; 
Wholesale: 1%: $1.76; 
Wholesale: Skim: $1.72; 
Retail: Whole: $1.99; 
Retail: 2%: $1.95; 
Retail: 1%: $2.00; 
Retail: Skim: $1.89.

Average; 
Farm: $1.20; 
Cooperative: $1.34; 
Wholesale: Whole: $1.87; 
Wholesale: 2%: $1.79; 
Wholesale: 1%: $1.76; 
Wholesale: Skim: $1.72; 
Retail: Whole: $1.98; 
Retail: 2%: $1.94; 
Retail: 1%: $2.01; 
Retail: Skim: $1.88.

Year: 2001; 
Month: January; 
Farm: $1.39; 
Cooperative: $1.54; 
Wholesale: Whole: $2.24; 
Wholesale: 2%: $2.15; 
Wholesale: 1%: $2.10; 
Wholesale: Skim: $2.04; 
Retail: Whole: $2.12; 
Retail: 2%: $2.09; 
Retail: 1%: $2.15; 
Retail: Skim: $1.99.

Year: 2001; 
Month: February; 
Farm: $1.17; 
Cooperative: $1.32; 
Wholesale: Whole: $2.09; 
Wholesale: 2%: $2.06; 
Wholesale: 1%: $2.05; 
Wholesale: Skim: $2.04; 
Retail: Whole: $2.05; 
Retail: 2%: $2.03; 
Retail: 1%: $2.07; 
Retail: Skim: $1.94.

Year: 2001; 
Month: March; 
Farm: $1.24; 
Cooperative: $1.39; 
Wholesale: Whole: $2.07; 
Wholesale: 2%: $2.05; 
Wholesale: 1%: $2.05; 
Wholesale: Skim: $2.04; 
Retail: Whole: $2.08; 
Retail: 2%: $2.03; 
Retail: 1%: $2.10; 
Retail: Skim: $1.96.

Year: 2001; 
Month: April; 
Farm: $1.31; 
Cooperative: $1.46; 
Wholesale: Whole: $2.14; 
Wholesale: 2%: $2.09; 
Wholesale: 1%: $2.07; 
Wholesale: Skim: $2.04; 
Retail: Whole: $2.10; 
Retail: 2%: $2.05; 
Retail: 1%: $2.10; 
Retail: Skim: $1.96.

Year: 2001; 
Month: May; 
Farm: $1.38; 
Cooperative: $1.53; 
Wholesale: Whole: $2.23; 
Wholesale: 2%: $2.15; 
Wholesale: 1%: $2.12; 
Wholesale: Skim: $2.07; 
Retail: Whole: $2.11; 
Retail: 2%: $2.07; 
Retail: 1%: $2.12; 
Retail: Skim: $1.96.

Year: 2001; 
Month: June; 
Farm: $1.46; 
Cooperative: $1.61; 
Wholesale: Whole: $2.29; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.15; 
Wholesale: Skim: $2.09; 
Retail: Whole: $2.10; 
Retail: 2%: $2.06; 
Retail: 1%: $2.08; 
Retail: Skim: $1.94.

Year: 2001; 
Month: July; 
Farm: $1.49; 
Cooperative: $1.64; 
Wholesale: Whole: $2.32; 
Wholesale: 2%: $2.21; 
Wholesale: 1%: $2.16; 
Wholesale: Skim: $2.09; 
Retail: Whole: $2.14; 
Retail: 2%: $2.07; 
Retail: 1%: $2.12; 
Retail: Skim: $1.96.

Year: 2001; 
Month: August; 
Farm: $1.50; 
Cooperative: $1.65; 
Wholesale: Whole: $2.34; 
Wholesale: 2%: $2.23; 
Wholesale: 1%: $2.17; 
Wholesale: Skim: $2.11; 
Retail: Whole: $2.15; 
Retail: 2%: $2.09; 
Retail: 1%: $2.13; 
Retail: Skim: $1.97.

Year: 2001; 
Month: September; 
Farm: $1.53; 
Cooperative: $1.67; 
Wholesale: Whole: $2.42; 
Wholesale: 2%: $2.31; 
Wholesale: 1%: $2.25; 
Wholesale: Skim: $2.18; 
Retail: Whole: $2.16; 
Retail: 2%: $2.09; 
Retail: 1%: $2.13; 
Retail: Skim: $1.97.

Year: 2001; 
Month: October; 
Farm: $1.55; 
Cooperative: $1.70; 
Wholesale: Whole: $2.44; 
Wholesale: 2%: $2.30; 
Wholesale: 1%: $2.23; 
Wholesale: Skim: $2.15; 
Retail: Whole: $2.18; 
Retail: 2%: $2.12; 
Retail: 1%: $2.16; 
Retail: Skim: $1.99.

Year: 2001; 
Month: November; 
Farm: $1.55; 
Cooperative: $1.69; 
Wholesale: Whole: $2.40; 
Wholesale: 2%: $2.30; 
Wholesale: 1%: $2.26; 
Wholesale: Skim: $2.21; 
Retail: Whole: $2.20; 
Retail: 2%: $2.13; 
Retail: 1%: $2.18; 
Retail: Skim: $2.01.

Year: 2001; 
Month: December; 
Farm: $1.22; 
Cooperative: $1.36; 
Wholesale: Whole: $2.19; 
Wholesale: 2%: $2.05; 
Wholesale: 1%: $2.00; 
Wholesale: Skim: $1.98; 
Retail: Whole: $2.11; 
Retail: 2%: $2.04; 
Retail: 1%: $2.08; 
Retail: Skim: $1.94.

Average; 
Farm: $1.40; 
Cooperative: $1.55; 
Wholesale: Whole: $2.26; 
Wholesale: 2%: $2.17; 
Wholesale: 1%: $2.13; 
Wholesale: Skim: $2.09; 
Retail: Whole: $2.13; 
Retail: 2%: $2.07; 
Retail: 1%: $2.12; 
Retail: Skim: $1.97.

Year: 2002; 
Month: January; 
Farm: $1.20; 
Cooperative: $1.36; 
Wholesale: Whole: $1.97; 
Wholesale: 2%: $1.86; 
Wholesale: 1%: $1.84; 
Wholesale: Skim: $1.84; 
Retail: Whole: $2.07; 
Retail: 2%: $2.04; 
Retail: 1%: $2.04; 
Retail: Skim: $1.91.

Year: 2002; 
Month: February; 
Farm: $1.18; 
Cooperative: $1.35; 
Wholesale: Whole: $1.92; 
Wholesale: 2%: $1.81; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.81; 
Retail: Whole: $2.08; 
Retail: 2%: $2.03; 
Retail: 1%: $2.03; 
Retail: Skim: $1.90.

Year: 2002; 
Month: March; 
Farm: $1.16; 
Cooperative: $1.32; 
Wholesale: Whole: $1.92; 
Wholesale: 2%: $1.81; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.81; 
Retail: Whole: $2.08; 
Retail: 2%: $2.02; 
Retail: 1%: $2.02; 
Retail: Skim: $1.90.

Year: 2002; 
Month: April; 
Farm: $1.16; 
Cooperative: $1.32; 
Wholesale: Whole: $1.92; 
Wholesale: 2%: $1.81; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.81; 
Retail: Whole: $2.08; 
Retail: 2%: $2.05; 
Retail: 1%: $2.06; 
Retail: Skim: $1.92.

Year: 2002; 
Month: May; 
Farm: $1.13; 
Cooperative: $1.30; 
Wholesale: Whole: $1.92; 
Wholesale: 2%: $1.81; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.81; 
Retail: Whole: $2.06; 
Retail: 2%: $2.00; 
Retail: 1%: $2.03; 
Retail: Skim: $1.89.

Year: 2002; 
Month: June; 
Farm: $1.13; 
Cooperative: $1.29; 
Wholesale: Whole: $1.92; 
Wholesale: 2%: $1.81; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.81; 
Retail: Whole: $2.08; 
Retail: 2%: $2.02; 
Retail: 1%: $2.05; 
Retail: Skim: $1.92.

Year: 2002; 
Month: July; 
Farm: $1.09; 
Cooperative: $1.25; 
Wholesale: Whole: $1.92; 
Wholesale: 2%: $1.81; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.81; 
Retail: Whole: $2.08; 
Retail: 2%: $2.00; 
Retail: 1%: $2.04; 
Retail: Skim: $1.90.

Year: 2002; 
Month: August; 
Farm: $1.08; 
Cooperative: $1.25; 
Wholesale: Whole: $1.92; 
Wholesale: 2%: $1.81; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.81; 
Retail: Whole: $2.05; 
Retail: 2%: $2.00; 
Retail: 1%: $2.02; 
Retail: Skim: $1.89.

Year: 2002; 
Month: September; 
Farm: $1.08; 
Cooperative: $1.25; 
Wholesale: Whole: $1.92; 
Wholesale: 2%: $1.81; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.81; 
Retail: Whole: $2.05; 
Retail: 2%: $1.99; 
Retail: 1%: $2.03; 
Retail: Skim: $1.89.

Year: 2002; 
Month: October; 
Farm: $1.05; 
Cooperative: $1.22; 
Wholesale: Whole: $1.92; 
Wholesale: 2%: $1.81; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.81; 
Retail: Whole: $2.04; 
Retail: 2%: $1.98; 
Retail: 1%: $2.02; 
Retail: Skim: $1.88.

Year: 2002; 
Month: November; 
Farm: $1.09; 
Cooperative: $1.26; 
Wholesale: Whole: $1.92; 
Wholesale: 2%: $1.81; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.81; 
Retail: Whole: $2.06; 
Retail: 2%: $1.99; 
Retail: 1%: $2.03; 
Retail: Skim: $1.88.

Year: 2002; 
Month: December; 
Farm: $1.08; 
Cooperative: $1.25; 
Wholesale: Whole: $1.92; 
Wholesale: 2%: $1.81; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.81; 
Retail: Whole: $2.06; 
Retail: 2%: $1.99; 
Retail: 1%: $2.02; 
Retail: Skim: $1.88.

Average; 
Farm: $1.12; 
Cooperative: $1.29; 
Wholesale: Whole: $1.92; 
Wholesale: 2%: $1.81; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.81; 
Retail: Whole: $2.07; 
Retail: 2%: $2.01; 
Retail: 1%: $2.03; 
Retail: Skim: $1.90.

Year: 2003; 
Month: January; 
Farm: $1.09; 
Cooperative: $1.27; 
Wholesale: Whole: $1.92; 
Wholesale: 2%: $1.81; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.81; 
Retail: Whole: $2.06; 
Retail: 2%: $1.98; 
Retail: 1%: $2.01; 
Retail: Skim: $1.87.

Year: 2003; 
Month: February; 
Farm: $1.05; 
Cooperative: $1.22; 
Wholesale: Whole: $1.92; 
Wholesale: 2%: $1.81; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.81; 
Retail: Whole: $2.06; 
Retail: 2%: $1.98; 
Retail: 1%: $1.99; 
Retail: Skim: $1.86.

Year: 2003; 
Month: March; 
Farm: $1.01; 
Cooperative: $1.18; 
Wholesale: Whole: $1.92; 
Wholesale: 2%: $1.81; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.81; 
Retail: Whole: $2.06; 
Retail: 2%: $1.98; 
Retail: 1%: $2.01; 
Retail: Skim: $1.87.

Year: 2003; 
Month: April; 
Farm: $1.00; 
Cooperative: $1.18; 
Wholesale: Whole: $1.92; 
Wholesale: 2%: $1.81; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.81; 
Retail: Whole: $2.06; 
Retail: 2%: $1.98; 
Retail: 1%: $2.00; 
Retail: Skim: $1.87.

Year: 2003; 
Month: May; 
Farm: $1.01; 
Cooperative: $1.18; 
Wholesale: Whole: $1.92; 
Wholesale: 2%: $1.81; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.81; 
Retail: Whole: $2.05; 
Retail: 2%: $1.95; 
Retail: 1%: $1.97; 
Retail: Skim: $1.85.

Year: 2003; 
Month: June; 
Farm: $1.01; 
Cooperative: $1.18; 
Wholesale: Whole: $1.92; 
Wholesale: 2%: $1.81; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.81; 
Retail: Whole: $2.03; 
Retail: 2%: $1.93; 
Retail: 1%: $1.96; 
Retail: Skim: $1.83.

Year: 2003; 
Month: July; 
Farm: $1.01; 
Cooperative: $1.18; 
Wholesale: Whole: $1.92; 
Wholesale: 2%: $1.81; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.81; 
Retail: Whole: $2.04; 
Retail: 2%: $1.94; 
Retail: 1%: $1.98; 
Retail: Skim: $1.84.

Year: 2003; 
Month: August; 
Farm: $1.13; 
Cooperative: $1.31; 
Wholesale: Whole: $1.92; 
Wholesale: 2%: $1.81; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.81; 
Retail: Whole: $2.06; 
Retail: 2%: $2.01; 
Retail: 1%: $2.03; 
Retail: Skim: $1.90.

Year: 2003; 
Month: September; 
Farm: $1.37; 
Cooperative: $1.54; 
Wholesale: Whole: $1.92; 
Wholesale: 2%: $1.81; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.81; 
Retail: Whole: $2.14; 
Retail: 2%: $2.06; 
Retail: 1%: $2.09; 
Retail: Skim: $1.94.

Year: 2003; 
Month: October; 
Farm: $1.39; 
Cooperative: $1.57; 
Wholesale: Whole: $2.16; 
Wholesale: 2%: $2.05; 
Wholesale: 1%: $2.04; 
Wholesale: Skim: $2.04; 
Retail: Whole: $2.15; 
Retail: 2%: $2.07; 
Retail: 1%: $2.11; 
Retail: Skim: $1.96.

Year: 2003; 
Month: November; 
Farm: $1.40; 
Cooperative: $1.58; 
Wholesale: Whole: $2.17; 
Wholesale: 2%: $2.06; 
Wholesale: 1%: $2.05; 
Wholesale: Skim: $2.05; 
Retail: Whole: $2.16; 
Retail: 2%: $2.10; 
Retail: 1%: $2.12; 
Retail: Skim: $1.98.

Year: 2003; 
Month: December; 
Farm: $1.36; 
Cooperative: $1.53; 
Wholesale: Whole: $2.17; 
Wholesale: 2%: $2.06; 
Wholesale: 1%: $2.05; 
Wholesale: Skim: $2.05; 
Retail: Whole: $2.17; 
Retail: 2%: $2.05; 
Retail: 1%: $2.11; 
Retail: Skim: $1.92.

Average; 
Farm: $1.15; 
Cooperative: $1.33; 
Wholesale: Whole: $1.98; 
Wholesale: 2%: $1.87; 
Wholesale: 1%: $1.87; 
Wholesale: Skim: $1.87; 
Retail: Whole: $2.09; 
Retail: 2%: $2.00; 
Retail: 1%: $2.03; 
Retail: Skim: $1.89.

Year: 2004; 
Month: January; 
Farm: $1.18; 
Cooperative: $1.33; 
Wholesale: Whole: $2.17; 
Wholesale: 2%: $2.06; 
Wholesale: 1%: $2.05; 
Wholesale: Skim: $2.05; 
Retail: Whole: $2.16; 
Retail: 2%: $2.07; 
Retail: 1%: $2.04; 
Retail: Skim: $1.91.

Year: 2004; 
Month: February; 
Farm: $1.16; 
Cooperative: $1.32; 
Wholesale: Whole: $2.17; 
Wholesale: 2%: $2.06; 
Wholesale: 1%: $2.05; 
Wholesale: Skim: $2.05; 
Retail: Whole: $2.14; 
Retail: 2%: $2.06; 
Retail: 1%: $2.01; 
Retail: Skim: $1.89.

Year: 2004; 
Month: March; 
Farm: $1.18; 
Cooperative: $1.34; 
Wholesale: Whole: $2.17; 
Wholesale: 2%: $2.06; 
Wholesale: 1%: $2.05; 
Wholesale: Skim: $2.05; 
Retail: Whole: $2.12; 
Retail: 2%: $2.01; 
Retail: 1%: $1.99; 
Retail: Skim: $1.85.

Year: 2004; 
Month: April; 
Farm: $1.37; 
Cooperative: $1.52; 
Wholesale: Whole: $2.17; 
Wholesale: 2%: $2.06; 
Wholesale: 1%: $2.05; 
Wholesale: Skim: $2.05; 
Retail: Whole: $2.17; 
Retail: 2%: $2.08; 
Retail: 1%: $2.03; 
Retail: Skim: $1.88.

Year: 2004; 
Month: May; 
Farm: $2.01; 
Cooperative: $2.17; 
Wholesale: Whole: $2.53; 
Wholesale: 2%: $2.42; 
Wholesale: 1%: $2.28; 
Wholesale: Skim: $2.19; 
Retail: Whole: $2.52; 
Retail: 2%: $2.45; 
Retail: 1%: $2.41; 
Retail: Skim: $2.18.

Average; 
Farm: $1.38; 
Cooperative: $1.54; 
1.54: [Empty]; 
Wholesale: Whole: $2.24; 
Wholesale: 2%: $2.13; 
Wholesale: 1%: $2.10; 
Wholesale: Skim: $2.08; 
2.08: [Empty]; 
Retail: Whole: $2.22; 
Retail: 2%: $2.13; 
Retail: 1%: $2.10; 
Wholesale: Skim: $1.94.

Source: GAO's analysis of price data provided by USDA, the Defense 
Commissary Agency, and Information Resources, Inc.

Note: For the Milwaukee market, the farm price is the USDA-estimated 
farm Class I price for 3.5 percent milkfat content; the cooperative 
price is the announced cooperative Class I price for Milwaukee for 3.5 
percent milkfat content; the wholesale price is the price paid by the 
commissary at the Naval Station Great Lakes, adjusted for a 5 percent 
markup; and the retail price is the price collected by Information 
Resources, Inc., for the Milwaukee market. Prices may not average due 
to rounding.

[End of table]

Table 19: Prices for a Gallon of Milk in Minneapolis, Minnesota, 
October 2000 through May 2004: 

Year: 2000; 
Year: 2000; 
Month: October; 
Farm: $1.16; 
Cooperative: $1.27; 
Wholesale: Whole: $2.07; 
Wholesale: 2%: $2.05; 
Wholesale: 1%: $2.03; 
Wholesale: Skim: $2.01; 
Retail: Whole: $1.84; 
Retail: 2%: $1.74; 
Retail: 1%: $1.86; 
Retail: Skim: $1.68.

Year: 2000; 
Month: November; 
Farm: $1.15; 
Cooperative: $1.26; 
Wholesale: Whole: $2.07; 
Wholesale: 2%: $2.05; 
Wholesale: 1%: $2.03; 
Wholesale: Skim: $2.01; 
Retail: Whole: $1.82; 
Retail: 2%: $1.79; 
Retail: 1%: $1.89; 
Retail: Skim: $1.71.

Year: 2000; 
Month: December; 
Farm: $1.16; 
Cooperative: $1.27; 
Wholesale: Whole: $2.07; 
Wholesale: 2%: $2.05; 
Wholesale: 1%: $2.03; 
Wholesale: Skim: $2.01; 
Retail: Whole: $1.79; 
Retail: 2%: $1.79; 
Retail: 1%: $1.92; 
Retail: Skim: $1.74.

Average; 
Farm: $1.16; 
Cooperative: $1.27; 
Wholesale: Whole: $2.07; 
Wholesale: 2%: $2.05; 
Wholesale: 1%: $2.03; 
Wholesale: Skim: $2.01; 
Retail: Whole: $1.82; 
Retail: 2%: $1.77; 
Retail: 1%: $1.89; 
Retail: Skim: $1.71.

Year: 2001; 
Month: January; 
Farm: $1.35; 
Cooperative: $1.47; 
Wholesale: Whole: $2.24; 
Wholesale: 2%: $2.16; 
Wholesale: 1%: $2.10; 
Wholesale: Skim: $2.04; 
Retail: Whole: $1.78; 
Retail: 2%: $1.73; 
Retail: 1%: $1.85; 
Retail: Skim: $1.68.

Year: 2001; 
Month: February; 
Farm: $1.14; 
Cooperative: $1.27; 
Wholesale: Whole: $2.08; 
Wholesale: 2%: $2.06; 
Wholesale: 1%: $2.06; 
Wholesale: Skim: $2.04; 
Retail: Whole: $1.68; 
Retail: 2%: $1.67; 
Retail: 1%: $1.80; 
Retail: Skim: $1.64.

Year: 2001; 
Month: March; 
Farm: $1.21; 
Cooperative: $1.33; 
Wholesale: Whole: $2.07; 
Wholesale: 2%: $2.05; 
Wholesale: 1%: $2.05; 
Wholesale: Skim: $2.04; 
Retail: Whole: $1.66; 
Retail: 2%: $1.69; 
Retail: 1%: $1.85; 
Retail: Skim: $1.70.

Year: 2001; 
Month: April; 
Farm: $1.28; 
Cooperative: $1.41; 
Wholesale: Whole: $2.14; 
Wholesale: 2%: $2.09; 
Wholesale: 1%: $2.07; 
Wholesale: Skim: $2.04; 
Retail: Whole: $1.67; 
Retail: 2%: $1.72; 
Retail: 1%: $1.86; 
Retail: Skim: $1.76.

Year: 2001; 
Month: May; 
Farm: $1.35; 
Cooperative: $1.48; 
Wholesale: Whole: $2.23; 
Wholesale: 2%: $2.15; 
Wholesale: 1%: $2.12; 
Wholesale: Skim: $2.07; 
Retail: Whole: $1.65; 
Retail: 2%: $1.70; 
Retail: 1%: $1.88; 
Retail: Skim: $1.75.

Year: 2001; 
Month: June; 
Farm: $1.43; 
Cooperative: $1.56; 
Wholesale: Whole: $2.29; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.15; 
Wholesale: Skim: $2.09; 
Retail: Whole: $1.68; 
Retail: 2%: $1.71; 
Retail: 1%: $1.91; 
Retail: Skim: $1.78.

Year: 2001; 
Month: July; 
Farm: $1.46; 
Cooperative: $1.58; 
Wholesale: Whole: $2.32; 
Wholesale: 2%: $2.21; 
Wholesale: 1%: $2.16; 
Wholesale: Skim: $2.09; 
Retail: Whole: $1.68; 
Retail: 2%: $1.73; 
Retail: 1%: $1.94; 
Retail: Skim: $1.80.

Year: 2001; 
Month: August; 
Farm: $1.47; 
Cooperative: $1.59; 
Wholesale: Whole: $2.34; 
Wholesale: 2%: $2.23; 
Wholesale: 1%: $2.18; 
Wholesale: Skim: $2.11; 
Retail: Whole: $1.69; 
Retail: 2%: $1.75; 
Retail: 1%: $1.96; 
Retail: Skim: $1.82.

Year: 2001; 
Month: September; 
Farm: $1.50; 
Cooperative: $1.62; 
Wholesale: Whole: $2.42; 
Wholesale: 2%: $2.30; 
Wholesale: 1%: $2.25; 
Wholesale: Skim: $2.18; 
Retail: Whole: $1.69; 
Retail: 2%: $1.76; 
Retail: 1%: $1.99; 
Retail: Skim: $1.83.

Year: 2001; 
Month: October; 
Farm: $1.53; 
Cooperative: $1.64; 
Wholesale: Whole: $2.44; 
Wholesale: 2%: $2.30; 
Wholesale: 1%: $2.23; 
Wholesale: Skim: $2.15; 
Retail: Whole: $1.69; 
Retail: 2%: $1.74; 
Retail: 1%: $1.99; 
Retail: Skim: $1.82.

Year: 2001; 
Month: November; 
Farm: $1.51; 
Cooperative: $1.64; 
Wholesale: Whole: $2.43; 
Wholesale: 2%: $2.37; 
Wholesale: 1%: $2.34; 
Wholesale: Skim: $2.30; 
Retail: Whole: $1.74; 
Retail: 2%: $1.80; 
Retail: 1%: $2.05; 
Retail: Skim: $1.88.

Year: 2001; 
Month: December; 
Farm: $1.19; 
Cooperative: $1.31; 
Wholesale: Whole: $2.40; 
Wholesale: 2%: $2.37; 
Wholesale: 1%: $2.34; 
Wholesale: Skim: $2.29; 
Retail: Whole: $1.66; 
Retail: 2%: $1.76; 
Retail: 1%: $2.00; 
Retail: Skim: $1.83.

Average; 
Farm: $1.37; 
Cooperative: $1.49; 
Wholesale: Whole: $2.28; 
Wholesale: 2%: $2.21; 
Wholesale: 1%: $2.17; 
Wholesale: Skim: $2.12; 
Retail: Whole: $1.69; 
Retail: 2%: $1.73; 
Retail: 1%: $1.92; 
Retail: Skim: $1.77.

Year: 2002; 
Month: January; 
Farm: $1.17; 
Cooperative: $1.32; 
Wholesale: Whole: $2.40; 
Wholesale: 2%: $2.37; 
Wholesale: 1%: $2.34; 
Wholesale: Skim: $2.29; 
Retail: Whole: $1.68; 
Retail: 2%: $1.74; 
Retail: 1%: $1.99; 
Retail: Skim: $1.81.

Year: 2002; 
Month: February; 
Farm: $1.16; 
Cooperative: $1.31; 
Wholesale: Whole: $2.40; 
Wholesale: 2%: $2.37; 
Wholesale: 1%: $2.34; 
Wholesale: Skim: $2.29; 
Retail: Whole: $1.76; 
Retail: 2%: $1.87; 
Retail: 1%: $2.10; 
Retail: Skim: $1.86.

Year: 2002; 
Month: March; 
Farm: $1.13; 
Cooperative: $1.28; 
Wholesale: Whole: $2.40; 
Wholesale: 2%: $2.38; 
Wholesale: 1%: $2.35; 
Wholesale: Skim: $2.30; 
Retail: Whole: $1.86; 
Retail: 2%: $2.01; 
Retail: 1%: $2.20; 
Retail: Skim: $1.95.

Year: 2002; 
Month: April; 
Farm: $1.13; 
Cooperative: $1.28; 
Wholesale: Whole: $2.40; 
Wholesale: 2%: $2.38; 
Wholesale: 1%: $2.35; 
Wholesale: Skim: $2.30; 
Retail: Whole: $1.85; 
Retail: 2%: $2.00; 
Retail: 1%: $2.19; 
Retail: Skim: $1.94.

Year: 2002; 
Month: May; 
Farm: $1.11; 
Cooperative: $1.26; 
Wholesale: Whole: $2.40; 
Wholesale: 2%: $2.38; 
Wholesale: 1%: $2.35; 
Wholesale: Skim: $2.30; 
Retail: Whole: $1.84; 
Retail: 2%: $1.97; 
Retail: 1%: $2.23; 
Retail: Skim: $1.92.

Year: 2002; 
Month: June; 
Farm: $1.09; 
Cooperative: $1.24; 
Wholesale: Whole: $2.40; 
Wholesale: 2%: $2.38; 
Wholesale: 1%: $2.35; 
Wholesale: Skim: $2.30; 
Retail: Whole: $2.04; 
Retail: 2%: $2.09; 
Retail: 1%: $2.33; 
Retail: Skim: $2.02.

Year: 2002; 
Month: July; 
Farm: $1.05; 
Cooperative: $1.20; 
Wholesale: Whole: $2.40; 
Wholesale: 2%: $2.38; 
Wholesale: 1%: $2.35; 
Wholesale: Skim: $2.30; 
Retail: Whole: $2.06; 
Retail: 2%: $2.10; 
Retail: 1%: $2.33; 
Retail: Skim: $2.02.

Year: 2002; 
Month: August; 
Farm: $1.04; 
Cooperative: $1.19; 
Wholesale: Whole: $2.40; 
Wholesale: 2%: $2.38; 
Wholesale: 1%: $2.35; 
Wholesale: Skim: $2.30; 
Retail: Whole: $2.04; 
Retail: 2%: $2.05; 
Retail: 1%: $2.31; 
Retail: Skim: $1.97.

Year: 2002; 
Month: September; 
Farm: $1.04; 
Cooperative: $1.19; 
Wholesale: Whole: $2.40; 
Wholesale: 2%: $2.38; 
Wholesale: 1%: $2.35; 
Wholesale: Skim: $2.30; 
Retail: Whole: $1.97; 
Retail: 2%: $1.98; 
Retail: 1%: $2.27; 
Retail: Skim: $1.92.

Year: 2002; 
Month: October; 
Farm: $1.02; 
Cooperative: $1.16; 
Wholesale: Whole: $2.40; 
Wholesale: 2%: $2.38; 
Wholesale: 1%: $2.35; 
Wholesale: Skim: $2.30; 
Retail: Whole: $1.78; 
Retail: 2%: $1.85; 
Retail: 1%: $2.14; 
Retail: Skim: $1.83.

Year: 2002; 
Month: November; 
Farm: $1.05; 
Cooperative: $1.20; 
Wholesale: Whole: $2.40; 
Wholesale: 2%: $2.38; 
Wholesale: 1%: $2.35; 
Wholesale: Skim: $2.30; 
Retail: Whole: $1.72; 
Retail: 2%: $1.76; 
Retail: 1%: $2.00; 
Retail: Skim: $1.78.

Year: 2002; 
Month: December; 
Farm: $1.05; 
Cooperative: $1.19; 
Wholesale: Whole: $2.40; 
Wholesale: 2%: $2.38; 
Wholesale: 1%: $2.35; 
Wholesale: Skim: $2.30; 
Retail: Whole: $1.83; 
Retail: 2%: $1.95; 
Retail: 1%: $2.17; 
Retail: Skim: $1.90.

Average; 
Farm: $1.09; 
Cooperative: $1.24; 
Wholesale: Whole: $2.40; 
Wholesale: 2%: $2.38; 
Wholesale: 1%: $2.35; 
Wholesale: Skim: $2.30; 
Retail: Whole: $1.87; 
Retail: 2%: $1.95; 
Retail: 1%: $2.19; 
Retail: Skim: $1.91.

Year: 2003; 
Month: January; 
Farm: $1.07; 
Cooperative: $1.21; 
Wholesale: Whole: $2.40; 
Wholesale: 2%: $2.38; 
Wholesale: 1%: $2.35; 
Wholesale: Skim: $2.30; 
Retail: Whole: $1.87; 
Retail: 2%: $1.96; 
Retail: 1%: $2.18; 
Retail: Skim: $1.92.

Year: 2003; 
Month: February; 
Farm: $1.02; 
Cooperative: $1.16; 
Wholesale: Whole: $2.40; 
Wholesale: 2%: $2.38; 
Wholesale: 1%: $2.35; 
Wholesale: Skim: $2.30; 
Retail: Whole: $1.75; 
Retail: 2%: $1.79; 
Retail: 1%: $2.00; 
Retail: Skim: $1.78.

Year: 2003; 
Month: March; 
Farm: $0.98; 
Cooperative: $1.13; 
Wholesale: Whole: $2.38; 
Wholesale: 2%: $2.35; 
Wholesale: 1%: $2.32; 
Wholesale: Skim: $2.27; 
Retail: Whole: $1.57; 
Retail: 2%: $1.59; 
Retail: 1%: $2.24; 
Retail: Skim: $1.54.

Year: 2003; 
Month: April; 
Farm: $0.97; 
Cooperative: $1.12; 
Wholesale: Whole: $2.35; 
Wholesale: 2%: $2.32; 
Wholesale: 1%: $2.29; 
Wholesale: Skim: $2.24; 
Retail: Whole: $1.52; 
Retail: 2%: $1.53; 
Retail: 1%: $2.50; 
Retail: Skim: $1.46.

Year: 2003; 
Month: May; 
Farm: $0.98; 
Cooperative: $1.12; 
Wholesale: Whole: $2.35; 
Wholesale: 2%: $2.32; 
Wholesale: 1%: $2.29; 
Wholesale: Skim: $2.24; 
Retail: Whole: $1.44; 
Retail: 2%: $1.44; 
Retail: 1%: $2.75; 
Retail: Skim: $1.34.

Year: 2003; 
Month: June; 
Farm: $0.98; 
Cooperative: $1.13; 
Wholesale: Whole: $2.35; 
Wholesale: 2%: $2.32; 
Wholesale: 1%: $2.29; 
Wholesale: Skim: $2.24; 
Retail: Whole: $1.43; 
Retail: 2%: $1.45; 
Retail: 1%: $2.82; 
Retail: Skim: $1.31.

Year: 2003; 
Month: July; 
Farm: $0.98; 
Cooperative: $1.13; 
Wholesale: Whole: $2.35; 
Wholesale: 2%: $2.32; 
Wholesale: 1%: $2.29; 
Wholesale: Skim: $2.24; 
Retail: Whole: $1.45; 
Retail: 2%: $1.43; 
Retail: 1%: $2.72; 
Retail: Skim: $1.32.

Year: 2003; 
Month: August; 
Farm: $1.10; 
Cooperative: $1.25; 
Wholesale: Whole: $2.35; 
Wholesale: 2%: $2.32; 
Wholesale: 1%: $2.29; 
Wholesale: Skim: $2.24; 
Retail: Whole: $1.52; 
Retail: 2%: $1.46; 
Retail: 1%: $2.84; 
Retail: Skim: $1.35.

Year: 2003; 
Month: September; 
Farm: $1.34; 
Cooperative: $1.49; 
Wholesale: Whole: $2.35; 
Wholesale: 2%: $2.32; 
Wholesale: 1%: $2.29; 
Wholesale: Skim: $2.24; 
Retail: Whole: $1.51; 
Retail: 2%: $1.49; 
Retail: 1%: $2.98; 
Retail: Skim: $1.39.

Year: 2003; 
Month: October; 
Farm: $1.37; 
Cooperative: $1.51; 
Wholesale: Whole: $2.41; 
Wholesale: 2%: $2.37; 
Wholesale: 1%: $2.34; 
Wholesale: Skim: $2.27; 
Retail: Whole: $1.53; 
Retail: 2%: $1.55; 
Retail: 1%: $2.81; 
Retail: Skim: $1.48.

Year: 2003; 
Month: November; 
Farm: $1.38; 
Cooperative: $1.53; 
Wholesale: Whole: $2.49; 
Wholesale: 2%: $2.43; 
Wholesale: 1%: $2.38; 
Wholesale: Skim: $2.31; 
Retail: Whole: $1.66; 
Retail: 2%: $1.88; 
Retail: 1%: $2.55; 
Retail: Skim: $1.86.

Year: 2003; 
Month: December; 
Farm: $1.33; 
Cooperative: $1.48; 
Wholesale: Whole: $2.49; 
Wholesale: 2%: $2.43; 
Wholesale: 1%: $2.38; 
Wholesale: Skim: $2.31; 
Retail: Whole: $1.57; 
Retail: 2%: $1.88; 
Retail: 1%: $2.57; 
Retail: Skim: $1.91.

Average; 
Farm: $1.13; 
Cooperative: $1.27; 
Wholesale: Whole: $2.39; 
Wholesale: 2%: $2.36; 
Wholesale: 1%: $2.32; 
Wholesale: Skim: $2.27; 
Retail: Whole: $1.57; 
Retail: 2%: $1.62; 
Retail: 1%: $2.58; 
Retail: Skim: $1.56.

Year: 2004; 
Month: January; 
Farm: $1.15; 
Cooperative: $1.30; 
Wholesale: Whole: $2.49; 
Wholesale: 2%: $2.43; 
Wholesale: 1%: $2.38; 
Wholesale: Skim: $2.31; 
Retail: Whole: $1.65; 
Retail: 2%: $1.94; 
Retail: 1%: $2.57; 
Retail: Skim: $1.94.

Year: 2004; 
Month: February; 
Farm: $1.14; 
Cooperative: $1.29; 
Wholesale: Whole: $2.49; 
Wholesale: 2%: $2.43; 
Wholesale: 1%: $2.38; 
Wholesale: Skim: $2.31; 
Retail: Whole: $1.64; 
Retail: 2%: $1.91; 
Retail: 1%: $2.55; 
Retail: Skim: $1.93.

Year: 2004; 
Month: March; 
Farm: $1.16; 
Cooperative: $1.31; 
Wholesale: Whole: $2.49; 
Wholesale: 2%: $2.43; 
Wholesale: 1%: $2.38; 
Wholesale: Skim: $2.31; 
Retail: Whole: $1.60; 
Retail: 2%: $1.80; 
Retail: 1%: $2.54; 
Retail: Skim: $1.81.

Year: 2004; 
Month: April; 
Farm: $1.35; 
Cooperative: $1.49; 
Wholesale: Whole: $2.49; 
Wholesale: 2%: $2.43; 
Wholesale: 1%: $2.38; 
Wholesale: Skim: $2.31; 
Retail: Whole: $1.52; 
Retail: 2%: $1.78; 
Retail: 1%: $2.52; 
Retail: Skim: $1.63.

Year: 2004; 
Month: May; 
Farm: $1.99; 
Cooperative: $2.14; 
Wholesale: Whole: $2.49; 
Wholesale: 2%: $2.43; 
Wholesale: 1%: $2.38; 
Wholesale: Skim: $2.31; 
Retail: Whole: $2.09; 
Retail: 2%: $2.21; 
Retail: 1%: $2.56; 
Retail: Skim: $2.06.

Year: 2004; 
Average; 
Farm: $1.36; 
Cooperative: $1.51; 
Wholesale: Whole: $2.49; 
Wholesale: 2%: $2.43; 
Wholesale: 1%: $2.38; 
Wholesale: Skim: $2.31; 
Retail: Whole: $1.70; 
Retail: 2%: $1.93; 
Retail: 1%: $2.55; 
Wholesale: Skim: $1.87.

Source: GAO's analysis of price data provided by USDA, the Defense 
Commissary Agency, and Information Resources, Inc.

Note: For the Minneapolis market, the farm price is the USDA-estimated 
farm Class I price for 3.5 percent milkfat content; the cooperative 
price is the announced cooperative Class I price for Minneapolis for 
3.5 percent milkfat content; the wholesale price is the price paid by 
the commissary at Fort McCoy, adjusted for a 5 percent markup; and the 
retail price is the price collected by Information Resources, Inc., for 
the Minneapolis market. Prices may not average due to rounding.

[End of table]

Table 20: Prices for a Gallon of Milk in New Orleans, Louisiana, 
October 2000 through May 2004: 

Year: 2000; 
Month: October; 
Farm: $1.22; 
Cooperative: $1.42; 
Wholesale: Whole: $2.36; 
Wholesale: 2%: $2.25; 
Wholesale: 1%: $2.25; 
Wholesale: Skim: $2.25; 
Retail: Whole: $2.64; 
Retail: 2%: $2.62; 
Retail: 1%: $2.62; 
Retail: Skim: $2.60.

Year: 2000; 
Month: November; 
Farm: $1.22; 
Cooperative: $1.41; 
Wholesale: Whole: $2.32; 
Wholesale: 2%: $2.25; 
Wholesale: 1%: $2.25; 
Wholesale: Skim: $2.25; 
Retail: Whole: $2.59; 
Retail: 2%: $2.60; 
Retail: 1%: $2.54; 
Retail: Skim: $2.56.

Year: 2000; 
Month: December; 
Farm: $1.22; 
Cooperative: $1.42; 
Wholesale: Whole: $2.32; 
Wholesale: 2%: $2.25; 
Wholesale: 1%: $2.25; 
Wholesale: Skim: $2.19; 
Retail: Whole: $2.63; 
Retail: 2%: $2.60; 
Retail: 1%: $2.56; 
Retail: Skim: $2.56.

Average; 
Farm: $1.22; 
Cooperative: $1.42; 
Wholesale: Whole: $2.33; 
Wholesale: 2%: $2.25; 
Wholesale: 1%: $2.25; 
Wholesale: Skim: $2.23; 
Retail: Whole: $2.62; 
Retail: 2%: $2.61; 
Retail: 1%: $2.57; 
Retail: Skim: $2.57.

Year: 2001; 
Month: January; 
Farm: $1.38; 
Cooperative: $1.58; 
Wholesale: Whole: $2.40; 
Wholesale: 2%: $2.32; 
Wholesale: 1%: $2.32; 
Wholesale: Skim: $2.25; 
Retail: Whole: $2.68; 
Retail: 2%: $2.67; 
Retail: 1%: $2.63; 
Retail: Skim: $2.62.

Year: 2001; 
Month: February; 
Farm: $1.23; 
Cooperative: $1.42; 
Wholesale: Whole: $2.34; 
Wholesale: 2%: $2.29; 
Wholesale: 1%: $2.29; 
Wholesale: Skim: $2.19; 
Retail: Whole: $2.59; 
Retail: 2%: $2.58; 
Retail: 1%: $2.56; 
Retail: Skim: $2.58.

Year: 2001; 
Month: March; 
Farm: $1.27; 
Cooperative: $1.46; 
Wholesale: Whole: $2.34; 
Wholesale: 2%: $2.29; 
Wholesale: 1%: $2.29; 
Wholesale: Skim: $2.19; 
Retail: Whole: $2.57; 
Retail: 2%: $2.59; 
Retail: 1%: $2.60; 
Retail: Skim: $2.60.

Year: 2001; 
Month: April; 
Farm: $1.34; 
Cooperative: $1.53; 
Wholesale: Whole: $2.38; 
Wholesale: 2%: $2.32; 
Wholesale: 1%: $2.32; 
Wholesale: Skim: $2.19; 
Retail: Whole: $2.59; 
Retail: 2%: $2.63; 
Retail: 1%: $2.61; 
Retail: Skim: $2.62.

Year: 2001; 
Month: May; 
Farm: $1.38; 
Cooperative: $1.58; 
Wholesale: Whole: $2.42; 
Wholesale: 2%: $2.35; 
Wholesale: 1%: $2.35; 
Wholesale: Skim: $2.25; 
Retail: Whole: $2.57; 
Retail: 2%: $2.62; 
Retail: 1%: $2.58; 
Retail: Skim: $2.58.

Year: 2001; 
Month: June; 
Farm: $1.41; 
Cooperative: $1.62; 
Wholesale: Whole: $2.38; 
Wholesale: 2%: $2.32; 
Wholesale: 1%: $2.32; 
Wholesale: Skim: $2.19; 
Retail: Whole: $2.64; 
Retail: 2%: $2.68; 
Retail: 1%: $2.65; 
Retail: Skim: $2.64.

Year: 2001; 
Month: July; 
Farm: $1.46; 
Cooperative: $1.67; 
Wholesale: Whole: $2.41; 
Wholesale: 2%: $2.35; 
Wholesale: 1%: $2.35; 
Wholesale: Skim: $2.22; 
Retail: Whole: $2.67; 
Retail: 2%: $2.71; 
Retail: 1%: $2.70; 
Retail: Skim: $2.67.

Year: 2001; 
Month: August; 
Farm: $1.47; 
Cooperative: $1.67; 
Wholesale: Whole: $2.44; 
Wholesale: 2%: $2.38; 
Wholesale: 1%: $2.38; 
Wholesale: Skim: $2.25; 
Retail: Whole: $2.70; 
Retail: 2%: $2.74; 
Retail: 1%: $2.70; 
Retail: Skim: $2.68.

Year: 2001; 
Month: September; 
Farm: $1.48; 
Cooperative: $1.69; 
Wholesale: Whole: $2.38; 
Wholesale: 2%: $2.32; 
Wholesale: 1%: $2.32; 
Wholesale: Skim: $2.19; 
Retail: Whole: $2.68; 
Retail: 2%: $2.72; 
Retail: 1%: $2.71; 
Retail: Skim: $2.69.

Year: 2001; 
Month: October; 
Farm: $1.51; 
Cooperative: $1.72; 
Wholesale: Whole: $2.38; 
Wholesale: 2%: $2.32; 
Wholesale: 1%: $2.32; 
Wholesale: Skim: $2.19; 
Retail: Whole: $2.70; 
Retail: 2%: $2.73; 
Retail: 1%: $2.74; 
Retail: Skim: $2.71.

Year: 2001; 
Month: November; 
Farm: $1.50; 
Cooperative: $1.71; 
Wholesale: Whole: $2.38; 
Wholesale: 2%: $2.31; 
Wholesale: 1%: $2.31; 
Wholesale: Skim: $2.19; 
Retail: Whole: $2.75; 
Retail: 2%: $2.78; 
Retail: 1%: $2.79; 
Retail: Skim: $2.74.

Year: 2001; 
Month: December; 
Farm: $1.21; 
Cooperative: $1.42; 
Wholesale: Whole: $2.29; 
Wholesale: 2%: $2.23; 
Wholesale: 1%: $2.23; 
Wholesale: Skim: $2.19; 
Retail: Whole: $2.73; 
Retail: 2%: $2.75; 
Retail: 1%: $2.80; 
Retail: Skim: $2.74.

Average; 
Farm: $1.39; 
Cooperative: $1.59; 
Wholesale: Whole: $2.38; 
Wholesale: 2%: $2.32; 
Wholesale: 1%: $2.32; 
Wholesale: Skim: $2.21; 
Retail: Whole: $2.66; 
Retail: 2%: $2.68; 
Retail: 1%: $2.67; 
Retail: Skim: $2.66.

Year: 2002; 
Month: January; 
Farm: $1.15; 
Cooperative: $1.41; 
Wholesale: Whole: $2.29; 
Wholesale: 2%: $2.23; 
Wholesale: 1%: $2.23; 
Wholesale: Skim: $2.18; 
Retail: Whole: $2.73; 
Retail: 2%: $2.74; 
Retail: 1%: $2.79; 
Retail: Skim: $2.73.

Year: 2002; 
Month: February; 
Farm: $1.15; 
Cooperative: $1.41; 
Wholesale: Whole: $2.27; 
Wholesale: 2%: $2.21; 
Wholesale: 1%: $2.21; 
Wholesale: Skim: $2.15; 
Retail: Whole: $2.74; 
Retail: 2%: $2.74; 
Retail: 1%: $2.77; 
Retail: Skim: $2.71.

Year: 2002; 
Month: March; 
Farm: $1.14; 
Cooperative: $1.41; 
Wholesale: Whole: $2.27; 
Wholesale: 2%: $2.21; 
Wholesale: 1%: $2.21; 
Wholesale: Skim: $2.15; 
Retail: Whole: $2.73; 
Retail: 2%: $2.76; 
Retail: 1%: $2.76; 
Retail: Skim: $2.71.

Year: 2002; 
Month: April; 
Farm: $1.15; 
Cooperative: $1.41; 
Wholesale: Whole: $2.27; 
Wholesale: 2%: $2.21; 
Wholesale: 1%: $2.21; 
Wholesale: Skim: $2.15; 
Retail: Whole: $2.72; 
Retail: 2%: $2.74; 
Retail: 1%: $2.74; 
Retail: Skim: $2.71.

Year: 2002; 
Month: May; 
Farm: $1.15; 
Cooperative: $1.42; 
Wholesale: Whole: $2.25; 
Wholesale: 2%: $2.21; 
Wholesale: 1%: $2.21; 
Wholesale: Skim: $2.17; 
Retail: Whole: $2.71; 
Retail: 2%: $2.72; 
Retail: 1%: $2.73; 
Retail: Skim: $2.69.

Year: 2002; 
Month: June; 
Farm: $1.13; 
Cooperative: $1.40; 
Wholesale: Whole: $2.30; 
Wholesale: 2%: $2.23; 
Wholesale: 1%: $2.23; 
Wholesale: Skim: $2.19; 
Retail: Whole: $2.70; 
Retail: 2%: $2.71; 
Retail: 1%: $2.72; 
Retail: Skim: $2.68.

Year: 2002; 
Month: July; 
Farm: $1.09; 
Cooperative: $1.36; 
Wholesale: Whole: $2.31; 
Wholesale: 2%: $2.23; 
Wholesale: 1%: $2.24; 
Wholesale: Skim: $2.19; 
Retail: Whole: $2.70; 
Retail: 2%: $2.71; 
Retail: 1%: $2.72; 
Retail: Skim: $2.69.

Year: 2002; 
Month: August; 
Farm: $1.08; 
Cooperative: $1.35; 
Wholesale: Whole: $2.31; 
Wholesale: 2%: $2.23; 
Wholesale: 1%: $2.24; 
Wholesale: Skim: $2.19; 
Retail: Whole: $2.71; 
Retail: 2%: $2.70; 
Retail: 1%: $2.73; 
Retail: Skim: $2.69.

Year: 2002; 
Month: September; 
Farm: $1.08; 
Cooperative: $1.35; 
Wholesale: Whole: $2.31; 
Wholesale: 2%: $2.23; 
Wholesale: 1%: $2.24; 
Wholesale: Skim: $2.19; 
Retail: Whole: $2.64; 
Retail: 2%: $2.64; 
Retail: 1%: $2.67; 
Retail: Skim: $2.64.

Year: 2002; 
Month: October; 
Farm: $1.07; 
Cooperative: $1.34; 
Wholesale: Whole: $2.30; 
Wholesale: 2%: $2.23; 
Wholesale: 1%: $2.24; 
Wholesale: Skim: $2.18; 
Retail: Whole: $2.63; 
Retail: 2%: $2.65; 
Retail: 1%: $2.64; 
Retail: Skim: $2.63.

Year: 2002; 
Month: November; 
Farm: $1.10; 
Cooperative: $1.36; 
Wholesale: Whole: $2.27; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.22; 
Wholesale: Skim: $2.16; 
Retail: Whole: $2.61; 
Retail: 2%: $2.65; 
Retail: 1%: $2.60; 
Retail: Skim: $2.62.

Year: 2002; 
Month: December; 
Farm: $1.09; 
Cooperative: $1.35; 
Wholesale: Whole: $2.27; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.22; 
Wholesale: Skim: $2.16; 
Retail: Whole: $2.61; 
Retail: 2%: $2.63; 
Retail: 1%: $2.63; 
Retail: Skim: $2.64.

Average; 
Farm: $1.12; 
Cooperative: $1.38; 
Wholesale: Whole: $2.29; 
Wholesale: 2%: $2.22; 
Wholesale: 1%: $2.23; 
Wholesale: Skim: $2.17; 
Retail: Whole: $2.69; 
Retail: 2%: $2.70; 
Retail: 1%: $2.71; 
Retail: Skim: $2.68.

Year: 2003; 
Month: January; 
Farm: $1.06; 
Cooperative: $1.36; 
Wholesale: Whole: $2.27; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.22; 
Wholesale: Skim: $2.16; 
Retail: Whole: $2.60; 
Retail: 2%: $2.62; 
Retail: 1%: $2.61; 
Retail: Skim: $2.60.

Year: 2003; 
Month: February; 
Farm: $1.06; 
Cooperative: $1.36; 
Wholesale: Whole: $2.27; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.22; 
Wholesale: Skim: $2.16; 
Retail: Whole: $2.56; 
Retail: 2%: $2.60; 
Retail: 1%: $2.61; 
Retail: Skim: $2.60.

Year: 2003; 
Month: March; 
Farm: $1.02; 
Cooperative: $1.32; 
Wholesale: Whole: $2.27; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.22; 
Wholesale: Skim: $2.16; 
Retail: Whole: $2.56; 
Retail: 2%: $2.58; 
Retail: 1%: $2.60; 
Retail: Skim: $2.60.

Year: 2003; 
Month: April; 
Farm: $1.01; 
Cooperative: $1.31; 
Wholesale: Whole: $2.27; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.22; 
Wholesale: Skim: $2.16; 
Retail: Whole: $2.56; 
Retail: 2%: $2.59; 
Retail: 1%: $2.62; 
Retail: Skim: $2.60.

Year: 2003; 
Month: May; 
Farm: $1.01; 
Cooperative: $1.31; 
Wholesale: Whole: $2.27; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.22; 
Wholesale: Skim: $2.16; 
Retail: Whole: $2.57; 
Retail: 2%: $2.61; 
Retail: 1%: $2.64; 
Retail: Skim: $2.61.

Year: 2003; 
Month: June; 
Farm: $1.02; 
Cooperative: $1.31; 
Wholesale: Whole: $2.27; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.22; 
Wholesale: Skim: $2.16; 
Retail: Whole: $2.64; 
Retail: 2%: $2.67; 
Retail: 1%: $2.70; 
Retail: Skim: $2.64.

Year: 2003; 
Month: July; 
Farm: $1.01; 
Cooperative: $1.32; 
Wholesale: Whole: $2.28; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $2.22; 
Wholesale: Skim: $2.16; 
Retail: Whole: $2.58; 
Retail: 2%: $2.62; 
Retail: 1%: $2.66; 
Retail: Skim: $2.62.

Year: 2003; 
Month: August; 
Farm: $1.09; 
Cooperative: $1.39; 
Wholesale: Whole: $2.32; 
Wholesale: 2%: $2.25; 
Wholesale: 1%: $2.24; 
Wholesale: Skim: $2.19; 
Retail: Whole: $2.62; 
Retail: 2%: $2.68; 
Retail: 1%: $2.74; 
Retail: Skim: $2.67.

Year: 2003; 
Month: September; 
Farm: $1.28; 
Cooperative: $1.59; 
Wholesale: Whole: $2.38; 
Wholesale: 2%: $2.32; 
Wholesale: 1%: $2.31; 
Wholesale: Skim: $2.22; 
Retail: Whole: $2.72; 
Retail: 2%: $2.80; 
Retail: 1%: $2.89; 
Retail: Skim: $2.80.

Year: 2003; 
Month: October; 
Farm: $1.31; 
Cooperative: $1.61; 
Wholesale: Whole: $2.44; 
Wholesale: 2%: $2.38; 
Wholesale: 1%: $2.37; 
Wholesale: Skim: $2.25; 
Retail: Whole: $2.75; 
Retail: 2%: $2.81; 
Retail: 1%: $2.86; 
Retail: Skim: $2.80.

Year: 2003; 
Month: November; 
Farm: $1.31; 
Cooperative: $1.61; 
Wholesale: Whole: $2.34; 
Wholesale: 2%: $2.25; 
Wholesale: 1%: $2.24; 
Wholesale: Skim: $2.10; 
Retail: Whole: $2.74; 
Retail: 2%: $2.79; 
Retail: 1%: $2.83; 
Retail: Skim: $2.79.

Year: 2003; 
Month: December; 
Farm: $1.29; 
Cooperative: $1.60; 
Wholesale: Whole: $2.25; 
Wholesale: 2%: $2.16; 
Wholesale: 1%: $2.14; 
Wholesale: Skim: $1.97; 
Retail: Whole: $2.76; 
Retail: 2%: $2.81; 
Retail: 1%: $2.82; 
Retail: Skim: $2.78.

Average; 
Farm: $1.12; 
Cooperative: $1.42; 
Wholesale: Whole: $2.30; 
Wholesale: 2%: $2.22; 
Wholesale: 1%: $2.24; 
Wholesale: Skim: $2.15; 
Retail: Whole: $2.64; 
Retail: 2%: $2.68; 
Retail: 1%: $2.72; 
Retail: Skim: $2.68.

Year: 2004; 
Month: January; 
Farm: $1.15; 
Cooperative: $1.45; 
Wholesale: Whole: $2.20; 
Wholesale: 2%: $2.13; 
Wholesale: 1%: $2.11; 
Wholesale: Skim: $1.91; 
Retail: Whole: $2.75; 
Retail: 2%: $2.78; 
Retail: 1%: $2.79; 
Retail: Skim: $2.75.

Year: 2004; 
Month: February; 
Farm: $1.15; 
Cooperative: $1.45; 
Wholesale: Whole: $2.14; 
Wholesale: 2%: $2.08; 
Wholesale: 1%: $2.05; 
Wholesale: Skim: $1.85; 
Retail: Whole: $2.71; 
Retail: 2%: $2.74; 
Retail: 1%: $2.74; 
Retail: Skim: $2.70.

Year: 2004; 
Month: March; 
Farm: $1.15; 
Cooperative: $1.45; 
Wholesale: Whole: $2.14; 
Wholesale: 2%: $2.08; 
Wholesale: 1%: $2.05; 
Wholesale: Skim: $1.85; 
Retail: Whole: $2.70; 
Retail: 2%: $2.74; 
Retail: 1%: $2.75; 
Retail: Skim: $2.70.

Year: 2004; 
Month: April; 
Farm: $1.31; 
Cooperative: $1.60; 
Wholesale: Whole: $2.18; 
Wholesale: 2%: $2.11; 
Wholesale: 1%: $2.07; 
Wholesale: Skim: $1.86; 
Retail: Whole: $2.80; 
Retail: 2%: $2.85; 
Retail: 1%: $2.88; 
Retail: Skim: $2.80.

Year: 2004; 
Month: May; 
Farm: $1.78; 
Cooperative: $2.08; 
Wholesale: Whole: $2.44; 
Wholesale: 2%: $2.33; 
Wholesale: 1%: $2.27; 
Wholesale: Skim: $2.04; 
Retail: Whole: $3.18; 
Retail: 2%: $3.25; 
Retail: 1%: $3.28; 
Retail: Skim: $3.18.

Average; 
Farm: $1.31; 
Cooperative: $1.61; 
Wholesale: Whole: $2.22; 
Wholesale: 2%: $2.15; 
Wholesale: 1%: $2.11; 
Wholesale: Skim: $1.90; 
Retail: Whole: $2.83; 
Retail: 2%: $2.87; 
Retail: 1%: $2.89; 
Wholesale: Skim: $2.83.

Source: GAO's analysis of price data provided by USDA, the Defense 
Commissary Agency, and Information Resources, Inc.

Note: For the New Orleans market, the farm price is the USDA-estimated 
farm Class I price for 3.5 percent milkfat content; the cooperative 
price is the announced cooperative Class I price for New Orleans for 
3.5 percent milkfat content; the wholesale price is the average of the 
prices paid by the Naval Support Activities, New Orleans; the Naval 
Construction Battalion Center, Gulfport; and Keesler Air Force Base 
commissaries, adjusted for a 5 percent markup; and the retail price is 
the price collected by Information Resources, Inc., for the New Orleans 
market. Prices may not average due to rounding.

[End of table]

Table 21: Prices for a Gallon of Milk in Phoenix, Arizona, October 2000 
through May 2004: 

Year: 2000; 
Month: October; 
Farm: $1.17; 
Cooperative: $1.24; 
Wholesale: Whole: $1.97; 
Wholesale: 2%: $1.83; 
Wholesale: 1%: $1.73; 
Wholesale: Skim: $1.63; 
Retail: Whole: $2.25; 
Retail: 2%: $2.27; 
Retail: 1%: $2.44; 
Retail: Skim: $2.16.

Year: 2000; 
Month: November; 
Farm: $1.16; 
Cooperative: $1.23; 
Wholesale: Whole: $1.98; 
Wholesale: 2%: $1.83; 
Wholesale: 1%: $1.74; 
Wholesale: Skim: $1.63; 
Retail: Whole: $2.20; 
Retail: 2%: $2.17; 
Retail: 1%: $2.39; 
Retail: Skim: $2.10.

Year: 2000; 
Month: December; 
Farm: $1.19; 
Cooperative: $1.26; 
Wholesale: Whole: $1.98; 
Wholesale: 2%: $1.83; 
Wholesale: 1%: $1.74; 
Wholesale: Skim: $1.63; 
Retail: Whole: $2.16; 
Retail: 2%: $1.82; 
Retail: 1%: $2.29; 
Retail: Skim: $1.91.

Average; 
Farm: $1.17; 
Cooperative: $1.24; 
Wholesale: Whole: $1.98; 
Wholesale: 2%: $1.83; 
Wholesale: 1%: $1.74; 
Wholesale: Skim: $1.63; 
Retail: Whole: $2.20; 
Retail: 2%: $2.09; 
Retail: 1%: $2.37; 
Retail: Skim: $2.06.

Year: 2001; 
Month: January; 
Farm: $1.35; 
Cooperative: $1.42; 
Wholesale: Whole: $1.99; 
Wholesale: 2%: $1.84; 
Wholesale: 1%: $1.74; 
Wholesale: Skim: $1.62; 
Retail: Whole: $2.60; 
Retail: 2%: $2.58; 
Retail: 1%: $2.60; 
Retail: Skim: $2.49.

Year: 2001; 
Month: February; 
Farm: $1.17; 
Cooperative: $1.24; 
Wholesale: Whole: $2.04; 
Wholesale: 2%: $1.89; 
Wholesale: 1%: $1.76; 
Wholesale: Skim: $1.64; 
Retail: Whole: $2.70; 
Retail: 2%: $2.59; 
Retail: 1%: $2.59; 
Retail: Skim: $2.50.

Year: 2001; 
Month: March; 
Farm: $1.23; 
Cooperative: $1.31; 
Wholesale: Whole: $2.15; 
Wholesale: 2%: $1.97; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.66; 
Retail: Whole: $2.48; 
Retail: 2%: $2.44; 
Retail: 1%: $2.47; 
Retail: Skim: $2.37.

Year: 2001; 
Month: April; 
Farm: $1.30; 
Cooperative: $1.37; 
Wholesale: Whole: $2.18; 
Wholesale: 2%: $1.99; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.66; 
Retail: Whole: $2.62; 
Retail: 2%: $2.56; 
Retail: 1%: $2.57; 
Retail: Skim: $2.46.

Year: 2001; 
Month: May; 
Farm: $1.37; 
Cooperative: $1.44; 
Wholesale: Whole: $2.08; 
Wholesale: 2%: $1.96; 
Wholesale: 1%: $1.80; 
Wholesale: Skim: $1.64; 
Retail: Whole: $2.46; 
Retail: 2%: $2.38; 
Retail: 1%: $2.43; 
Retail: Skim: $2.27.

Year: 2001; 
Month: June; 
Farm: $1.43; 
Cooperative: $1.51; 
Wholesale: Whole: $2.04; 
Wholesale: 2%: $1.85; 
Wholesale: 1%: $1.72; 
Wholesale: Skim: $1.60; 
Retail: Whole: $2.28; 
Retail: 2%: $2.35; 
Retail: 1%: $2.46; 
Retail: Skim: $2.26.

Year: 2001; 
Month: July; 
Farm: $1.46; 
Cooperative: $1.54; 
Wholesale: Whole: $2.04; 
Wholesale: 2%: $1.85; 
Wholesale: 1%: $1.72; 
Wholesale: Skim: $1.60; 
Retail: Whole: $2.38; 
Retail: 2%: $2.44; 
Retail: 1%: $2.49; 
Retail: Skim: $2.34.

Year: 2001; 
Month: August; 
Farm: $1.47; 
Cooperative: $1.54; 
Wholesale: Whole: $2.05; 
Wholesale: 2%: $1.86; 
Wholesale: 1%: $1.72; 
Wholesale: Skim: $1.60; 
Retail: Whole: $2.20; 
Retail: 2%: $2.23; 
Retail: 1%: $2.31; 
Retail: Skim: $2.20.

Year: 2001; 
Month: September; 
Farm: $1.48; 
Cooperative: $1.56; 
Wholesale: Whole: $2.07; 
Wholesale: 2%: $1.89; 
Wholesale: 1%: $1.74; 
Wholesale: Skim: $1.62; 
Retail: Whole: $2.27; 
Retail: 2%: $2.31; 
Retail: 1%: $2.38; 
Retail: Skim: $2.27.

Year: 2001; 
Month: October; 
Farm: $1.52; 
Cooperative: $1.59; 
Wholesale: Whole: $2.10; 
Wholesale: 2%: $1.92; 
Wholesale: 1%: $1.74; 
Wholesale: Skim: $1.61; 
Retail: Whole: $2.41; 
Retail: 2%: $2.47; 
Retail: 1%: $2.53; 
Retail: Skim: $2.39.

Year: 2001; 
Month: November; 
Farm: $1.50; 
Cooperative: $1.57; 
Wholesale: Whole: $2.11; 
Wholesale: 2%: $1.92; 
Wholesale: 1%: $1.74; 
Wholesale: Skim: $1.60; 
Retail: Whole: $2.08; 
Retail: 2%: $2.08; 
Retail: 1%: $2.20; 
Retail: Skim: $2.06.

Year: 2001; 
Month: December; 
Farm: $1.18; 
Cooperative: $1.25; 
Wholesale: Whole: $2.11; 
Wholesale: 2%: $1.97; 
Wholesale: 1%: $1.85; 
Wholesale: Skim: $1.76; 
Retail: Whole: $2.47; 
Retail: 2%: $2.56; 
Retail: 1%: $2.54; 
Retail: Skim: $2.40.

Average; 
Farm: $1.37; 
Cooperative: $1.45; 
Wholesale: Whole: $2.08; 
Wholesale: 2%: $1.91; 
Wholesale: 1%: $1.76; 
Wholesale: Skim: $1.63; 
Retail: Whole: $2.41; 
Retail: 2%: $2.42; 
Retail: 1%: $2.46; 
Retail: Skim: $2.33.

Year: 2002; 
Month: January; 
Farm: $1.18; 
Cooperative: $1.25; 
Wholesale: Whole: $2.07; 
Wholesale: 2%: $1.91; 
Wholesale: 1%: $1.79; 
Wholesale: Skim: $1.70; 
Retail: Whole: $2.60; 
Retail: 2%: $2.66; 
Retail: 1%: $2.66; 
Retail: Skim: $2.51.

Year: 2002; 
Month: February; 
Farm: $1.17; 
Cooperative: $1.25; 
Wholesale: Whole: $2.09; 
Wholesale: 2%: $1.88; 
Wholesale: 1%: $1.78; 
Wholesale: Skim: $1.69; 
Retail: Whole: $2.52; 
Retail: 2%: $2.52; 
Retail: 1%: $2.58; 
Retail: Skim: $2.51.

Year: 2002; 
Month: March; 
Farm: $1.14; 
Cooperative: $1.22; 
Wholesale: Whole: $2.09; 
Wholesale: 2%: $1.88; 
Wholesale: 1%: $1.78; 
Wholesale: Skim: $1.69; 
Retail: Whole: $2.73; 
Retail: 2%: $2.73; 
Retail: 1%: $2.70; 
Retail: Skim: $2.65.

Year: 2002; 
Month: April; 
Farm: $1.13; 
Cooperative: $1.20; 
Wholesale: Whole: $2.06; 
Wholesale: 2%: $1.88; 
Wholesale: 1%: $1.78; 
Wholesale: Skim: $1.69; 
Retail: Whole: $2.53; 
Retail: 2%: $2.64; 
Retail: 1%: $2.64; 
Retail: Skim: $2.50.

Year: 2002; 
Month: May; 
Farm: $1.11; 
Cooperative: $1.19; 
Wholesale: Whole: $1.97; 
Wholesale: 2%: $1.88; 
Wholesale: 1%: $1.78; 
Wholesale: Skim: $1.69; 
Retail: Whole: $2.71; 
Retail: 2%: $2.73; 
Retail: 1%: $2.72; 
Retail: Skim: $2.69.

Year: 2002; 
Month: June; 
Farm: $1.09; 
Cooperative: $1.17; 
Wholesale: Whole: $1.97; 
Wholesale: 2%: $1.88; 
Wholesale: 1%: $1.78; 
Wholesale: Skim: $1.69; 
Retail: Whole: $2.58; 
Retail: 2%: $2.58; 
Retail: 1%: $2.66; 
Retail: Skim: $2.55.

Year: 2002; 
Month: July; 
Farm: $1.06; 
Cooperative: $1.13; 
Wholesale: Whole: $1.97; 
Wholesale: 2%: $1.88; 
Wholesale: 1%: $1.78; 
Wholesale: Skim: $1.69; 
Retail: Whole: $2.68; 
Retail: 2%: $2.73; 
Retail: 1%: $2.78; 
Retail: Skim: $2.65.

Year: 2002; 
Month: August; 
Farm: $1.04; 
Cooperative: $1.12; 
Wholesale: Whole: $1.97; 
Wholesale: 2%: $1.88; 
Wholesale: 1%: $1.78; 
Wholesale: Skim: $1.69; 
Retail: Whole: $2.46; 
Retail: 2%: $2.51; 
Retail: 1%: $2.75; 
Retail: Skim: $2.38.

Year: 2002; 
Month: September; 
Farm: $1.03; 
Cooperative: $1.12; 
Wholesale: Whole: $1.97; 
Wholesale: 2%: $1.88; 
Wholesale: 1%: $1.78; 
Wholesale: Skim: $1.69; 
Retail: Whole: $2.36; 
Retail: 2%: $2.25; 
Retail: 1%: $2.37; 
Retail: Skim: $2.28.

Year: 2002; 
Month: October; 
Farm: $1.00; 
Cooperative: $1.09; 
Wholesale: Whole: $1.97; 
Wholesale: 2%: $1.88; 
Wholesale: 1%: $1.78; 
Wholesale: Skim: $1.69; 
Retail: Whole: $2.63; 
Retail: 2%: $2.58; 
Retail: 1%: $2.63; 
Retail: Skim: $2.60.

Year: 2002; 
Month: November; 
Farm: $1.05; 
Cooperative: $1.13; 
Wholesale: Whole: $1.97; 
Wholesale: 2%: $1.88; 
Wholesale: 1%: $1.78; 
Wholesale: Skim: $1.69; 
Retail: Whole: $2.48; 
Retail: 2%: $2.57; 
Retail: 1%: $2.60; 
Retail: Skim: $2.51.

Year: 2002; 
Month: December; 
Farm: $1.04; 
Cooperative: $1.12; 
Wholesale: Whole: $1.98; 
Wholesale: 2%: $1.90; 
Wholesale: 1%: $1.80; 
Wholesale: Skim: $1.71; 
Retail: Whole: $2.52; 
Retail: 2%: $2.59; 
Retail: 1%: $2.62; 
Retail: Skim: $2.60.

Average; 
Farm: $1.09; 
Cooperative: $1.17; 
Wholesale: Whole: $2.01; 
Wholesale: 2%: $1.88; 
Wholesale: 1%: $1.78; 
Wholesale: Skim: $1.69; 
Retail: Whole: $2.57; 
Retail: 2%: $2.59; 
Retail: 1%: $2.64; 
Retail: Skim: $2.54.

Year: 2003; 
Month: January; 
Farm: $1.04; 
Cooperative: $1.13; 
Wholesale: Whole: $1.99; 
Wholesale: 2%: $1.92; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.73; 
Retail: Whole: $2.49; 
Retail: 2%: $2.58; 
Retail: 1%: $2.61; 
Retail: Skim: $2.55.

Year: 2003; 
Month: February; 
Farm: $1.01; 
Cooperative: $1.10; 
Wholesale: Whole: $1.99; 
Wholesale: 2%: $1.92; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.73; 
Retail: Whole: $2.46; 
Retail: 2%: $2.53; 
Retail: 1%: $2.59; 
Retail: Skim: $2.56.

Year: 2003; 
Month: March; 
Farm: $0.98; 
Cooperative: $1.06; 
Wholesale: Whole: $1.99; 
Wholesale: 2%: $1.92; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.73; 
Retail: Whole: $2.43; 
Retail: 2%: $2.43; 
Retail: 1%: $2.52; 
Retail: Skim: $2.48.

Year: 2003; 
Month: April; 
Farm: $0.97; 
Cooperative: $1.05; 
Wholesale: Whole: $1.99; 
Wholesale: 2%: $1.92; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.73; 
Retail: Whole: $2.44; 
Retail: 2%: $2.49; 
Retail: 1%: $2.54; 
Retail: Skim: $2.42.

Year: 2003; 
Month: May; 
Farm: $0.97; 
Cooperative: $1.05; 
Wholesale: Whole: $1.94; 
Wholesale: 2%: $1.88; 
Wholesale: 1%: $1.81; 
Wholesale: Skim: $1.73; 
Retail: Whole: $2.43; 
Retail: 2%: $2.43; 
Retail: 1%: $2.51; 
Retail: Skim: $2.44.

Year: 2003; 
Month: June; 
Farm: $0.98; 
Cooperative: $1.06; 
Wholesale: Whole: $1.89; 
Wholesale: 2%: $1.84; 
Wholesale: 1%: $1.80; 
Wholesale: Skim: $1.73; 
Retail: Whole: $2.51; 
Retail: 2%: $2.55; 
Retail: 1%: $2.59; 
Retail: Skim: $2.52.

Year: 2003; 
Month: July; 
Farm: $0.97; 
Cooperative: $1.06; 
Wholesale: Whole: $1.89; 
Wholesale: 2%: $1.84; 
Wholesale: 1%: $1.80; 
Wholesale: Skim: $1.73; 
Retail: Whole: $2.30; 
Retail: 2%: $2.32; 
Retail: 1%: $2.45; 
Retail: Skim: $2.27.

Year: 2003; 
Month: August; 
Farm: $1.08; 
Cooperative: $1.16; 
Wholesale: Whole: $1.89; 
Wholesale: 2%: $1.84; 
Wholesale: 1%: $1.80; 
Wholesale: Skim: $1.73; 
Retail: Whole: $2.09; 
Retail: 2%: $2.34; 
Retail: 1%: $2.59; 
Retail: Skim: $2.06.

Year: 2003; 
Month: September; 
Farm: $1.31; 
Cooperative: $1.40; 
Wholesale: Whole: $2.08; 
Wholesale: 2%: $1.99; 
Wholesale: 1%: $1.88; 
Wholesale: Skim: $1.79; 
Retail: Whole: $2.44; 
Retail: 2%: $2.45; 
Retail: 1%: $2.63; 
Retail: Skim: $2.45.

Year: 2003; 
Month: October; 
Farm: $1.36; 
Cooperative: $1.45; 
Wholesale: Whole: $2.26; 
Wholesale: 2%: $2.17; 
Wholesale: 1%: $2.06; 
Wholesale: Skim: $1.97; 
Retail: Whole: $2.67; 
Retail: 2%: $2.70; 
Retail: 1%: $2.85; 
Retail: Skim: $2.67.

Year: 2003; 
Month: November; 
Farm: $1.37; 
Cooperative: $1.45; 
Wholesale: Whole: $2.27; 
Wholesale: 2%: $2.18; 
Wholesale: 1%: $2.07; 
Wholesale: Skim: $1.98; 
Retail: Whole: $2.33; 
Retail: 2%: $2.36; 
Retail: 1%: $2.59; 
Retail: Skim: $2.38.

Year: 2003; 
Month: December; 
Farm: $1.33; 
Cooperative: $1.41; 
Wholesale: Whole: $2.27; 
Wholesale: 2%: $2.18; 
Wholesale: 1%: $2.07; 
Wholesale: Skim: $1.98; 
Retail: Whole: $2.13; 
Retail: 2%: $2.16; 
Retail: 1%: $2.33; 
Retail: Skim: $2.14.

Average; 
Farm: $1.11; 
Cooperative: $1.20; 
Wholesale: Whole: $2.04; 
Wholesale: 2%: $1.97; 
Wholesale: 1%: $1.88; 
Wholesale: Skim: $1.80; 
Retail: Whole: $2.39; 
Retail: 2%: $2.45; 
Retail: 1%: $2.57; 
Retail: Skim: $2.41.

Year: 2004; 
Month: January; 
Farm: $1.15; 
Cooperative: $1.24; 
Wholesale: Whole: $2.27; 
Wholesale: 2%: $2.18; 
Wholesale: 1%: $2.07; 
Wholesale: Skim: $1.98; 
Retail: Whole: $1.97; 
Retail: 2%: $2.11; 
Retail: 1%: $2.27; 
Retail: Skim: $2.02.

Year: 2004; 
Month: February; 
Farm: $1.13; 
Cooperative: $1.21; 
Wholesale: Whole: $2.27; 
Wholesale: 2%: $2.18; 
Wholesale: 1%: $2.07; 
Wholesale: Skim: $1.98; 
Retail: Whole: $2.07; 
Retail: 2%: $2.10; 
Retail: 1%: $2.22; 
Retail: Skim: $2.05.

Year: 2004; 
Month: March; 
Farm: $1.16; 
Cooperative: $1.24; 
Wholesale: Whole: $2.27; 
Wholesale: 2%: $2.18; 
Wholesale: 1%: $2.07; 
Wholesale: Skim: $1.98; 
Retail: Whole: $2.14; 
Retail: 2%: $2.25; 
Retail: 1%: $2.24; 
Retail: Skim: $2.16.

Year: 2004; 
Month: April; 
Farm: $1.31; 
Cooperative: $1.39; 
Wholesale: Whole: $2.23; 
Wholesale: 2%: $1.94; 
Wholesale: 1%: $1.91; 
Wholesale: Skim: $1.76; 
Retail: Whole: $2.00; 
Retail: 2%: $2.10; 
Retail: 1%: $2.18; 
Retail: Skim: $2.03.

Year: 2004; 
Month: May; 
Farm: $1.83; 
Cooperative: $1.91; 
Wholesale: Whole: $2.77; 
Wholesale: 2%: $2.35; 
Wholesale: 1%: $2.33; 
Wholesale: Skim: $2.14; 
Retail: Whole: $2.62; 
Retail: 2%: $2.67; 
Retail: 1%: $2.65; 
Retail: Skim: $2.55.

Average; 
Farm: $1.32; 
Cooperative: $1.40; 
Wholesale: Whole: $2.36; 
Wholesale: 2%: $2.17; 
Wholesale: 1%: $2.09; 
Wholesale: Skim: $1.97; 
Retail: Whole: $2.16; 
Retail: 2%: $2.25; 
Retail: 1%: $2.31; 
Wholesale: Skim: $2.16.

Source: GAO's analysis of price data provided by USDA, the Defense 
Commissary Agency, and Information Resources, Inc.

Note: For the Phoenix market, the farm price is the USDA-estimated farm 
Class I price for 3.5 percent milkfat content; the cooperative price is 
the announced cooperative Class I price for Phoenix for 3.5 percent 
milkfat content; the wholesale price is the average of the prices paid 
by the commissaries at Luke Air Force Base and Davis-Monthan Air Force 
Base, adjusted for a 5 percent markup; and the retail price is the 
price collected by Information Resources, Inc., for the Phoenix market. 
Prices may not average due to rounding.

[End of table]

Table 22: Prices for a Gallon of Milk in Salt Lake City, Utah, October 
2000 through May 2004: 

Year: 2000; 
Month: October; 
Farm: $1.13; 
Cooperative: $1.21; 
Wholesale: Whole: $2.03; 
Wholesale: 2%: $1.96; 
Wholesale: 1%: $1.84; 
Wholesale: Skim: $1.80; 
Retail: Whole: $2.60; 
Retail: 2%: $2.18; 
Retail: 1%: $2.17; 
Retail: Skim: $2.44.

Year: 2000; 
Month: November; 
Farm: $1.13; 
Cooperative: $1.20; 
Wholesale: Whole: $2.04; 
Wholesale: 2%: $1.97; 
Wholesale: 1%: $1.85; 
Wholesale: Skim: $1.81; 
Retail: Whole: $2.59; 
Retail: 2%: $2.38; 
Retail: 1%: $2.39; 
Retail: Skim: $2.44.

Year: 2000; 
Month: December; 
Farm: $1.15; 
Cooperative: $1.23; 
Wholesale: Whole: $2.06; 
Wholesale: 2%: $1.98; 
Wholesale: 1%: $1.86; 
Wholesale: Skim: $1.81; 
Retail: Whole: $2.58; 
Retail: 2%: $2.18; 
Retail: 1%: $2.24; 
Retail: Skim: $2.44.

Average; 
Farm: $1.14; 
Cooperative: $1.21; 
Wholesale: Whole: $2.04; 
Wholesale: 2%: $1.97; 
Wholesale: 1%: $1.85; 
Wholesale: Skim: $1.81; 
Retail: Whole: $2.59; 
Retail: 2%: $2.25; 
Retail: 1%: $2.27; 
Retail: Skim: $2.44.

Year: 2001; 
Month: January; 
Farm: $1.31; 
Cooperative: $1.39; 
Wholesale: Whole: $2.14; 
Wholesale: 2%: $2.03; 
Wholesale: 1%: $1.89; 
Wholesale: Skim: $1.81; 
Retail: Whole: $2.68; 
Retail: 2%: $2.27; 
Retail: 1%: $2.17; 
Retail: Skim: $2.42.

Year: 2001; 
Month: February; 
Farm: $1.13; 
Cooperative: $1.21; 
Wholesale: Whole: $2.15; 
Wholesale: 2%: $2.04; 
Wholesale: 1%: $1.89; 
Wholesale: Skim: $1.82; 
Retail: Whole: $2.58; 
Retail: 2%: $2.21; 
Retail: 1%: $2.19; 
Retail: Skim: $2.31.

Year: 2001; 
Month: March; 
Farm: $1.19; 
Cooperative: $1.28; 
Wholesale: Whole: $2.09; 
Wholesale: 2%: $2.00; 
Wholesale: 1%: $1.87; 
Wholesale: Skim: $1.82; 
Retail: Whole: $2.50; 
Retail: 2%: $2.23; 
Retail: 1%: $2.21; 
Retail: Skim: $2.21.

Year: 2001; 
Month: April; 
Farm: $1.26; 
Cooperative: $1.34; 
Wholesale: Whole: $2.15; 
Wholesale: 2%: $2.04; 
Wholesale: 1%: $1.89; 
Wholesale: Skim: $1.82; 
Retail: Whole: $2.34; 
Retail: 2%: $2.28; 
Retail: 1%: $2.27; 
Retail: Skim: $2.09.

Year: 2001; 
Month: May; 
Farm: $1.33; 
Cooperative: $1.41; 
Wholesale: Whole: $2.22; 
Wholesale: 2%: $2.08; 
Wholesale: 1%: $1.91; 
Wholesale: Skim: $1.82; 
Retail: Whole: $2.13; 
Retail: 2%: $2.09; 
Retail: 1%: $2.03; 
Retail: Skim: $2.18.

Year: 2001; 
Month: June; 
Farm: $1.39; 
Cooperative: $1.48; 
Wholesale: Whole: $2.28; 
Wholesale: 2%: $2.12; 
Wholesale: 1%: $1.93; 
Wholesale: Skim: $1.83; 
Retail: Whole: $2.38; 
Retail: 2%: $2.18; 
Retail: 1%: $2.16; 
Retail: Skim: $2.21.

Year: 2001; 
Month: July; 
Farm: $1.42; 
Cooperative: $1.51; 
Wholesale: Whole: $2.34; 
Wholesale: 2%: $2.15; 
Wholesale: 1%: $1.96; 
Wholesale: Skim: $1.84; 
Retail: Whole: $2.39; 
Retail: 2%: $2.19; 
Retail: 1%: $2.12; 
Retail: Skim: $2.00.

Year: 2001; 
Month: August; 
Farm: $1.43; 
Cooperative: $1.51; 
Wholesale: Whole: $2.36; 
Wholesale: 2%: $2.17; 
Wholesale: 1%: $1.97; 
Wholesale: Skim: $1.84; 
Retail: Whole: $2.39; 
Retail: 2%: $2.13; 
Retail: 1%: $2.13; 
Retail: Skim: $2.00.

Year: 2001; 
Month: September; 
Farm: $1.44; 
Cooperative: $1.53; 
Wholesale: Whole: $2.37; 
Wholesale: 2%: $2.18; 
Wholesale: 1%: $1.97; 
Wholesale: Skim: $1.85; 
Retail: Whole: $2.46; 
Retail: 2%: $2.20; 
Retail: 1%: $2.20; 
Retail: Skim: $2.06.

Year: 2001; 
Month: October; 
Farm: $1.48; 
Cooperative: $1.56; 
Wholesale: Whole: $2.39; 
Wholesale: 2%: $2.19; 
Wholesale: 1%: $1.97; 
Wholesale: Skim: $1.83; 
Retail: Whole: $2.39; 
Retail: 2%: $2.35; 
Retail: 1%: $2.37; 
Retail: Skim: $2.21.

Year: 2001; 
Month: November; 
Farm: $1.47; 
Cooperative: $1.55; 
Wholesale: Whole: $2.41; 
Wholesale: 2%: $2.22; 
Wholesale: 1%: $2.02; 
Wholesale: Skim: $1.91; 
Retail: Whole: $2.41; 
Retail: 2%: $2.36; 
Retail: 1%: $2.33; 
Retail: Skim: $2.22.

Year: 2001; 
Month: December; 
Farm: $1.14; 
Cooperative: $1.22; 
Wholesale: Whole: $2.28; 
Wholesale: 2%: $2.14; 
Wholesale: 1%: $1.98; 
Wholesale: Skim: $1.90; 
Retail: Whole: $2.37; 
Retail: 2%: $2.35; 
Retail: 1%: $2.34; 
Retail: Skim: $2.15.

Average; 
Farm: $1.33; 
Cooperative: $1.42; 
Wholesale: Whole: $2.27; 
Wholesale: 2%: $2.11; 
Wholesale: 1%: $1.94; 
Wholesale: Skim: $1.84; 
Retail: Whole: $2.42; 
Retail: 2%: $2.24; 
Retail: 1%: $2.21; 
Retail: Skim: $2.17.

Year: 2002; 
Month: January; 
Farm: $1.14; 
Cooperative: $1.22; 
Wholesale: Whole: $2.16; 
Wholesale: 2%: $2.04; 
Wholesale: 1%: $1.89; 
Wholesale: Skim: $1.83; 
Retail: Whole: $2.25; 
Retail: 2%: $2.24; 
Retail: 1%: $2.24; 
Retail: Skim: $2.06.

Year: 2002; 
Month: February; 
Farm: $1.14; 
Cooperative: $1.22; 
Wholesale: Whole: $2.16; 
Wholesale: 2%: $2.04; 
Wholesale: 1%: $1.89; 
Wholesale: Skim: $1.83; 
Retail: Whole: $2.46; 
Retail: 2%: $2.41; 
Retail: 1%: $2.42; 
Retail: Skim: $2.18.

Year: 2002; 
Month: March; 
Farm: $1.11; 
Cooperative: $1.19; 
Wholesale: Whole: $2.15; 
Wholesale: 2%: $2.04; 
Wholesale: 1%: $1.89; 
Wholesale: Skim: $1.83; 
Retail: Whole: $2.41; 
Retail: 2%: $2.33; 
Retail: 1%: $2.34; 
Retail: Skim: $2.17.

Year: 2002; 
Month: April; 
Farm: $1.10; 
Cooperative: $1.18; 
Wholesale: Whole: $2.02; 
Wholesale: 2%: $1.96; 
Wholesale: 1%: $1.88; 
Wholesale: Skim: $1.75; 
Retail: Whole: $2.37; 
Retail: 2%: $2.33; 
Retail: 1%: $2.29; 
Retail: Skim: $2.13.

Year: 2002; 
Month: May; 
Farm: $1.08; 
Cooperative: $1.16; 
Wholesale: Whole: $1.89; 
Wholesale: 2%: $1.88; 
Wholesale: 1%: $1.86; 
Wholesale: Skim: $1.67; 
Retail: Whole: $2.34; 
Retail: 2%: $2.31; 
Retail: 1%: $2.30; 
Retail: Skim: $2.13.

Year: 2002; 
Month: June; 
Farm: $1.06; 
Cooperative: $1.14; 
Wholesale: Whole: $1.88; 
Wholesale: 2%: $1.88; 
Wholesale: 1%: $1.85; 
Wholesale: Skim: $1.66; 
Retail: Whole: $2.39; 
Retail: 2%: $2.38; 
Retail: 1%: $2.42; 
Retail: Skim: $2.17.

Year: 2002; 
Month: July; 
Farm: $1.03; 
Cooperative: $1.11; 
Wholesale: Whole: $1.85; 
Wholesale: 2%: $1.87; 
Wholesale: 1%: $1.86; 
Wholesale: Skim: $1.68; 
Retail: Whole: $2.38; 
Retail: 2%: $2.30; 
Retail: 1%: $2.26; 
Retail: Skim: $2.17.

Year: 2002; 
Month: August; 
Farm: $1.01; 
Cooperative: $1.09; 
Wholesale: Whole: $1.84; 
Wholesale: 2%: $1.86; 
Wholesale: 1%: $1.85; 
Wholesale: Skim: $1.67; 
Retail: Whole: $2.37; 
Retail: 2%: $2.33; 
Retail: 1%: $2.37; 
Retail: Skim: $2.10.

Year: 2002; 
Month: September; 
Farm: $1.01; 
Cooperative: $1.09; 
Wholesale: Whole: $1.84; 
Wholesale: 2%: $1.85; 
Wholesale: 1%: $1.85; 
Wholesale: Skim: $1.68; 
Retail: Whole: $2.16; 
Retail: 2%: $2.01; 
Retail: 1%: $1.94; 
Retail: Skim: $1.91.

Year: 2002; 
Month: October; 
Farm: $0.99; 
Cooperative: $1.06; 
Wholesale: Whole: $1.84; 
Wholesale: 2%: $1.84; 
Wholesale: 1%: $1.84; 
Wholesale: Skim: $1.68; 
Retail: Whole: $2.46; 
Retail: 2%: $2.42; 
Retail: 1%: $2.40; 
Retail: Skim: $2.17.

Year: 2002; 
Month: November; 
Farm: $1.02; 
Cooperative: $1.10; 
Wholesale: Whole: $1.85; 
Wholesale: 2%: $1.85; 
Wholesale: 1%: $1.85; 
Wholesale: Skim: $1.70; 
Retail: Whole: $2.38; 
Retail: 2%: $2.44; 
Retail: 1%: $2.41; 
Retail: Skim: $2.17.

Year: 2002; 
Month: December; 
Farm: $1.02; 
Cooperative: $1.10; 
Wholesale: Whole: $1.87; 
Wholesale: 2%: $1.87; 
Wholesale: 1%: $1.86; 
Wholesale: Skim: $1.71; 
Retail: Whole: $2.10; 
Retail: 2%: $1.97; 
Retail: 1%: $1.99; 
Retail: Skim: $1.84.

Average; 
Farm: $1.06; 
Cooperative: $1.14; 
Wholesale: Whole: $1.95; 
Wholesale: 2%: $1.92; 
Wholesale: 1%: $1.86; 
Wholesale: Skim: $1.72; 
Retail: Whole: $2.34; 
Retail: 2%: $2.29; 
Retail: 1%: $2.28; 
Retail: Skim: $2.10.

Year: 2003; 
Month: January; 
Farm: $1.02; 
Cooperative: $1.10; 
Wholesale: Whole: $1.87; 
Wholesale: 2%: $1.86; 
Wholesale: 1%: $1.85; 
Wholesale: Skim: $1.70; 
Retail: Whole: $2.10; 
Retail: 2%: $2.06; 
Retail: 1%: $2.01; 
Retail: Skim: $1.83.

Year: 2003; 
Month: February; 
Farm: $0.99; 
Cooperative: $1.07; 
Wholesale: Whole: $1.86; 
Wholesale: 2%: $1.85; 
Wholesale: 1%: $1.84; 
Wholesale: Skim: $1.68; 
Retail: Whole: $2.09; 
Retail: 2%: $2.10; 
Retail: 1%: $2.08; 
Retail: Skim: $1.88.

Year: 2003; 
Month: March; 
Farm: $0.96; 
Cooperative: $1.04; 
Wholesale: Whole: $1.85; 
Wholesale: 2%: $1.84; 
Wholesale: 1%: $1.82; 
Wholesale: Skim: $1.66; 
Retail: Whole: $2.07; 
Retail: 2%: $2.05; 
Retail: 1%: $2.03; 
Retail: Skim: $1.83.

Year: 2003; 
Month: April; 
Farm: $0.94; 
Cooperative: $1.02; 
Wholesale: Whole: $1.88; 
Wholesale: 2%: $1.87; 
Wholesale: 1%: $1.85; 
Wholesale: Skim: $1.69; 
Retail: Whole: $2.10; 
Retail: 2%: $2.09; 
Retail: 1%: $2.07; 
Retail: Skim: $1.85.

Year: 2003; 
Month: May; 
Farm: $0.95; 
Cooperative: $1.03; 
Wholesale: Whole: $1.90; 
Wholesale: 2%: $1.89; 
Wholesale: 1%: $1.87; 
Wholesale: Skim: $1.71; 
Retail: Whole: $2.12; 
Retail: 2%: $2.11; 
Retail: 1%: $2.09; 
Retail: Skim: $1.89.

Year: 2003; 
Month: June; 
Farm: $0.95; 
Cooperative: $1.03; 
Wholesale: Whole: $1.90; 
Wholesale: 2%: $1.89; 
Wholesale: 1%: $1.87; 
Wholesale: Skim: $1.71; 
Retail: Whole: $1.96; 
Retail: 2%: $2.00; 
Retail: 1%: $2.01; 
Retail: Skim: $1.83.

Year: 2003; 
Month: July; 
Farm: $0.95; 
Cooperative: $1.03; 
Wholesale: Whole: $1.90; 
Wholesale: 2%: $1.89; 
Wholesale: 1%: $1.87; 
Wholesale: Skim: $1.71; 
Retail: Whole: $2.04; 
Retail: 2%: $2.03; 
Retail: 1%: $2.01; 
Retail: Skim: $1.86.

Year: 2003; 
Month: August; 
Farm: $1.05; 
Cooperative: $1.14; 
Wholesale: Whole: $1.96; 
Wholesale: 2%: $1.95; 
Wholesale: 1%: $1.94; 
Wholesale: Skim: $1.77; 
Retail: Whole: $2.32; 
Retail: 2%: $2.33; 
Retail: 1%: $2.23; 
Retail: Skim: $2.11.

Year: 2003; 
Month: September; 
Farm: $1.29; 
Cooperative: $1.37; 
Wholesale: Whole: $2.13; 
Wholesale: 2%: $2.10; 
Wholesale: 1%: $2.09; 
Wholesale: Skim: $1.92; 
Retail: Whole: $2.37; 
Retail: 2%: $2.51; 
Retail: 1%: $2.28; 
Retail: Skim: $2.32.

Year: 2003; 
Month: October; 
Farm: $1.34; 
Cooperative: $1.42; 
Wholesale: Whole: $2.27; 
Wholesale: 2%: $2.24; 
Wholesale: 1%: $2.23; 
Wholesale: Skim: $2.07; 
Retail: Whole: $2.22; 
Retail: 2%: $2.29; 
Retail: 1%: $2.28; 
Retail: Skim: $2.18.

Year: 2003; 
Month: November; 
Farm: $1.35; 
Cooperative: $1.43; 
Wholesale: Whole: $2.29; 
Wholesale: 2%: $2.28; 
Wholesale: 1%: $2.26; 
Wholesale: Skim: $2.09; 
Retail: Whole: $2.00; 
Retail: 2%: $2.05; 
Retail: 1%: $2.06; 
Retail: Skim: $1.88.

Year: 2003; 
Month: December; 
Farm: $1.30; 
Cooperative: $1.38; 
Wholesale: Whole: $2.28; 
Wholesale: 2%: $2.26; 
Wholesale: 1%: $2.24; 
Wholesale: Skim: $2.07; 
Retail: Whole: $2.03; 
Retail: 2%: $2.10; 
Retail: 1%: $2.10; 
Retail: Skim: $1.95.

Average; 
Farm: $1.09; 
Cooperative: $1.17; 
Wholesale: Whole: $2.01; 
Wholesale: 2%: $1.99; 
Wholesale: 1%: $1.98; 
Wholesale: Skim: $1.82; 
Retail: Whole: $2.12; 
Retail: 2%: $2.14; 
Retail: 1%: $2.10; 
Retail: Skim: $1.95.

Year: 2004; 
Month: January; 
Farm: $1.14; 
Cooperative: $1.21; 
Wholesale: Whole: $2.21; 
Wholesale: 2%: $2.18; 
Wholesale: 1%: $2.16; 
Wholesale: Skim: $1.99; 
Retail: Whole: $2.00; 
Retail: 2%: $2.06; 
Retail: 1%: $2.08; 
Retail: Skim: $1.93.

Year: 2004; 
Month: February; 
Farm: $1.12; 
Cooperative: $1.19; 
Wholesale: Whole: $2.12; 
Wholesale: 2%: $2.08; 
Wholesale: 1%: $2.04; 
Wholesale: Skim: $1.86; 
Retail: Whole: $1.96; 
Retail: 2%: $2.03; 
Retail: 1%: $2.09; 
Retail: Skim: $1.90.

Year: 2004; 
Month: March; 
Farm: $1.14; 
Cooperative: $1.22; 
Wholesale: Whole: $2.13; 
Wholesale: 2%: $2.06; 
Wholesale: 1%: $2.00; 
Wholesale: Skim: $1.80; 
Retail: Whole: $1.99; 
Retail: 2%: $2.06; 
Retail: 1%: $2.13; 
Retail: Skim: $1.95.

Year: 2004; 
Month: April; 
Farm: $1.29; 
Cooperative: $1.37; 
Wholesale: Whole: $2.20; 
Wholesale: 2%: $2.10; 
Wholesale: 1%: $2.01; 
Wholesale: Skim: $1.78; 
Retail: Whole: $2.19; 
Retail: 2%: $2.22; 
Retail: 1%: $2.21; 
Retail: Skim: $2.02.

Year: 2004; 
Month: May; 
Farm: $1.81; 
Cooperative: $1.88; 
Wholesale: Whole: $2.52; 
Wholesale: 2%: $2.38; 
Wholesale: 1%: $2.28; 
Wholesale: Skim: $2.03; 
Retail: Whole: $2.50; 
Retail: 2%: $2.58; 
Retail: 1%: $2.63; 
Retail: Skim: $2.38.

Average; 
Farm: $1.30; 
Cooperative: $1.37; 
Wholesale: Whole: $2.24; 
Wholesale: 2%: $2.16; 
Wholesale: 1%: $2.10; 
Wholesale: Skim: $1.89; 
Retail: Whole: $2.13; 
Retail: 2%: $2.19; 
Retail: 1%: $2.23; 
Wholesale: Skim: $2.04.

Source: GAO's analysis of price data provided by USDA, the Defense 
Commissary Agency, and Information Resources, Inc.

Note: For the Salt Lake City market, the farm price is the USDA-
estimated farm Class I price for 3.5 percent milkfat content; the 
cooperative price is the announced cooperative Class I price for Salt 
Lake City for 3.5 percent milkfat content; the wholesale price is the 
price paid by the commissary at Hill Air Force Base, adjusted for a 5 
percent markup; and the retail price is the price collected by 
Information Resources, Inc., for the Salt Lake City market. Prices may 
not average due to rounding.

[End of table]

Table 23: Prices for a Gallon of Milk in San Diego, California, October 
2000 through May 2004: 

Year: 2000; 
Month: October; 
Farm: $0.99; 
Cooperative: $1.21; 
Wholesale: Whole: $1.90; 
Wholesale: 2%: $1.90; 
Wholesale: 1%: $1.87; 
Wholesale: Skim: $1.69; 
Retail: Whole: $2.55; 
Retail: 2%: $2.45; 
Retail: 1%: $2.66; 
Retail: Skim: $2.29.

Year: 2000; 
Month: November; 
Farm: $1.04; 
Cooperative: $1.21; 
Wholesale: Whole: $1.88; 
Wholesale: 2%: $1.88; 
Wholesale: 1%: $1.85; 
Wholesale: Skim: $1.66; 
Retail: Whole: $2.51; 
Retail: 2%: $2.54; 
Retail: 1%: $2.54; 
Retail: Skim: $2.23.

Year: 2000; 
Month: December; 
Farm: $1.06; 
Cooperative: $1.28; 
Wholesale: Whole: $1.95; 
Wholesale: 2%: $1.91; 
Wholesale: 1%: $1.88; 
Wholesale: Skim: $1.67; 
Retail: Whole: $2.72; 
Retail: 2%: $2.63; 
Retail: 1%: $2.79; 
Retail: Skim: $2.40.

Average; 
Farm: $1.03; 
Cooperative: $1.23; 
Wholesale: Whole: $1.91; 
Wholesale: 2%: $1.90; 
Wholesale: 1%: $1.87; 
Wholesale: Skim: $1.67; 
Retail: Whole: $2.59; 
Retail: 2%: $2.54; 
Retail: 1%: $2.66; 
Retail: Skim: $2.31.

Year: 2001; 
Month: January; 
Farm: $1.03; 
Cooperative: $1.43; 
Wholesale: Whole: $2.03; 
Wholesale: 2%: $1.98; 
Wholesale: 1%: $1.95; 
Wholesale: Skim: $1.68; 
Retail: Whole: $2.81; 
Retail: 2%: $2.72; 
Retail: 1%: $2.93; 
Retail: Skim: $2.52.

Year: 2001; 
Month: February; 
Farm: $1.05; 
Cooperative: $1.21; 
Wholesale: Whole: $1.92; 
Wholesale: 2%: $1.91; 
Wholesale: 1%: $1.91; 
Wholesale: Skim: $1.66; 
Retail: Whole: $2.69; 
Retail: 2%: $2.75; 
Retail: 1%: $2.71; 
Retail: Skim: $2.36.

Year: 2001; 
Month: March; 
Farm: $1.11; 
Cooperative: $1.26; 
Wholesale: Whole: $1.98; 
Wholesale: 2%: $1.97; 
Wholesale: 1%: $1.94; 
Wholesale: Skim: $1.67; 
Retail: Whole: $2.68; 
Retail: 2%: $2.57; 
Retail: 1%: $2.77; 
Retail: Skim: $2.40.

Year: 2001; 
Month: April; 
Farm: $1.18; 
Cooperative: $1.33; 
Wholesale: Whole: $2.05; 
Wholesale: 2%: $2.01; 
Wholesale: 1%: $1.96; 
Wholesale: Skim: $1.67; 
Retail: Whole: $2.81; 
Retail: 2%: $2.74; 
Retail: 1%: $2.84; 
Retail: Skim: $2.39.

Year: 2001; 
Month: May; 
Farm: $1.25; 
Cooperative: $1.39; 
Wholesale: Whole: $2.11; 
Wholesale: 2%: $2.06; 
Wholesale: 1%: $1.98; 
Wholesale: Skim: $1.67; 
Retail: Whole: $2.85; 
Retail: 2%: $2.71; 
Retail: 1%: $2.81; 
Retail: Skim: $2.30.

Year: 2001; 
Month: June; 
Farm: $1.31; 
Cooperative: $1.46; 
Wholesale: Whole: $2.13; 
Wholesale: 2%: $2.07; 
Wholesale: 1%: $1.98; 
Wholesale: Skim: $1.67; 
Retail: Whole: $2.91; 
Retail: 2%: $2.85; 
Retail: 1%: $2.80; 
Retail: Skim: $2.34.

Year: 2001; 
Month: July; 
Farm: $1.30; 
Cooperative: $1.49; 
Wholesale: Whole: $2.15; 
Wholesale: 2%: $2.08; 
Wholesale: 1%: $1.99; 
Wholesale: Skim: $1.67; 
Retail: Whole: $3.00; 
Retail: 2%: $2.94; 
Retail: 1%: $2.99; 
Retail: Skim: $2.50.

Year: 2001; 
Month: August; 
Farm: $1.34; 
Cooperative: $1.49; 
Wholesale: Whole: $2.19; 
Wholesale: 2%: $2.11; 
Wholesale: 1%: $2.00; 
Wholesale: Skim: $1.67; 
Retail: Whole: $3.10; 
Retail: 2%: $2.99; 
Retail: 1%: $3.04; 
Retail: Skim: $2.55.

Year: 2001; 
Month: September; 
Farm: $1.37; 
Cooperative: $1.49; 
Wholesale: Whole: $2.19; 
Wholesale: 2%: $2.11; 
Wholesale: 1%: $2.00; 
Wholesale: Skim: $1.67; 
Retail: Whole: $3.22; 
Retail: 2%: $2.95; 
Retail: 1%: $3.24; 
Retail: Skim: $2.62.

Year: 2001; 
Month: October; 
Farm: $1.21; 
Cooperative: $1.55; 
Wholesale: Whole: $2.23; 
Wholesale: 2%: $2.13; 
Wholesale: 1%: $2.00; 
Wholesale: Skim: $1.65; 
Retail: Whole: $3.27; 
Retail: 2%: $2.95; 
Retail: 1%: $3.24; 
Retail: Skim: $2.61.

Year: 2001; 
Month: November; 
Farm: $1.11; 
Cooperative: $1.41; 
Wholesale: Whole: $2.11; 
Wholesale: 2%: $2.09; 
Wholesale: 1%: $2.02; 
Wholesale: Skim: $1.71; 
Retail: Whole: $3.18; 
Retail: 2%: $2.93; 
Retail: 1%: $2.81; 
Retail: Skim: $2.52.

Year: 2001; 
Month: December; 
Farm: $1.06; 
Cooperative: $1.19; 
Wholesale: Whole: $2.01; 
Wholesale: 2%: $2.00; 
Wholesale: 1%: $2.00; 
Wholesale: Skim: $1.64; 
Retail: Whole: $3.06; 
Retail: 2%: $2.94; 
Retail: 1%: $3.08; 
Retail: Skim: $2.52.

Average; 
Farm: $1.19; 
Cooperative: $1.39; 
Wholesale: Whole: $2.09; 
Wholesale: 2%: $2.04; 
Wholesale: 1%: $1.98; 
Wholesale: Skim: $1.67; 
Retail: Whole: $2.97; 
Retail: 2%: $2.84; 
Retail: 1%: $2.94; 
Retail: Skim: $2.47.

Year: 2002; 
Month: January; 
Farm: $1.07; 
Cooperative: $1.18; 
Wholesale: Whole: $1.99; 
Wholesale: 2%: $1.98; 
Wholesale: 1%: $1.99; 
Wholesale: Skim: $1.64; 
Retail: Whole: $3.05; 
Retail: 2%: $2.91; 
Retail: 1%: $2.94; 
Retail: Skim: $2.46.

Year: 2002; 
Month: February; 
Farm: $1.01; 
Cooperative: $1.20; 
Wholesale: Whole: $1.97; 
Wholesale: 2%: $1.97; 
Wholesale: 1%: $1.97; 
Wholesale: Skim: $1.64; 
Retail: Whole: $2.95; 
Retail: 2%: $2.76; 
Retail: 1%: $2.72; 
Retail: Skim: $2.40.

Year: 2002; 
Month: March; 
Farm: $0.99; 
Cooperative: $1.16; 
Wholesale: Whole: $1.92; 
Wholesale: 2%: $1.93; 
Wholesale: 1%: $1.96; 
Wholesale: Skim: $1.63; 
Retail: Whole: $2.85; 
Retail: 2%: $2.71; 
Retail: 1%: $2.50; 
Retail: Skim: $2.32.

Year: 2002; 
Month: April; 
Farm: $0.98; 
Cooperative: $1.16; 
Wholesale: Whole: $1.88; 
Wholesale: 2%: $1.89; 
Wholesale: 1%: $1.88; 
Wholesale: Skim: $1.61; 
Retail: Whole: $2.76; 
Retail: 2%: $2.47; 
Retail: 1%: $2.63; 
Retail: Skim: $2.40.

Year: 2002; 
Month: May; 
Farm: $0.94; 
Cooperative: $1.14; 
Wholesale: Whole: $1.82; 
Wholesale: 2%: $1.81; 
Wholesale: 1%: $1.79; 
Wholesale: Skim: $1.58; 
Retail: Whole: $2.88; 
Retail: 2%: $2.67; 
Retail: 1%: $2.73; 
Retail: Skim: $2.35.

Year: 2002; 
Month: June; 
Farm: $0.90; 
Cooperative: $1.10; 
Wholesale: Whole: $1.79; 
Wholesale: 2%: $1.80; 
Wholesale: 1%: $1.78; 
Wholesale: Skim: $1.58; 
Retail: Whole: $2.87; 
Retail: 2%: $2.62; 
Retail: 1%: $2.85; 
Retail: Skim: $2.40.

Year: 2002; 
Month: July; 
Farm: $0.87; 
Cooperative: $1.10; 
Wholesale: Whole: $1.77; 
Wholesale: 2%: $1.78; 
Wholesale: 1%: $1.77; 
Wholesale: Skim: $1.57; 
Retail: Whole: $2.85; 
Retail: 2%: $2.49; 
Retail: 1%: $2.77; 
Retail: Skim: $2.37.

Year: 2002; 
Month: August; 
Farm: $0.89; 
Cooperative: $1.08; 
Wholesale: Whole: $1.75; 
Wholesale: 2%: $1.75; 
Wholesale: 1%: $1.76; 
Wholesale: Skim: $1.57; 
Retail: Whole: $2.69; 
Retail: 2%: $2.58; 
Retail: 1%: $2.63; 
Retail: Skim: $2.28.

Year: 2002; 
Month: September; 
Farm: $0.91; 
Cooperative: $1.08; 
Wholesale: Whole: $1.75; 
Wholesale: 2%: $1.75; 
Wholesale: 1%: $1.76; 
Wholesale: Skim: $1.57; 
Retail: Whole: $2.72; 
Retail: 2%: $2.64; 
Retail: 1%: $2.72; 
Retail: Skim: $2.29.

Year: 2002; 
Month: October; 
Farm: $0.94; 
Cooperative: $1.05; 
Wholesale: Whole: $1.75; 
Wholesale: 2%: $1.76; 
Wholesale: 1%: $1.77; 
Wholesale: Skim: $1.58; 
Retail: Whole: $2.75; 
Retail: 2%: $2.71; 
Retail: 1%: $2.74; 
Retail: Skim: $2.30.

Year: 2002; 
Month: November; 
Farm: $0.92; 
Cooperative: $1.16; 
Wholesale: Whole: $1.83; 
Wholesale: 2%: $1.85; 
Wholesale: 1%: $1.86; 
Wholesale: Skim: $1.65; 
Retail: Whole: $2.80; 
Retail: 2%: $2.70; 
Retail: 1%: $2.80; 
Retail: Skim: $2.30.

Year: 2002; 
Month: December; 
Farm: $0.92; 
Cooperative: $1.08; 
Wholesale: Whole: $1.77; 
Wholesale: 2%: $1.78; 
Wholesale: 1%: $1.78; 
Wholesale: Skim: $1.58; 
Retail: Whole: $2.73; 
Retail: 2%: $2.71; 
Retail: 1%: $2.74; 
Retail: Skim: $2.23.

Average; 
Farm: $0.95; 
Cooperative: $1.12; 
Wholesale: Whole: $1.83; 
Wholesale: 2%: $1.84; 
Wholesale: 1%: $1.84; 
Wholesale: Skim: $1.60; 
Retail: Whole: $2.83; 
Retail: 2%: $2.66; 
Retail: 1%: $2.73; 
Retail: Skim: $2.34.

Year: 2003; 
Month: January; 
Farm: $0.92; 
Cooperative: $1.11; 
Wholesale: Whole: $1.77; 
Wholesale: 2%: $1.77; 
Wholesale: 1%: $1.77; 
Wholesale: Skim: $1.57; 
Retail: Whole: $2.68; 
Retail: 2%: $2.59; 
Retail: 1%: $2.84; 
Retail: Skim: $2.28.

Year: 2003; 
Month: February; 
Farm: $0.89; 
Cooperative: $1.06; 
Wholesale: Whole: $1.74; 
Wholesale: 2%: $1.71; 
Wholesale: 1%: $1.71; 
Wholesale: Skim: $1.50; 
Retail: Whole: $2.74; 
Retail: 2%: $2.63; 
Retail: 1%: $2.94; 
Retail: Skim: $2.29.

Year: 2003; 
Month: March; 
Farm: $0.87; 
Cooperative: $1.05; 
Wholesale: Whole: $1.72; 
Wholesale: 2%: $1.71; 
Wholesale: 1%: $1.69; 
Wholesale: Skim: $1.44; 
Retail: Whole: $2.70; 
Retail: 2%: $2.58; 
Retail: 1%: $2.78; 
Retail: Skim: $2.27.

Year: 2003; 
Month: April; 
Farm: $0.88; 
Cooperative: $1.02; 
Wholesale: Whole: $1.70; 
Wholesale: 2%: $1.70; 
Wholesale: 1%: $1.67; 
Wholesale: Skim: $1.43; 
Retail: Whole: $2.72; 
Retail: 2%: $2.60; 
Retail: 1%: $2.80; 
Retail: Skim: $2.27.

Year: 2003; 
Month: May; 
Farm: $0.87; 
Cooperative: $1.03; 
Wholesale: Whole: $1.68; 
Wholesale: 2%: $1.69; 
Wholesale: 1%: $1.65; 
Wholesale: Skim: $1.42; 
Retail: Whole: $2.81; 
Retail: 2%: $2.67; 
Retail: 1%: $2.80; 
Retail: Skim: $2.29.

Year: 2003; 
Month: June; 
Farm: $0.87; 
Cooperative: $1.04; 
Wholesale: Whole: $1.68; 
Wholesale: 2%: $1.69; 
Wholesale: 1%: $1.65; 
Wholesale: Skim: $1.42; 
Retail: Whole: $2.80; 
Retail: 2%: $2.68; 
Retail: 1%: $2.78; 
Retail: Skim: $2.30.

Year: 2003; 
Month: July; 
Farm: $0.99; 
Cooperative: $1.03; 
Wholesale: Whole: $1.70; 
Wholesale: 2%: $1.71; 
Wholesale: 1%: $1.68; 
Wholesale: Skim: $1.44; 
Retail: Whole: $2.82; 
Retail: 2%: $2.70; 
Retail: 1%: $2.84; 
Retail: Skim: $2.32.

Year: 2003; 
Month: August; 
Farm: $1.10; 
Cooperative: $1.27; 
Wholesale: Whole: $1.86; 
Wholesale: 2%: $1.89; 
Wholesale: 1%: $1.87; 
Wholesale: Skim: $1.60; 
Retail: Whole: $3.00; 
Retail: 2%: $2.78; 
Retail: 1%: $2.98; 
Retail: Skim: $2.36.

Year: 2003; 
Month: September; 
Farm: $1.14; 
Cooperative: $1.41; 
Wholesale: Whole: $2.03; 
Wholesale: 2%: $2.06; 
Wholesale: 1%: $2.04; 
Wholesale: Skim: $1.73; 
Retail: Whole: $3.13; 
Retail: 2%: $2.93; 
Retail: 1%: $3.07; 
Retail: Skim: $2.50.

Year: 2003; 
Month: October; 
Farm: $1.16; 
Cooperative: $1.42; 
Wholesale: Whole: $2.03; 
Wholesale: 2%: $2.08; 
Wholesale: 1%: $2.07; 
Wholesale: Skim: $1.76; 
Retail: Whole: $3.19; 
Retail: 2%: $2.86; 
Retail: 1%: $3.23; 
Retail: Skim: $2.43.

Year: 2003; 
Month: November; 
Farm: $1.10; 
Cooperative: $1.42; 
Wholesale: Whole: $2.03; 
Wholesale: 2%: $2.07; 
Wholesale: 1%: $2.06; 
Wholesale: Skim: $1.75; 
Retail: Whole: $3.12; 
Retail: 2%: $2.80; 
Retail: 1%: $3.29; 
Retail: Skim: $2.44.

Year: 2003; 
Month: December; 
Farm: $1.08; 
Cooperative: $1.32; 
Wholesale: Whole: $1.94; 
Wholesale: 2%: $1.98; 
Wholesale: 1%: $1.97; 
Wholesale: Skim: $1.65; 
Retail: Whole: $2.72; 
Retail: 2%: $2.49; 
Retail: 1%: $2.93; 
Retail: Skim: $2.23.

Average; 
Farm: $0.99; 
Cooperative: $1.18; 
Wholesale: Whole: $1.82; 
Wholesale: 2%: $1.84; 
Wholesale: 1%: $1.82; 
Wholesale: Skim: $1.56; 
Retail: Whole: $2.87; 
Retail: 2%: $2.69; 
Retail: 1%: $2.94; 
Retail: Skim: $2.33.

Year: 2004; 
Month: January; 
Farm: $1.04; 
Cooperative: $1.22; 
Wholesale: Whole: $1.85; 
Wholesale: 2%: $1.87; 
Wholesale: 1%: $1.85; 
Wholesale: Skim: $1.55; 
Retail: Whole: $2.64; 
Retail: 2%: $2.45; 
Retail: 1%: $2.82; 
Retail: Skim: $2.19.

Year: 2004; 
Month: February; 
Farm: $1.09; 
Cooperative: $1.17; 
Wholesale: Whole: $1.77; 
Wholesale: 2%: $1.77; 
Wholesale: 1%: $1.74; 
Wholesale: Skim: $1.44; 
Retail: Whole: $2.62; 
Retail: 2%: $2.43; 
Retail: 1%: $2.72; 
Retail: Skim: $2.17.

Year: 2004; 
Month: March; 
Farm: $1.26; 
Cooperative: $1.21; 
Wholesale: Whole: $1.80; 
Wholesale: 2%: $1.77; 
Wholesale: 1%: $1.71; 
Wholesale: Skim: $1.40; 
Retail: Whole: $2.55; 
Retail: 2%: $2.34; 
Retail: 1%: $2.76; 
Retail: Skim: $2.13.

Year: 2004; 
Month: April; 
Farm: $1.48; 
Cooperative: $1.38; 
Wholesale: Whole: $1.99; 
Wholesale: 2%: $1.87; 
Wholesale: 1%: $1.76; 
Wholesale: Skim: $1.43; 
Retail: Whole: $2.76; 
Retail: 2%: $2.49; 
Retail: 1%: $2.63; 
Retail: Skim: $2.15.

Year: 2004; 
Month: May; 
Farm: $1.52; 
Cooperative: $1.85; 
Wholesale: Whole: $2.41; 
Wholesale: 2%: $2.34; 
Wholesale: 1%: $2.25; 
Wholesale: Skim: $1.83; 
Retail: Whole: $3.03; 
Retail: 2%: $2.78; 
Retail: 1%: $2.93; 
Retail: Skim: $2.40.

Average; 
Farm: $1.28; 
Cooperative: $1.37; 
Wholesale: Whole: $1.96; 
Wholesale: 2%: $1.92; 
Wholesale: 1%: $1.86; 
Wholesale: Skim: $1.53; 
Retail: Whole: $2.72; 
Retail: 2%: $2.50; 
Retail: 1%: $2.77; 
Wholesale: Skim: $2.21.

Source: GAO's analysis of price data provided by the California 
Department of Food and Agriculture, the Defense Commissary Agency, and 
Information Resources, Inc.

Note: For the San Diego market, the farm price is the California 
mailbox price for 3.5 percent milkfat content; the cooperative price is 
the Southern California Class I price for 3.5 percent milkfat content; 
the wholesale price is the average of the prices paid by the 
commissaries at the Naval Base, San Diego; Marine Corps Base, Camp 
Pendleton; Naval Outlying Landing Field, Imperial Beach; Marine Corps 
Air Station, Miramar; Naval Air Station, North Island; and by the San 
Onofre Commissary, Camp Pendleton, adjusted for a 5 percent markup; and 
the retail price is the price collected by Information Resources, Inc., 
for the San Diego market. Prices may not average due to rounding.

[End of table]

Table 24: Prices for a Gallon of Milk in Seattle, Washington, October 
2000 through May 2004: 

Year: 2000; 
Month: October; 
Farm: $1.20; 
Cooperative: $1.28; 
Wholesale: Whole: $1.59; 
Wholesale: 2%: $1.46; 
Wholesale: 1%: $1.38; 
Wholesale: Skim: $1.31; 
Retail: Whole: $2.71; 
Retail: 2%: $2.50; 
Retail: 1%: $2.50; 
Retail: Skim: $2.37.

Year: 2000; 
Month: November; 
Farm: $1.14; 
Cooperative: $1.22; 
Wholesale: Whole: $1.58; 
Wholesale: 2%: $1.46; 
Wholesale: 1%: $1.37; 
Wholesale: Skim: $1.30; 
Retail: Whole: $2.83; 
Retail: 2%: $2.62; 
Retail: 1%: $2.58; 
Retail: Skim: $2.49.

Year: 2000; 
Month: December; 
Farm: $1.18; 
Cooperative: $1.27; 
Wholesale: Whole: $1.61; 
Wholesale: 2%: $1.48; 
Wholesale: 1%: $1.40; 
Wholesale: Skim: $1.33; 
Retail: Whole: $2.73; 
Retail: 2%: $2.57; 
Retail: 1%: $2.57; 
Retail: Skim: $2.45.

Average; 
Farm: $1.17; 
Cooperative: $1.26; 
Wholesale: Whole: $1.59; 
Wholesale: 2%: $1.47; 
Wholesale: 1%: $1.38; 
Wholesale: Skim: $1.31; 
Retail: Whole: $2.76; 
Retail: 2%: $2.56; 
Retail: 1%: $2.55; 
Retail: Skim: $2.44.

Year: 2001; 
Month: January; 
Farm: $1.32; 
Cooperative: $1.41; 
Wholesale: Whole: $1.76; 
Wholesale: 2%: $1.63; 
Wholesale: 1%: $1.55; 
Wholesale: Skim: $1.48; 
Retail: Whole: $2.62; 
Retail: 2%: $2.39; 
Retail: 1%: $2.40; 
Retail: Skim: $2.25.

Month: February; 
Farm: $1.17; 
Cooperative: $1.25; 
Wholesale: Whole: $1.60; 
Wholesale: 2%: $1.48; 
Wholesale: 1%: $1.39; 
Wholesale: Skim: $1.33; 
Retail: Whole: $2.98; 
Retail: 2%: $2.77; 
Retail: 1%: $2.71; 
Retail: Skim: $2.62.

Month: March; 
Farm: $1.21; 
Cooperative: $1.29; 
Wholesale: Whole: $1.64; 
Wholesale: 2%: $1.51; 
Wholesale: 1%: $1.43; 
Wholesale: Skim: $1.36; 
Retail: Whole: $2.77; 
Retail: 2%: $2.52; 
Retail: 1%: $2.52; 
Retail: Skim: $2.29.

Month: April; 
Farm: $1.27; 
Cooperative: $1.36; 
Wholesale: Whole: $1.71; 
Wholesale: 2%: $1.59; 
Wholesale: 1%: $1.50; 
Wholesale: Skim: $1.43; 
Retail: Whole: $2.95; 
Retail: 2%: $2.72; 
Retail: 1%: $2.67; 
Retail: Skim: $2.54.

Month: May; 
Farm: $1.34; 
Cooperative: $1.42; 
Wholesale: Whole: $1.78; 
Wholesale: 2%: $1.66; 
Wholesale: 1%: $1.57; 
Wholesale: Skim: $1.51; 
Retail: Whole: $2.95; 
Retail: 2%: $2.65; 
Retail: 1%: $2.67; 
Retail: Skim: $2.44.

Month: June; 
Farm: $1.41; 
Cooperative: $1.49; 
Wholesale: Whole: $1.84; 
Wholesale: 2%: $1.72; 
Wholesale: 1%: $1.63; 
Wholesale: Skim: $1.57; 
Retail: Whole: $2.80; 
Retail: 2%: $2.77; 
Retail: 1%: $2.70; 
Retail: Skim: $2.49.

Month: July; 
Farm: $1.44; 
Cooperative: $1.52; 
Wholesale: Whole: $1.87; 
Wholesale: 2%: $1.75; 
Wholesale: 1%: $1.66; 
Wholesale: Skim: $1.60; 
Retail: Whole: $3.14; 
Retail: 2%: $3.01; 
Retail: 1%: $2.85; 
Retail: Skim: $2.71.

Month: August; 
Farm: $1.44; 
Cooperative: $1.53; 
Wholesale: Whole: $1.88; 
Wholesale: 2%: $1.76; 
Wholesale: 1%: $1.67; 
Wholesale: Skim: $1.61; 
Retail: Whole: $3.15; 
Retail: 2%: $2.99; 
Retail: 1%: $2.85; 
Retail: Skim: $2.71.

Month: September; 
Farm: $1.46; 
Cooperative: $1.54; 
Wholesale: Whole: $1.89; 
Wholesale: 2%: $1.77; 
Wholesale: 1%: $1.68; 
Wholesale: Skim: $1.62; 
Retail: Whole: $2.84; 
Retail: 2%: $2.65; 
Retail: 1%: $2.62; 
Retail: Skim: $2.43.

Month: October; 
Farm: $1.49; 
Cooperative: $1.57; 
Wholesale: Whole: $1.92; 
Wholesale: 2%: $1.80; 
Wholesale: 1%: $1.71; 
Wholesale: Skim: $1.64; 
Retail: Whole: $2.92; 
Retail: 2%: $2.72; 
Retail: 1%: $2.69; 
Retail: Skim: $2.46.

Month: November; 
Farm: $1.47; 
Cooperative: $1.56; 
Wholesale: Whole: $1.91; 
Wholesale: 2%: $1.78; 
Wholesale: 1%: $1.70; 
Wholesale: Skim: $1.63; 
Retail: Whole: $3.01; 
Retail: 2%: $2.76; 
Retail: 1%: $2.73; 
Retail: Skim: $2.50.

Month: December; 
Farm: $1.15; 
Cooperative: $1.23; 
Wholesale: Whole: $1.60; 
Wholesale: 2%: $1.48; 
Wholesale: 1%: $1.39; 
Wholesale: Skim: $1.32; 
Retail: Whole: $2.93; 
Retail: 2%: $2.75; 
Retail: 1%: $2.68; 
Retail: Skim: $2.47.

Average; 
Farm: $1.35; 
Cooperative: $1.43; 
Wholesale: Whole: $1.78; 
Wholesale: 2%: $1.66; 
Wholesale: 1%: $1.57; 
Wholesale: Skim: $1.51; 
Retail: Whole: $2.92; 
Retail: 2%: $2.73; 
Retail: 1%: $2.67; 
Retail: Skim: $2.49.

Year: 2002; 
Month: January; 
Farm: $1.15; 
Cooperative: $1.23; 
Wholesale: Whole: $1.60; 
Wholesale: 2%: $1.47; 
Wholesale: 1%: $1.39; 
Wholesale: Skim: $1.32; 
Retail: Whole: $3.18; 
Retail: 2%: $2.93; 
Retail: 1%: $2.82; 
Retail: Skim: $2.67.

Year: 2002; 
Month: February; 
Farm: $1.25; 
Cooperative: $1.33; 
Wholesale: Whole: $1.60; 
Wholesale: 2%: $1.47; 
Wholesale: 1%: $1.39; 
Wholesale: Skim: $1.32; 
Retail: Whole: $3.13; 
Retail: 2%: $2.86; 
Retail: 1%: $2.74; 
Retail: Skim: $2.62.

Year: 2002; 
Month: March; 
Farm: $1.12; 
Cooperative: $1.20; 
Wholesale: Whole: $1.57; 
Wholesale: 2%: $1.44; 
Wholesale: 1%: $1.36; 
Wholesale: Skim: $1.29; 
Retail: Whole: $3.16; 
Retail: 2%: $2.91; 
Retail: 1%: $2.78; 
Retail: Skim: $2.68.

Year: 2002; 
Month: April; 
Farm: $1.11; 
Cooperative: $1.19; 
Wholesale: Whole: $1.56; 
Wholesale: 2%: $1.43; 
Wholesale: 1%: $1.35; 
Wholesale: Skim: $1.28; 
Retail: Whole: $2.99; 
Retail: 2%: $2.66; 
Retail: 1%: $2.59; 
Retail: Skim: $2.42.

Year: 2002; 
Month: May; 
Farm: $1.09; 
Cooperative: $1.17; 
Wholesale: Whole: $1.54; 
Wholesale: 2%: $1.41; 
Wholesale: 1%: $1.33; 
Wholesale: Skim: $1.26; 
Retail: Whole: $3.08; 
Retail: 2%: $2.70; 
Retail: 1%: $2.68; 
Retail: Skim: $2.48.

Year: 2002; 
Month: June; 
Farm: $1.07; 
Cooperative: $1.15; 
Wholesale: Whole: $1.52; 
Wholesale: 2%: $1.40; 
Wholesale: 1%: $1.31; 
Wholesale: Skim: $1.24; 
Retail: Whole: $3.08; 
Retail: 2%: $2.56; 
Retail: 1%: $2.54; 
Retail: Skim: $2.32.

Year: 2002; 
Month: July; 
Farm: $1.03; 
Cooperative: $1.12; 
Wholesale: Whole: $1.48; 
Wholesale: 2%: $1.36; 
Wholesale: 1%: $1.27; 
Wholesale: Skim: $1.21; 
Retail: Whole: $3.07; 
Retail: 2%: $2.67; 
Retail: 1%: $2.69; 
Retail: Skim: $2.49.

Year: 2002; 
Month: August; 
Farm: $1.02; 
Cooperative: $1.10; 
Wholesale: Whole: $1.47; 
Wholesale: 2%: $1.35; 
Wholesale: 1%: $1.26; 
Wholesale: Skim: $1.20; 
Retail: Whole: $2.81; 
Retail: 2%: $2.62; 
Retail: 1%: $2.42; 
Retail: Skim: $2.43.

Year: 2002; 
Month: September; 
Farm: $1.02; 
Cooperative: $1.10; 
Wholesale: Whole: $1.47; 
Wholesale: 2%: $1.35; 
Wholesale: 1%: $1.26; 
Wholesale: Skim: $1.20; 
Retail: Whole: $3.01; 
Retail: 2%: $2.70; 
Retail: 1%: $2.71; 
Retail: Skim: $2.47.

Year: 2002; 
Month: October; 
Farm: $0.99; 
Cooperative: $1.07; 
Wholesale: Whole: $1.45; 
Wholesale: 2%: $1.32; 
Wholesale: 1%: $1.24; 
Wholesale: Skim: $1.17; 
Retail: Whole: $3.10; 
Retail: 2%: $2.77; 
Retail: 1%: $2.73; 
Retail: Skim: $2.56.

Year: 2002; 
Month: November; 
Farm: $1.03; 
Cooperative: $1.11; 
Wholesale: Whole: $1.47; 
Wholesale: 2%: $1.34; 
Wholesale: 1%: $1.26; 
Wholesale: Skim: $1.19; 
Retail: Whole: $2.98; 
Retail: 2%: $2.73; 
Retail: 1%: $2.69; 
Retail: Skim: $2.41.

Year: 2002; 
Month: December; 
Farm: $1.02; 
Cooperative: $1.11; 
Wholesale: Whole: $1.47; 
Wholesale: 2%: $1.35; 
Wholesale: 1%: $1.26; 
Wholesale: Skim: $1.20; 
Retail: Whole: $2.98; 
Retail: 2%: $2.76; 
Retail: 1%: $2.75; 
Retail: Skim: $2.50.

Average; 
Farm: $1.08; 
Cooperative: $1.16; 
Wholesale: Whole: $1.52; 
Wholesale: 2%: $1.39; 
Wholesale: 1%: $1.31; 
Wholesale: Skim: $1.24; 
Retail: Whole: $3.05; 
Retail: 2%: $2.74; 
Retail: 1%: $2.68; 
Retail: Skim: $2.50.

Year: 2003; 
Month: January; 
Farm: $1.03; 
Cooperative: $1.11; 
Wholesale: Whole: $1.47; 
Wholesale: 2%: $1.35; 
Wholesale: 1%: $1.26; 
Wholesale: Skim: $1.19; 
Retail: Whole: $3.12; 
Retail: 2%: $3.04; 
Retail: 1%: $2.91; 
Retail: Skim: $2.78.

Year: 2003; 
Month: February; 
Farm: $1.00; 
Cooperative: $1.08; 
Wholesale: Whole: $1.44; 
Wholesale: 2%: $1.32; 
Wholesale: 1%: $1.23; 
Wholesale: Skim: $1.17; 
Retail: Whole: $3.07; 
Retail: 2%: $2.92; 
Retail: 1%: $2.73; 
Retail: Skim: $2.53.

Year: 2003; 
Month: March; 
Farm: $0.96; 
Cooperative: $1.05; 
Wholesale: Whole: $1.42; 
Wholesale: 2%: $1.29; 
Wholesale: 1%: $1.21; 
Wholesale: Skim: $1.14; 
Retail: Whole: $2.97; 
Retail: 2%: $2.75; 
Retail: 1%: $2.66; 
Retail: Skim: $2.42.

Year: 2003; 
Month: April; 
Farm: $0.95; 
Cooperative: $1.03; 
Wholesale: Whole: $1.40; 
Wholesale: 2%: $1.27; 
Wholesale: 1%: $1.19; 
Wholesale: Skim: $1.12; 
Retail: Whole: $3.00; 
Retail: 2%: $2.93; 
Retail: 1%: $2.72; 
Retail: Skim: $2.49.

Year: 2003; 
Month: May; 
Farm: $0.95; 
Cooperative: $1.04; 
Wholesale: Whole: $1.44; 
Wholesale: 2%: $1.32; 
Wholesale: 1%: $1.23; 
Wholesale: Skim: $1.16; 
Retail: Whole: $2.94; 
Retail: 2%: $2.81; 
Retail: 1%: $2.66; 
Retail: Skim: $2.45.

Year: 2003; 
Month: June; 
Farm: $0.96; 
Cooperative: $1.04; 
Wholesale: Whole: $1.44; 
Wholesale: 2%: $1.32; 
Wholesale: 1%: $1.24; 
Wholesale: Skim: $1.17; 
Retail: Whole: $3.00; 
Retail: 2%: $2.82; 
Retail: 1%: $2.76; 
Retail: Skim: $2.54.

Year: 2003; 
Month: July; 
Farm: $0.95; 
Cooperative: $1.04; 
Wholesale: Whole: $1.45; 
Wholesale: 2%: $1.33; 
Wholesale: 1%: $1.24; 
Wholesale: Skim: $1.18; 
Retail: Whole: $3.07; 
Retail: 2%: $2.86; 
Retail: 1%: $2.82; 
Retail: Skim: $2.55.

Year: 2003; 
Month: August; 
Farm: $1.05; 
Cooperative: $1.15; 
Wholesale: Whole: $1.55; 
Wholesale: 2%: $1.43; 
Wholesale: 1%: $1.36; 
Wholesale: Skim: $1.28; 
Retail: Whole: $3.11; 
Retail: 2%: $2.93; 
Retail: 1%: $2.90; 
Retail: Skim: $2.65.

Year: 2003; 
Month: September; 
Farm: $1.29; 
Cooperative: $1.38; 
Wholesale: Whole: $1.81; 
Wholesale: 2%: $1.69; 
Wholesale: 1%: $1.63; 
Wholesale: Skim: $1.54; 
Retail: Whole: $3.22; 
Retail: 2%: $3.00; 
Retail: 1%: $3.01; 
Retail: Skim: $2.72.

Year: 2003; 
Month: October; 
Farm: $1.34; 
Cooperative: $1.43; 
Wholesale: Whole: $1.85; 
Wholesale: 2%: $1.72; 
Wholesale: 1%: $1.88; 
Wholesale: Skim: $1.58; 
Retail: Whole: $3.06; 
Retail: 2%: $2.98; 
Retail: 1%: $2.97; 
Retail: Skim: $2.69.

Year: 2003; 
Month: November; 
Farm: $1.35; 
Cooperative: $1.44; 
Wholesale: Whole: $1.86; 
Wholesale: 2%: $1.73; 
Wholesale: 1%: $1.82; 
Wholesale: Skim: $1.59; 
Retail: Whole: $3.10; 
Retail: 2%: $2.89; 
Retail: 1%: $2.93; 
Retail: Skim: $2.63.

Year: 2003; 
Month: December; 
Farm: $1.30; 
Cooperative: $1.39; 
Wholesale: Whole: $1.82; 
Wholesale: 2%: $1.69; 
Wholesale: 1%: $1.99; 
Wholesale: Skim: $1.55; 
Retail: Whole: $2.75; 
Retail: 2%: $2.62; 
Retail: 1%: $2.49; 
Retail: Skim: $2.39.

Average; 
Farm: $1.09; 
Cooperative: $1.18; 
Wholesale: Whole: $1.58; 
Wholesale: 2%: $1.46; 
Wholesale: 1%: $1.44; 
Wholesale: Skim: $1.31; 
Retail: Whole: $3.03; 
Retail: 2%: $2.88; 
Retail: 1%: $2.80; 
Retail: Skim: $2.57.

Year: 2004; 
Month: January; 
Farm: $1.13; 
Cooperative: $1.22; 
Wholesale: Whole: $1.69; 
Wholesale: 2%: $1.56; 
Wholesale: 1%: $1.92; 
Wholesale: Skim: $1.42; 
Retail: Whole: $2.59; 
Retail: 2%: $2.56; 
Retail: 1%: $2.47; 
Retail: Skim: $2.37.

Year: 2004; 
Month: February; 
Farm: $1.10; 
Cooperative: $1.20; 
Wholesale: Whole: $1.65; 
Wholesale: 2%: $1.53; 
Wholesale: 1%: $1.72; 
Wholesale: Skim: $1.38; 
Retail: Whole: $2.81; 
Retail: 2%: $2.50; 
Retail: 1%: $2.45; 
Retail: Skim: $2.33.

Year: 2004; 
Month: March; 
Farm: $1.13; 
Cooperative: $1.23; 
Wholesale: Whole: $1.73; 
Wholesale: 2%: $1.60; 
Wholesale: 1%: $1.67; 
Wholesale: Skim: $1.44; 
Retail: Whole: $2.44; 
Retail: 2%: $2.46; 
Retail: 1%: $2.32; 
Retail: Skim: $2.16.

Year: 2004; 
Month: April; 
Farm: $1.28; 
Cooperative: $1.38; 
Wholesale: Whole: $1.90; 
Wholesale: 2%: $1.76; 
Wholesale: 1%: $1.68; 
Wholesale: Skim: $1.64; 
Retail: Whole: $2.56; 
Retail: 2%: $2.53; 
Retail: 1%: $2.46; 
Retail: Skim: $2.32.

Year: 2004; 
Month: May; 
Farm: $1.80; 
Cooperative: $1.89; 
Wholesale: Whole: $2.38; 
Wholesale: 2%: $2.24; 
Wholesale: 1%: $1.96; 
Wholesale: Skim: $2.13; 
Retail: Whole: $3.06; 
Retail: 2%: $2.88; 
Retail: 1%: $2.82; 
Retail: Skim: $2.61.

Average; 
Farm: $1.29; 
Cooperative: $1.38; 
Wholesale: Whole: $1.87; 
Wholesale: 2%: $1.74; 
Wholesale: 1%: $1.79; 
Wholesale: Skim: $1.60; 
Retail: Whole: $2.69; 
Retail: 2%: $2.59; 
Retail: 1%: $2.50; 
Retail: Skim: $2.36.

Source: GAO's analysis of price data provided by USDA, the Defense 
Commissary Agency, and Information Resources, Inc.

Note: For the Seattle market, the farm price is the USDA-estimated farm 
Class I price for 3.5 percent milkfat content; the cooperative price is 
the announced cooperative Class I price for Seattle for 3.5 percent 
milkfat content; the wholesale price is the average of the prices paid 
by the commissaries at the Naval Station Everett, Smokey Point Support 
Center; Fort Lewis; and McChord Air Force Base, adjusted for a 5 
percent markup; and the retail price is the price collected by 
Information Resources, Inc., for the Seattle market. Prices may not 
average due to rounding.

[End of table]

Table 25: Prices for a Gallon of Milk in Washington, D.C., October 2000 
through May 2004: 

Year: 2000; 
Month: October; 
Farm: $1.32; 
Cooperative: $1.40; 
Wholesale: Whole: $1.66; 
Wholesale: 2%: $1.51; 
Wholesale: 1%: $1.49; 
Wholesale: Skim: $1.42; 
Retail: Whole: $2.10; 
Retail: 2%: $2.10; 
Retail: 1%: $2.09; 
Retail: Skim: $1.94.

Year: 2000; 
Month: November; 
Farm: $1.33; 
Cooperative: $1.41; 
Wholesale: Whole: $1.66; 
Wholesale: 2%: $1.50; 
Wholesale: 1%: $1.49; 
Wholesale: Skim: $1.42; 
Retail: Whole: $2.09; 
Retail: 2%: $2.10; 
Retail: 1%: $2.09; 
Retail: Skim: $1.94.

Year: 2000; 
Month: December; 
Farm: $1.36; 
Cooperative: $1.44; 
Wholesale: Whole: $1.68; 
Wholesale: 2%: $1.53; 
Wholesale: 1%: $1.51; 
Wholesale: Skim: $1.43; 
Retail: Whole: $2.11; 
Retail: 2%: $2.12; 
Retail: 1%: $2.11; 
Retail: Skim: $1.97.

Average; 
Farm: $1.34; 
Cooperative: $1.42; 
Wholesale: Whole: $1.67; 
Wholesale: 2%: $1.51; 
Wholesale: 1%: $1.50; 
Wholesale: Skim: $1.42; 
Retail: Whole: $2.10; 
Retail: 2%: $2.11; 
Retail: 1%: $2.10; 
Retail: Skim: $1.95.

Year: 2001; 
Month: January; 
Farm: $1.54; 
Cooperative: $1.62; 
Wholesale: Whole: $1.83; 
Wholesale: 2%: $1.67; 
Wholesale: 1%: $1.62; 
Wholesale: Skim: $1.54; 
Retail: Whole: $2.21; 
Retail: 2%: $2.24; 
Retail: 1%: $2.22; 
Retail: Skim: $2.05.

Year: 2001; 
Month: February; 
Farm: $1.36; 
Cooperative: $1.44; 
Wholesale: Whole: $1.67; 
Wholesale: 2%: $1.52; 
Wholesale: 1%: $1.53; 
Wholesale: Skim: $1.44; 
Retail: Whole: $2.22; 
Retail: 2%: $2.25; 
Retail: 1%: $2.23; 
Retail: Skim: $2.04.

Year: 2001; 
Month: March; 
Farm: $1.43; 
Cooperative: $1.50; 
Wholesale: Whole: $1.73; 
Wholesale: 2%: $1.57; 
Wholesale: 1%: $1.57; 
Wholesale: Skim: $1.48; 
Retail: Whole: $2.21; 
Retail: 2%: $2.23; 
Retail: 1%: $2.22; 
Retail: Skim: $2.05.

Year: 2001; 
Month: April; 
Farm: $1.49; 
Cooperative: $1.57; 
Wholesale: Whole: $1.79; 
Wholesale: 2%: $1.64; 
Wholesale: 1%: $1.61; 
Wholesale: Skim: $1.52; 
Retail: Whole: $2.25; 
Retail: 2%: $2.27; 
Retail: 1%: $2.27; 
Retail: Skim: $2.10.

Year: 2001; 
Month: May; 
Farm: $1.56; 
Cooperative: $1.63; 
Wholesale: Whole: $1.86; 
Wholesale: 2%: $1.70; 
Wholesale: 1%: $1.66; 
Wholesale: Skim: $1.58; 
Retail: Whole: $2.29; 
Retail: 2%: $2.31; 
Retail: 1%: $2.32; 
Retail: Skim: $2.15.

Year: 2001; 
Month: June; 
Farm: $1.63; 
Cooperative: $1.70; 
Wholesale: Whole: $1.93; 
Wholesale: 2%: $1.77; 
Wholesale: 1%: $1.72; 
Wholesale: Skim: $1.65; 
Retail: Whole: $2.32; 
Retail: 2%: $2.31; 
Retail: 1%: $2.30; 
Retail: Skim: $2.13.

Year: 2001; 
Month: July; 
Farm: $1.63; 
Cooperative: $1.71; 
Wholesale: Whole: $1.96; 
Wholesale: 2%: $1.80; 
Wholesale: 1%: $1.74; 
Wholesale: Skim: $1.68; 
Retail: Whole: $2.29; 
Retail: 2%: $2.27; 
Retail: 1%: $2.25; 
Retail: Skim: $2.10.

Year: 2001; 
Month: August; 
Farm: $1.64; 
Cooperative: $1.71; 
Wholesale: Whole: $1.96; 
Wholesale: 2%: $1.80; 
Wholesale: 1%: $1.74; 
Wholesale: Skim: $1.68; 
Retail: Whole: $2.29; 
Retail: 2%: $2.28; 
Retail: 1%: $2.26; 
Retail: Skim: $2.10.

Year: 2001; 
Month: September; 
Farm: $1.65; 
Cooperative: $1.72; 
Wholesale: Whole: $1.97; 
Wholesale: 2%: $1.80; 
Wholesale: 1%: $1.75; 
Wholesale: Skim: $1.69; 
Retail: Whole: $2.31; 
Retail: 2%: $2.31; 
Retail: 1%: $2.30; 
Retail: Skim: $2.13.

Year: 2001; 
Month: October; 
Farm: $1.68; 
Cooperative: $1.76; 
Wholesale: Whole: $1.99; 
Wholesale: 2%: $1.83; 
Wholesale: 1%: $1.78; 
Wholesale: Skim: $1.71; 
Retail: Whole: $2.37; 
Retail: 2%: $2.35; 
Retail: 1%: $2.34; 
Retail: Skim: $2.17.

Year: 2001; 
Month: November; 
Farm: $1.69; 
Cooperative: $1.77; 
Wholesale: Whole: $1.99; 
Wholesale: 2%: $1.83; 
Wholesale: 1%: $1.79; 
Wholesale: Skim: $1.74; 
Retail: Whole: $2.38; 
Retail: 2%: $2.39; 
Retail: 1%: $2.40; 
Retail: Skim: $2.25.

Year: 2001; 
Month: December; 
Farm: $1.37; 
Cooperative: $1.44; 
Wholesale: Whole: $1.73; 
Wholesale: 2%: $1.57; 
Wholesale: 1%: $1.60; 
Wholesale: Skim: $1.60; 
Retail: Whole: $2.35; 
Retail: 2%: $2.36; 
Retail: 1%: $2.35; 
Retail: Skim: $2.19.

Average; 
Farm: $1.56; 
Cooperative: $1.63; 
Wholesale: Whole: $1.87; 
Wholesale: 2%: $1.71; 
Wholesale: 1%: $1.68; 
Wholesale: Skim: $1.61; 
Retail: Whole: $2.29; 
Retail: 2%: $2.30; 
Retail: 1%: $2.29; 
Retail: Skim: $2.12.

Year: 2002; 
Month: January; 
Farm: $1.37; 
Cooperative: $1.44; 
Wholesale: Whole: $1.71; 
Wholesale: 2%: $1.54; 
Wholesale: 1%: $1.53; 
Wholesale: Skim: $1.55; 
Retail: Whole: $2.36; 
Retail: 2%: $2.36; 
Retail: 1%: $2.35; 
Retail: Skim: $2.18.

Year: 2002; 
Month: February; 
Farm: $1.37; 
Cooperative: $1.44; 
Wholesale: Whole: $1.68; 
Wholesale: 2%: $1.52; 
Wholesale: 1%: $1.52; 
Wholesale: Skim: $1.52; 
Retail: Whole: $2.33; 
Retail: 2%: $2.33; 
Retail: 1%: $2.32; 
Retail: Skim: $2.15.

Year: 2002; 
Month: March; 
Farm: $1.34; 
Cooperative: $1.41; 
Wholesale: Whole: $1.65; 
Wholesale: 2%: $1.49; 
Wholesale: 1%: $1.50; 
Wholesale: Skim: $1.50; 
Retail: Whole: $2.30; 
Retail: 2%: $2.31; 
Retail: 1%: $2.30; 
Retail: Skim: $2.15.

Year: 2002; 
Month: April; 
Farm: $1.33; 
Cooperative: $1.40; 
Wholesale: Whole: $1.64; 
Wholesale: 2%: $1.48; 
Wholesale: 1%: $1.43; 
Wholesale: Skim: $1.49; 
Retail: Whole: $2.30; 
Retail: 2%: $2.30; 
Retail: 1%: $2.30; 
Retail: Skim: $2.14.

Year: 2002; 
Month: May; 
Farm: $1.31; 
Cooperative: $1.38; 
Wholesale: Whole: $1.63; 
Wholesale: 2%: $1.46; 
Wholesale: 1%: $1.42; 
Wholesale: Skim: $1.48; 
Retail: Whole: $2.32; 
Retail: 2%: $2.31; 
Retail: 1%: $2.32; 
Retail: Skim: $2.16.

Year: 2002; 
Month: June; 
Farm: $1.29; 
Cooperative: $1.36; 
Wholesale: Whole: $1.61; 
Wholesale: 2%: $1.44; 
Wholesale: 1%: $1.40; 
Wholesale: Skim: $1.46; 
Retail: Whole: $2.29; 
Retail: 2%: $2.27; 
Retail: 1%: $2.27; 
Retail: Skim: $2.12.

Year: 2002; 
Month: July; 
Farm: $1.25; 
Cooperative: $1.32; 
Wholesale: Whole: $1.57; 
Wholesale: 2%: $1.41; 
Wholesale: 1%: $1.37; 
Wholesale: Skim: $1.44; 
Retail: Whole: $2.31; 
Retail: 2%: $2.29; 
Retail: 1%: $2.29; 
Retail: Skim: $2.13.

Year: 2002; 
Month: August; 
Farm: $1.24; 
Cooperative: $1.31; 
Wholesale: Whole: $1.56; 
Wholesale: 2%: $1.40; 
Wholesale: 1%: $1.36; 
Wholesale: Skim: $1.43; 
Retail: Whole: $2.29; 
Retail: 2%: $2.27; 
Retail: 1%: $2.28; 
Retail: Skim: $2.13.

Year: 2002; 
Month: September; 
Farm: $1.24; 
Cooperative: $1.31; 
Wholesale: Whole: $1.56; 
Wholesale: 2%: $1.40; 
Wholesale: 1%: $1.36; 
Wholesale: Skim: $1.43; 
Retail: Whole: $2.27; 
Retail: 2%: $2.27; 
Retail: 1%: $2.29; 
Retail: Skim: $2.13.

Year: 2002; 
Month: October; 
Farm: $1.21; 
Cooperative: $1.28; 
Wholesale: Whole: $1.54; 
Wholesale: 2%: $1.37; 
Wholesale: 1%: $1.34; 
Wholesale: Skim: $1.41; 
Retail: Whole: $2.25; 
Retail: 2%: $2.25; 
Retail: 1%: $2.27; 
Retail: Skim: $2.12.

Year: 2002; 
Month: November; 
Farm: $1.25; 
Cooperative: $1.32; 
Wholesale: Whole: $1.57; 
Wholesale: 2%: $1.41; 
Wholesale: 1%: $1.37; 
Wholesale: Skim: $1.44; 
Retail: Whole: $2.19; 
Retail: 2%: $2.20; 
Retail: 1%: $2.22; 
Retail: Skim: $2.08.

Year: 2002; 
Month: December; 
Farm: $1.24; 
Cooperative: $1.32; 
Wholesale: Whole: $1.56; 
Wholesale: 2%: $1.40; 
Wholesale: 1%: $1.36; 
Wholesale: Skim: $1.43; 
Retail: Whole: $2.24; 
Retail: 2%: $2.25; 
Retail: 1%: $2.24; 
Retail: Skim: $2.09.

Average; 
Farm: $1.29; 
Cooperative: $1.36; 
Wholesale: Whole: $1.61; 
Wholesale: 2%: $1.44; 
Wholesale: 1%: $1.41; 
Wholesale: Skim: $1.47; 
Retail: Whole: $2.29; 
Retail: 2%: $2.28; 
Retail: 1%: $2.29; 
Retail: Skim: $2.13.

Year: 2003; 
Month: January; 
Farm: $1.24; 
Cooperative: $1.32; 
Wholesale: Whole: $1.56; 
Wholesale: 2%: $1.40; 
Wholesale: 1%: $1.36; 
Wholesale: Skim: $1.43; 
Retail: Whole: $2.20; 
Retail: 2%: $2.22; 
Retail: 1%: $2.20; 
Retail: Skim: $2.06.

Year: 2003; 
Month: February; 
Farm: $1.20; 
Cooperative: $1.28; 
Wholesale: Whole: $1.53; 
Wholesale: 2%: $1.37; 
Wholesale: 1%: $1.33; 
Wholesale: Skim: $1.41; 
Retail: Whole: $2.19; 
Retail: 2%: $2.23; 
Retail: 1%: $2.22; 
Retail: Skim: $2.08.

Year: 2003; 
Month: March; 
Farm: $1.17; 
Cooperative: $1.24; 
Wholesale: Whole: $1.50; 
Wholesale: 2%: $1.33; 
Wholesale: 1%: $1.30; 
Wholesale: Skim: $1.38; 
Retail: Whole: $2.18; 
Retail: 2%: $2.19; 
Retail: 1%: $2.20; 
Retail: Skim: $2.06.

Year: 2003; 
Month: April; 
Farm: $1.17; 
Cooperative: $1.24; 
Wholesale: Whole: $1.48; 
Wholesale: 2%: $1.32; 
Wholesale: 1%: $1.29; 
Wholesale: Skim: $1.38; 
Retail: Whole: $2.22; 
Retail: 2%: $2.22; 
Retail: 1%: $2.21; 
Retail: Skim: $2.07.

Year: 2003; 
Month: May; 
Farm: $1.17; 
Cooperative: $1.25; 
Wholesale: Whole: $1.49; 
Wholesale: 2%: $1.33; 
Wholesale: 1%: $1.30; 
Wholesale: Skim: $1.38; 
Retail: Whole: $2.23; 
Retail: 2%: $2.22; 
Retail: 1%: $2.22; 
Retail: Skim: $2.07.

Year: 2003; 
Month: June; 
Farm: $1.18; 
Cooperative: $1.25; 
Wholesale: Whole: $1.49; 
Wholesale: 2%: $1.33; 
Wholesale: 1%: $1.30; 
Wholesale: Skim: $1.38; 
Retail: Whole: $2.25; 
Retail: 2%: $2.22; 
Retail: 1%: $2.20; 
Retail: Skim: $2.06.

Year: 2003; 
Month: July; 
Farm: $1.19; 
Cooperative: $1.26; 
Wholesale: Whole: $1.50; 
Wholesale: 2%: $1.34; 
Wholesale: 1%: $1.30; 
Wholesale: Skim: $1.39; 
Retail: Whole: $2.28; 
Retail: 2%: $2.23; 
Retail: 1%: $2.20; 
Retail: Skim: $2.07.

Year: 2003; 
Month: August; 
Farm: $1.29; 
Cooperative: $1.36; 
Wholesale: Whole: $1.58; 
Wholesale: 2%: $1.43; 
Wholesale: 1%: $1.38; 
Wholesale: Skim: $1.45; 
Retail: Whole: $2.34; 
Retail: 2%: $2.29; 
Retail: 1%: $2.27; 
Retail: Skim: $2.14.

Year: 2003; 
Month: September; 
Farm: $1.52; 
Cooperative: $1.60; 
Wholesale: Whole: $1.74; 
Wholesale: 2%: $1.61; 
Wholesale: 1%: $1.55; 
Wholesale: Skim: $1.59; 
Retail: Whole: $2.50; 
Retail: 2%: $2.47; 
Retail: 1%: $2.42; 
Retail: Skim: $2.28.

Year: 2003; 
Month: October; 
Farm: $1.57; 
Cooperative: $1.65; 
Wholesale: Whole: $1.86; 
Wholesale: 2%: $1.70; 
Wholesale: 1%: $1.65; 
Wholesale: Skim: $1.71; 
Retail: Whole: $2.58; 
Retail: 2%: $2.53; 
Retail: 1%: $2.51; 
Retail: Skim: $2.35.

Year: 2003; 
Month: November; 
Farm: $1.58; 
Cooperative: $1.66; 
Wholesale: Whole: $1.87; 
Wholesale: 2%: $1.71; 
Wholesale: 1%: $1.66; 
Wholesale: Skim: $1.72; 
Retail: Whole: $2.59; 
Retail: 2%: $2.53; 
Retail: 1%: $2.50; 
Retail: Skim: $2.34.

Year: 2003; 
Month: December; 
Farm: $1.53; 
Cooperative: $1.61; 
Wholesale: Whole: $1.83; 
Wholesale: 2%: $1.67; 
Wholesale: 1%: $1.63; 
Wholesale: Skim: $1.70; 
Retail: Whole: $2.59; 
Retail: 2%: $2.55; 
Retail: 1%: $2.52; 
Retail: Skim: $2.37.

Average; 
Farm: $1.32; 
Cooperative: $1.39; 
Wholesale: Whole: $1.62; 
Wholesale: 2%: $1.46; 
Wholesale: 1%: $1.42; 
Wholesale: Skim: $1.49; 
Retail: Whole: $2.35; 
Retail: 2%: $2.33; 
Retail: 1%: $2.31; 
Retail: Skim: $2.16.

Year: 2004; 
Month: January; 
Farm: $1.36; 
Cooperative: $1.44; 
Wholesale: Whole: $1.69; 
Wholesale: 2%: $1.53; 
Wholesale: 1%: $1.49; 
Wholesale: Skim: $1.58; 
Retail: Whole: $2.59; 
Retail: 2%: $2.54; 
Retail: 1%: $2.51; 
Retail: Skim: $2.36.

Year: 2004; 
Month: February; 
Farm: $1.34; 
Cooperative: $1.42; 
Wholesale: Whole: $1.66; 
Wholesale: 2%: $1.50; 
Wholesale: 1%: $1.46; 
Wholesale: Skim: $1.55; 
Retail: Whole: $2.56; 
Retail: 2%: $2.50; 
Retail: 1%: $2.48; 
Retail: Skim: $2.33.

Year: 2004; 
Month: March; 
Farm: $1.37; 
Cooperative: $1.45; 
Wholesale: Whole: $1.66; 
Wholesale: 2%: $1.50; 
Wholesale: 1%: $1.45; 
Wholesale: Skim: $1.54; 
Retail: Whole: $2.53; 
Retail: 2%: $2.48; 
Retail: 1%: $2.45; 
Retail: Skim: $2.31.

Year: 2004; 
Month: April; 
Farm: $1.51; 
Cooperative: $1.59; 
Wholesale: Whole: $1.82; 
Wholesale: 2%: $1.66; 
Wholesale: 1%: $1.61; 
Wholesale: Skim: $1.66; 
Retail: Whole: $2.58; 
Retail: 2%: $2.49; 
Retail: 1%: $2.43; 
Retail: Skim: $2.25.

Year: 2004; 
Month: May; 
Farm: $2.03; 
Cooperative: $2.11; 
Wholesale: Whole: $2.28; 
Wholesale: 2%: $2.12; 
Wholesale: 1%: $2.05; 
Wholesale: Skim: $2.04; 
Retail: Whole: $2.90; 
Retail: 2%: $2.78; 
Retail: 1%: $2.72; 
Retail: Skim: $2.51.

Average; 
Farm: $1.52; 
Cooperative: $1.60; 
Wholesale: Whole: $1.82; 
Wholesale: 2%: $1.66; 
Wholesale: 1%: $1.61; 
Wholesale: Skim: $1.67; 
Retail: Whole: $2.63; 
Retail: 2%: $2.56; 
Retail: 1%: $2.52; 
Retail: Skim: $2.35. 

[End of table]

Source: GAO's analysis of price data provided by USDA, the Defense 
Commissary Agency, and Information Resources, Inc.

Note: For the Washington, D.C., market, the farm price is the USDA-
estimated farm Class I price for 3.5 percent milkfat content; the 
cooperative price is the announced cooperative Class I price for 
Washington, D.C., for 3.5 percent milkfat content; the wholesale price 
is the average of the prices paid by the commissaries at Bolling Air 
Force Base; Walter Reed Army Medical Center; Fort Myer; Fort Belvoir; 
the Marine Corps Base, Quantico; Andrews Air Force Base; Aberdeen 
Proving Ground; the Naval Station, Annapolis; Fort Meade; and Fort 
Detrick, adjusted for a 5 percent markup; and the retail price is the 
price collected by Information Resources, Inc., for the Washington, 
D.C., market. Prices may not average due to rounding.

[End of section]

Appendix V: Factors That Influence the Price of Milk as It Moves from 
the Farm to the Consumer: 

The prices that farmers, cooperatives, wholesale processors, and 
retailers receive are determined by the interaction of many factors, 
such as forces affecting the supply of raw milk and manufactured and 
fluid milk products, consumer demand for manufactured and fluid milk 
products, federal and state dairy programs, the level of services 
provided by dairy cooperatives, market structure at various levels of 
the marketing chain, and other input costs of processing and retailing. 
Dairy farmers receive a price for raw milk, and each entity involved in 
the processing and marketing of fluid milk adds value to the product 
and retains a portion of the difference between the farm and retail 
prices. (This difference is known as the price spread.) This appendix 
examines the key factors that influence milk prices at the different 
levels of the marketing chain.

Market Forces, in Addition to Federal and State Policies, Influence 
Milk Prices at the Farm Level: 

Supply and demand forces, which in turn are influenced by federal and 
state dairy programs, determine farm prices for the raw milk that is 
sold for use in fluid milk and other dairy products.[Footnote 36] For 
example, in recent months, a variety of supply and demand forces have 
come together to significantly increase farm milk prices. On the supply 
side, the available supply of raw milk has been reduced by farmers 
cutting back production due to a previous period of low prices and by 
the closing of the Canadian border to replacement cows as a result of 
concerns about mad cow disease.[Footnote 37] On the demand side, 
consumer demand for nonfluid dairy products has increased as consumers 
resumed eating out following the attacks of September 11, 2001, and as 
dietary trends, such as the rising popularity of low-carbohydrate 
diets, have changed. While these forces have been driving recent price 
trends, federal and state dairy programs continue to influence milk 
prices. For example, major domestic programs such as federal milk 
marketing orders (FMMOs) and price supports help individual farmers who 
lack market power compared to other entities such as wholesale 
processors and retailers and help to ensure that farm prices do not 
fall below a minimum level. At the same time, U.S. import restrictions 
maintain domestic dairy prices at levels higher than average 
international market prices by limiting the quantities of milk products 
that are imported into the country.

Supply and Demand Forces Affect Farm Milk Prices: 

The quantity of raw milk that dairy farmers supply (production) is 
determined by the operating costs of producing that milk, such as feed 
and fuel,[Footnote 38] ownership costs for dairying equipment,[Footnote 
39] land costs, and labor costs, as well as the price that farmers 
expect to receive for milk (as based on demand). Of these costs, the 
2002 annual report on the costs of milk production in California, the 
largest milk producing state, showed that the highest cost is feed, at 
44 percent of milk production costs. Other major costs include 
replacement cows (14 percent), other operating expenses (13 percent), 
and labor (11 percent).[Footnote 40] Milk production can also vary 
seasonally, according to weather, and is affected by farmers' 
management practices.

In February 2004, the U.S. Department of Agriculture (USDA) published a 
report on the characteristics and costs of milk production in the 
United States, which found that dairy farmers in the West had a cost 
advantage over farmers in other regions because western operations were 
appreciably larger.[Footnote 41] Farms with 500 or more milk cows had 
substantially lower total operating and ownership costs, averaging 
$11.60 per hundredweight of milk sold. This cost advantage arises 
because as herd size increases, associated increases in fixed costs, 
such as capital investments, are spread proportionally over a larger 
amount of production, thereby lowering the fixed costs per 
hundredweight of milk produced. USDA found that the average herd size 
of low-cost operations was more than three times the size of high-cost 
operations.[Footnote 42] Table 26 shows the average ownership and 
operating costs by region and herd size in 2000.

Table 26: Average Ownership and Operating Costs by Region and Herd 
Size, 2000: 

Region: Arizona/Las Vegas, Pacific Northwest, California[A]; 
Ownership and operating costs per hundredweight: $11.58.

Region: Upper Midwest[B]; 
Ownership and operating costs per hundredweight: $14.40.

Region: Northeast[C]; 
Ownership and operating costs per hundredweight: $14.44.

Region: Central[D]; 
Ownership and operating costs per hundredweight: $18.09.

Region: Mideast/Southeast[E];
Ownership and operating costs per hundredweight: $18.23.

Herd size: Small (<50); 
Ownership and operating costs per hundredweight: $17.98.

Herd size: Medium (50-199); 
Ownership and operating costs per hundredweight: $15.16.

Herd size: Large (200-499); 
Ownership and operating costs per hundredweight: $13.32.

Herd size: Industrial (>500); 
Ownership and operating costs per hundredweight: $11.60.

Source: USDA.

[A] States in this survey region included parts of Arizona, California, 
Idaho, Oregon, and Washington.

[B] States in this survey region included Michigan and Wisconsin and 
part of Minnesota.

[C] States in this survey region included Connecticut, Maine, 
Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and 
Vermont and parts of Maryland, Ohio, and Pennsylvania.

[D] States in this survey region included Illinois, Indiana, and Iowa 
and parts of Kentucky, Minnesota, Missouri, Nebraska, Ohio, and South 
Dakota.

[E] States in this survey region included West Virginia and parts of 
Alabama, Arkansas, Georgia, Kentucky, Missouri, North Carolina, Ohio, 
Oklahoma, Pennsylvania, Tennessee, and Virginia.

[End of table]

The USDA study also reported that while milk is produced in all 50 
states, the top 5 milk-producing states in 2000--California, Wisconsin, 
New York, Pennsylvania, and Minnesota--accounted for 53 percent of 
total milk produced. Growth in the importance of western regions as 
major sources of milk over the past 25 years is a significant feature 
of the United States dairy industry. For example, in 1975, midwestern 
states such as Iowa, Ohio, and Missouri were prominent among the top 10 
dairy producing states. By 2000, production in Idaho, New Mexico, and 
Washington State surpassed production in these traditional dairy 
states. Milk production is consolidating so that farms with larger 
numbers of cows account for a growing share of production. In 1993, 
farms with 100 or more cows accounted for 14 percent of all U.S. dairy 
farms, over half of all cows, and over 55 percent of the milk produced. 
As of 2000, these numbers had grown to 20 percent of all dairy farms, 
66 percent of all cows, and more than 70 percent of milk produced. 
Significantly, farms with 500 or more cows accounted for 3 percent of 
all dairy farms, but 35 percent of cows and 31 percent of milk produced 
in 2000.

The production of milk has unique characteristics that distinguish it 
from other agricultural products and that cause relatively small 
changes in supply or demand to result in relatively large changes in 
price, particularly at the farm level. Farmers employ specialized 
assets or equipment to produce milk, and they have limited ability to 
use their farms, cows, and equipment for other purposes during periods 
of low prices. This limited flexibility creates a relatively inelastic 
supply of milk with respect to price.[Footnote 43]

Demand for raw milk is mainly derived from consumer demand for fluid 
milk and manufactured milk products.[Footnote 44] Consumer demand for 
different fluid or manufactured milk products affects the price of raw 
milk used for other products because increased consumer demand for one 
particular product-causing more of that product to be produced--reduces 
the supply of raw milk available for other products, thus increasing 
the price that manufacturers of other products must pay to acquire raw 
milk. Over the long term, per capita demand for fluid milk products has 
been steadily declining, in large part because consumers have 
substituted carbonated soft drinks and other beverages for fluid milk. 
On the other hand, consumer demand for milk products has varied based 
on dietary considerations, such as the rising popularity of low-
carbohydrate diets and changes in food consumption patterns, such as an 
increase in the amount of food consumed away from the home. Despite 
some evidence that consumer demand for fluid milk has become more 
price elastic, it remains relatively price inelastic compared to the 
demand for many other products.[Footnote 45]

Given the relative inelasticities of milk supply and demand with 
respect to price, a number of sources indicated that recent changes in 
the amount of raw milk produced, when combined with changes in demand, 
have affected farm prices. After late 1999, farm prices began falling 
in response to the production surplus that existed at that time. In 
addition, a number of dairy experts indicated that following the 
terrorist attacks of September 11, 2001, prices began to fall even 
further as people stopped eating out as much, thereby reducing the 
demand for manufactured milk products such as cheese.[Footnote 46] This 
reduced consumption compounded the long-term decline in demand for 
fluid milk products. USDA reported that the combination of these supply 
and demand factors was responsible for the low farm prices that 
occurred during 2002 and 2003.

More recently, however, supply and demand conditions have changed to 
produce record high farm prices in 2004. For example, in response to 
low prices during 2002 and 2003, some farmers began to cut back on 
production by reducing the sizes of their herds. However, with the 
relative price inelasticity of milk supplies, one academic expert noted 
that it can take 12 to 18 months to achieve a supply response to low 
prices. During this time, the identification of a cow infected with mad 
cow disease in Alberta, Canada, in May 2003, led to a temporary U.S. 
ban on imports of Canadian beef and cattle. This ban included live 
animals, some of which would have been used as replacement cows in U.S. 
dairy herds. While some beef imports have resumed, USDA has not lifted 
restrictions on imports of live cattle.[Footnote 47] Consequently, in 
June 2004, a report by USDA's Economic Research Service noted that with 
relatively few expansions in late 2003 and the tight supplies of 
replacement cows, few dairy farmers could increase production in 
response to rising milk prices, a response that usually limits price 
increases.[Footnote 48]

Another factor in reducing milk production has been the lower amount of 
bST--a hormone used in milk production--available to U.S. 
farmers.[Footnote 49] USDA reported that about 2 percent of the U.S. 
milk supply can be attributed to the use of bST.[Footnote 50] However, 
in January 2004, Monsanto, the maker of the hormone, announced that its 
customers would receive only half their normal supply. This reduced 
availability began March 1 and is expected to continue through the end 
of 2004. Additionally, drought conditions in recent years have led to 
higher feed costs and have negatively affected the quality of the 
feed.[Footnote 51] Finally, some sources identified the National Milk 
Producers Federation's Cooperatives Working Together program as another 
factor leading to reduced raw milk supplies.[Footnote 52] Since the 
program began in July 2003, cooperatives have tried to reduce raw milk 
supplies by eliminating some dairy herds, decreasing production, and 
increasing exports. USDA estimates indicate that from January through 
June 2004, milk production in the top 20 dairy producing states 
averaged about 1 percent below production levels during the same period 
in 2003.

While these factors combined to reduce the available supply of raw 
milk, dairy experts indicated that demand for manufactured milk 
products has recovered during 2004. In part, they cited a general 
economic recovery as contributing to this increased demand. They also 
indicated that people have returned to consuming more food away from 
home, as they did prior to September 11, 2001. This recovery in demand, 
coming at a time of reduced milk supplies, pushed farm prices to record 
high levels in April and May of 2004. For example, USDA's market-based 
announced minimum price for milk to be used in manufactured products, 
such as cheese, was $19.66 and $20.58 per hundredweight in April and 
May of 2004, respectively. These prices compare with $9.41 and $9.71 
per hundredweight for April and May of 2003. More recently, these high 
prices have started to moderate; the comparable announced minimum price 
for June 2004 was $17.68. However, USDA has estimated that average 2004 
farm-level prices will be more than $3 per hundredweight higher than 
they were in 2003.

Federal and State Dairy Programs and Policies Influence Farm Prices: 

A complex system of programs and policies influences the price of raw 
milk used to produce fluid milk and manufactured products. USDA's milk 
marketing orders, as well as some states' dairy programs, attempt to 
stabilize milk marketing conditions by establishing minimum raw milk 
prices and other marketing rules, thus, these programs assist 
individual farmers and dairy cooperatives, which lack the market power 
of other entities such as wholesale milk processors.[Footnote 53] 
USDA's price support program attempts to ensure that farm prices do not 
fall below a minimum level, and, together with the Milk Income Loss 
Contract (MILC) program, provides a safety net for individual farmers 
during periods of low prices. These programs and other federal dairy 
policies operate in a broader context of trade restrictions, which can 
limit competition from imported dairy products and maintain U.S. prices 
above average international market prices.

Federal and State Milk Marketing Orders: 

In 2003, the price of about 67 percent of the fluid grade milk marketed 
by dairy farmers in the United States was regulated under the FMMO 
program, created in 1933 and administered by USDA.[Footnote 54] Under 
this program, USDA uses national dairy market price information to set 
the minimum prices that must be paid by processors for raw fluid grade 
milk in specified marketing areas, or orders.[Footnote 55] Figure 32 
shows a map of the current 10 FMMOs.

Figure 32: Map of Federal Milk Marketing Orders: 

[See PDF for image] 

[End of figure] 

Under the FMMO program, USDA has a classified pricing system for 
setting minimum prices for milk on a monthly basis, based upon the 
intended use of the milk, as shown in table 27. While there is some 
variation among the methods used for setting prices in different 
orders, in general, FMMO class prices are determined by formulas with 
milk component values derived from wholesale dairy product prices. For 
example, Class III formulas use weekly average butter, cheese, and dry 
whey prices to determine values on a monthly basis for butterfat, 
protein, and nonfat solids. The Class IV formulas use weekly average 
butter and nonfat dry milk prices to determine values on a monthly 
basis for butterfat and nonfat solids, respectively. The Class II price 
is determined by adding a fixed amount--a Class II differential of 
$0.70 per hundredweight--to the advanced Class IV skim milk value, 
while the Class I price is determined by adding a Class I differential 
to the higher of the advanced Class III or IV skim milk 
values.[Footnote 56] The Class I differentials vary by order. These 
differentials were, and to some extent remain, designed to represent 
the cost of transporting milk from areas with a surplus--traditionally 
the Upper Midwest region--to areas with a deficit, when necessary to 
meet the demands for fluid milk products. Because these differentials 
vary among orders, Class I prices differ from one marketing order to 
another.

Table 27: USDA's Milk Classes Used for Setting Milk Prices: 

Class: I; 
Usage (examples): Fluid milk for drinking purposes.

Class: II; 
Usage (examples): Soft manufactured products, such as cream products, 
cottage cheese, ice cream, and yogurt.

Class: III; 
Usage (examples): Cream cheese, other spreadable cheeses, and hard 
cheese.

Class: IV; 
Usage (examples): Butter and dried milk products, such as nonfat dry 
milk.

Source: GAO presentation of USDA data.

[End of table]

Dairy farmers selling raw milk to manufactured or fluid milk processors 
regulated by an FMMO receive an average, or "blend," price that is the 
weighted average of the prices of Class I through IV milk. The weights 
are determined by the amount of milk sold in each class in the 
marketing order. The average price farmers receive, therefore, depends 
in part on the extent to which the total raw milk supply in a specific 
order is used to make fluid milk, as opposed to the three classes of 
manufactured products. Dairy farmers located in a milk marketing order 
sometimes ship their milk to another order to obtain a higher 
price.[Footnote 57] If the farmer meets the receiving milk marketing 
order's shipping requirements, all of that farmer's milk, not only the 
shipped milk, can qualify for that order's blend price.[Footnote 58] 
However, farmers must consider whether the benefit of receiving a 
higher blend price outweighs the cost of transporting a sufficient 
amount of milk to qualify for the receiving order's blend price.

To generate the money paid to farmers, processors pay into, or draw 
from, a federal order "pool" based on the value of the use for which 
they are buying the raw milk.[Footnote 59] Fluid milk processors are 
required to participate in the federal order pool if they are covered 
by one of the federal milk marketing orders. Processors of manufactured 
products are not required to participate in the pool. Under the 
classified pricing system, raw milk used in fluid products is valued 
more highly. Therefore, the fluid milk processors typically pay money 
to the pool, while those producing other products typically draw money 
from the pool. This draw represents a benefit to processors of 
manufactured milk products for serving as a reserve supply plant for 
that order's Class I market. In part, a processor's payment or draw 
depends on the producer price differential, a measure of the difference 
between the value of that processor's use of raw milk as determined by 
the market and the value if all of that processor's raw milk were used 
in Class III products. In times of significant price volatility, it is 
possible for the producer price differential to be negative, so that 
some processors of manufactured products would have to pay into the 
pool. In such cases, some of these processors choose not to participate 
in the pool, or de-pool their milk, because they would be required to 
pay into the pool instead of receiving a draw.

Some states, such as California, Maine, Nevada, New York, Pennsylvania, 
and Virginia, have established their own minimum farm-level milk 
pricing programs that cover all or portions of their states. These 
states have established commissions or boards to perform functions 
similar to those of USDA. For example, Virginia's milk commission, 
created in 1934, establishes monthly farm prices to ensure dairy 
farmers an adequate return on their investment and to preserve market 
stability. Similarly, Nevada's dairy commission, established in 1955, 
sets minimum prices for raw milk sold to processing facilities located 
within that state.

Dairy Price Support Program: 

The dairy price support program, established in 1949, supports farm 
prices by providing a standing offer from USDA's Commodity Credit 
Corporation (CCC) to purchase butter, cheese, and nonfat dry milk at 
specified prices.[Footnote 60] The prices offered for these dairy 
products are intended to provide sufficient revenue so that processors 
of these products can pay farmers, on average, a legislatively set 
support price for raw milk. Since 1999, the support price has been set 
at $9.90 per hundredweight.[Footnote 61]

By offering to purchase as much butter, cheese, and nonfat dry milk as 
processors offer to sell at specified prices, the price support program 
sets a floor on the price of these commodities and, thus, indirectly on 
the raw milk used to produce them. Because processors are not required 
to sell to the CCC and milk processing costs vary, farmers may receive 
prices that are either above or below the support price. However, 
manufactured product prices generally will not fall below the floor for 
very long. Also, because the price for raw milk used for fluid purposes 
under the FMMO program is based in part on the price of raw milk used 
for manufacturing purposes, the price support program indirectly 
influences the price that farmers receive for raw milk used for fluid 
purposes as well.

The Secretary of Agriculture can adjust--or tilt--the related CCC 
purchase prices for butter and nonfat dry milk and still achieve the 
target support price for raw milk used in manufactured products. These 
products are considered joint products manufactured from the same 100 
pounds of milk.[Footnote 62] Therefore, by increasing the support price 
of butter while lowering the support price of nonfat dry milk, or vice 
versa, USDA is able to adjust the CCC purchase prices, while 
maintaining the overall support price. The ability to adjust the 
relative purchase prices of these products is important for correcting 
imbalances in the CCC's purchases of milkfat (butter) and nonfat solids 
(nonfat dry milk). Failure to correct for such imbalances can create an 
incentive for farmers to expand production and may alter the flow of 
milk to alternative uses. The 1990 Farm Bill authorized the Secretary 
of Agriculture to adjust the tilt twice annually to limit the 
accumulation of significant government stocks of certain 
commodities.[Footnote 63]

As market prices rise, the support program allows the CCC to release 
its commodity stocks if the market price for a particular commodity 
exceeds that commodity's purchase price. In this respect, the program 
helps to decrease volatility in milk prices with regard to high-price 
periods as well as low-price periods.

Milk Income Loss Contract Program: 

In 2002, the MILC program began to provide countercyclical payments 
directly to farmers during periods of low prices.[Footnote 64] The MILC 
program provides support to farmers when the price of Class I milk in 
Boston falls below $16.94.[Footnote 65] MILC payments are equal to 45 
percent of the difference between $16.94 and the lower Boston Class I 
price. Farmers in all regions of the country have access to payments 
under this program, but only 2.4 million pounds of milk per farm are 
eligible for payments during each federal fiscal year. Farmers may 
choose the month that they begin accepting their payments.[Footnote 66] 
This discretion may enable farmers producing more than 2.4 million 
pounds of milk per year to target their MILC payments during the 
lowest-price periods of the year to maximize the MILC payments they 
receive before reaching the cap on eligible production.

Trade Restrictions and Export Incentives for Dairy Products: 

According to some government and academic experts, trade restrictions 
have the greatest effect of any federal policy on farm milk prices. 
Trade restrictions maintain U.S. prices above average international 
market prices by restricting the amount of imports, particularly of 
manufactured dairy products, that enter the country.[Footnote 67] In 
other countries, costs of production may be lower, or exports may be 
more heavily subsidized, possibly allowing these countries to export 
products to the United States at competitive prices. Thus, without 
trade restrictions, manufactured products from these other countries 
might enter the United States in greater quantities. This increased 
supply of manufactured products would be expected to decrease the 
demand for domestic raw milk and lead to lower farm prices. Without 
these trade restrictions, other dairy programs, such as the price 
support program, might not be feasible because lower manufactured 
product prices resulting from international competition could trigger 
an increase in purchases by the CCC, which could render the program 
prohibitively expensive.

The primary U.S. international trade restriction is the tariff-rate 
quota, which is the primary international trade restriction allowed 
under current international agreements. USDA's Foreign Agricultural 
Service uses licensing to administer a tariff-rate quota system for 
most dairy products. Under tariff-rate quotas, a low tariff rate 
applies to imports up to a specified quantity, and a higher tariff rate 
applies to any imports exceeding that amount. These higher over-quota 
tariff rates generally limit trade to within quota levels. Quota rates 
and quantities vary by product.

Another aspect of U.S. trade policy that affects farm prices is the 
Dairy Export Incentive Program (DEIP), an initiative that aims to help 
exporters of certain U.S. dairy products-specifically, nonfat dry milk, 
butterfat, and various cheeses-meet prevailing world prices for 
targeted dairy products and destinations.[Footnote 68] A major 
objective of the program is to develop export markets for dairy 
products where U.S. products are not currently competitive. Under the 
program, the Foreign Agricultural Service pays cash to exporters as 
bonuses, allowing them to buy dairy products at U.S. prices and then 
sell them abroad at lower international prices. DEIP could affect farm 
prices primarily by increasing demand for dairy products through export 
subsidies.[Footnote 69] According to a 2002 report by the Congressional 
Research Service, past studies have indicated that DEIP subsidies have 
at times enhanced farm prices; for example, these studies indicated 
that DEIP subsidies enhanced farm prices by $0.30 to $0.50 per 
hundredweight in 1992.[Footnote 70] Additionally, in May 2003, the 
National Milk Producers Federation testified that the subsidies for 
5,000 metric tons of butterfat provided by DEIP in March 2003 increased 
wholesale butter prices by an estimated $0.06 per pound.[Footnote 71] 
This price increase boosted farm income by between $20 million and $30 
million. DEIP can also help lower government costs by reducing the 
amount of product purchased under the price support program to the 
extent that savings in the price support program exceed the costs of 
subsidies. Given recent market conditions, DEIP has primarily been used 
to encourage exports of nonfat dry milk and cheese,[Footnote 72] and 
for the most part, from 1998 through 2002 the program supported exports 
of these products to the maximum extent allowable under international 
trade commitment limits.[Footnote 73]

Services Provided by Cooperatives, Market Structure, and Collective 
Action Can Influence the Price of Milk at the Cooperative Level: 

Milk reaches the consumer through a variety of pathways; however, most 
milk produced by dairy farmers in the United States is marketed through 
dairy cooperatives.[Footnote 74] Dairy cooperatives can either sell, or 
arrange the sale of, raw milk purchased from farmers to wholesale milk 
processors, or they can process it into fluid and manufactured milk 
products and distribute them to retail outlets.[Footnote 75] As part of 
sales to wholesale milk processors, cooperatives negotiate with the 
processors for over-order premiums, which represent the difference 
between the prices charged to the wholesalers and regulated minimum 
prices, in areas with federal or state marketing orders or regulations. 
The difference between the price at which cooperatives sell raw milk to 
wholesale fluid milk processors and the farm price for fluid milk is 
influenced by the costs of services that cooperatives provide to their 
members and to their buyers, the relative market power of cooperatives 
and fluid milk processors, and the effects of collective action taken 
by dairy cooperatives in marketing their members' milk.

Costs of Services Provided by Cooperatives Influence Milk Prices: 

Over-order premiums, in part, compensate cooperatives for the services 
they provide to their members and on behalf of their members to 
wholesalers. Some distinctive features of cooperatives include member 
ownership and control, at-cost services for members, and distribution 
of income to members on the basis of patronage. Farmers join dairy 
cooperatives to guarantee a market outlet for their milk, to gain 
bargaining power to obtain the best price in the market, to have their 
milk marketed efficiently, with the assurance that their milk will be 
accurately weighed and tested, and to be effectively represented in 
legislative, regulatory, and public relations matters. Most dairy 
cooperatives require farmers to sign a 1-year membership agreement that 
commits them to market all their milk through the cooperative.[Footnote 
76]

Cooperatives operate like corporate businesses to perform services for 
their members. For example, Dairy Farmers of America, the largest dairy 
cooperative in the country, serves almost 23,000 members, producing 
about 21 percent and marketing about 33 percent of the milk in the 
United States. According to the cooperative's Web site, the cooperative 
provides a variety of services to its members, including the following: 

* insurance--medical programs, dental/vision plans, and life insurance 
available to members via a milk check deduction;

* direct deposit--direct deposit of members' milk checks, ensuring that 
farmers' pay checks will be available within 24 hours of the pay date;

* forward contracting--a marketing service that allows members to 
protect themselves against price volatility by locking in the future 
sale price of their milk several months before it is produced; and: 

* financing services--loan packages for cattle, equipment, and 
operating expenses.

In some cases, dairy farmers pay on a per-use basis for the services 
they receive. However, cooperatives may also try to offset the costs of 
their services through negotiations with wholesale milk processors for 
over-order premiums.

Over-order premiums also compensate dairy cooperatives for a number of 
services that they provide to fluid milk processors on behalf of their 
members. Generally, these services include (1) transporting milk from 
different milk-producing areas, (2) scheduling--or balancing--milk 
deliveries to coincide with demand, and (3) standardizing the component 
content of milk deliveries. Different cooperatives also provide 
additional services for fluid milk processors. For example, one 
cooperative we contacted noted the rigorous quality control procedures 
it performs on its members' milk. According to the cooperative 
official, these efforts allow the cooperative to market its members' 
milk as better quality, potentially helping the cooperative negotiate 
higher over-order premiums. Officials from another cooperative said 
that a major component of the costs of services provided by 
cooperatives is balancing the delivery of raw milk supplies to 
processors' plants. At certain times processors' plants have surging 
demand for raw milk, while at other times the plants are empty. In 
addition, supply disruptions, such as labor strikes, create significant 
balancing disruptions. In this environment, few, if any, fluid milk 
processing firms have the capital (plants to make cheese and other 
products during periods of low fluid demand) to assume the risks 
inherent in balancing, and so in most cases this responsibility is met 
by the cooperatives.

Relative Market Power of Cooperatives and Processors Influences Milk 
Prices: 

Historically, farmers produced and distributed fluid milk as well as 
some manufactured products. Milk is a highly perishable product that is 
bulky to transport. Traditionally, this left farmers dependent on local 
markets for the sale of their milk. The role of dairy cooperatives 
developed as farmers faced greater demand for fluid milk and dairy 
products and the number of farmers who processed and distributed their 
own milk products declined. Instead, specialized firms began taking on 
the role of processing fluid and manufactured milk products and 
marketing them for sale to consumers. However, in this environment, 
there were many more farmers than processors, so processors had the 
opportunity to bargain with different farmers to obtain a lower price 
for their raw milk supplies. In this situation, farmers were at a 
disadvantage. Consequently, cooperatives took on the role of collecting 
raw milk from farmers and distributing it to processors. By doing so, 
cooperatives helped to balance the bargaining power between farmers and 
processors. The 1922 Capper-Volstead Act provides limited antitrust 
immunity to cooperatives that meet certain requirements under certain 
conditions and gives farmers an opportunity to work together in setting 
raw milk prices, including bargaining for market premiums. Thus, over-
order premiums, in part, reflect market power acquired by cooperatives 
relative to processors.

Since our June 2001 report, the concentration of dairy cooperatives has 
increased, with the potential effect of enhancing their market power in 
negotiations with processors. In 2001, we reported that 83 percent of 
the milk produced in the United States was marketed by cooperatives. 
However, USDA recently reported that in 2002, the share of milk sold to 
processors and other distributors by cooperatives reached 86 percent of 
all the milk produced in the United States.[Footnote 77] Cooperatives 
attained this market share despite a 13 percent decrease in the number 
of dairy cooperatives between 1997 and 2002. During this time the 
amount of member-produced milk marketed by the eight largest dairy 
cooperatives grew from 52 to 63 percent of the total volume of milk 
marketed by cooperatives. This translated into an increase from 42 to 
52 percent of the total volume of milk produced in the United States.

A number of dairy experts cited the need to offset gains in market 
power made by increasingly concentrated firms at the wholesale 
processor and retail levels of the milk marketing chain as a key factor 
in the continued concentration of cooperatives. The greater the 
percentage of the milk supply that a cooperative markets, the greater 
its ability might be to obtain higher over-order premiums in 
negotiations with wholesale processors. On the other hand, one academic 
source questioned the extent to which increased concentration is 
enhancing the market power of dairy cooperatives, particularly over the 
long term. He noted that although Dairy Farmers of America has been 
consolidating its control over milk supplies in some regions, farmers 
and cooperatives have been able to command larger over-order premiums 
in the East and Upper Midwest regions--where the cooperative's presence 
is not as strong--than in the West, where milk supplies have been 
increasing. Other sources noted that competition still exists among 
cooperatives and independent dairy farmers and that this competition 
prevents even larger cooperatives from obtaining excessively high over-
order premiums.

Collective Action by Cooperatives Influences Milk Prices: 

Another factor in determining the over-order premiums received by 
cooperatives for raw milk is collective action taken by cooperatives. 
Cooperatives work together to try to set prices by coordination allowed 
under the protection afforded by the Capper-Volstead Act. For example, 
officials with Dairy Farmers of America said that a major factor in the 
price of milk at the cooperative level is the action of marketing 
agencies composed of cooperatives. Marketing agencies behave like 
cartels and announce prices for their cooperative members. In most 
cases these agencies set prices for raw milk used in fluid milk and 
other products. Most of the prices announced by the marketing agencies 
represent the minimum federal order prices; additional charges may be 
added representing the costs of services provided by the cooperatives 
to the processors.

Representatives of Dairy Farmers of America said that there are 
marketing agency agreements in most major markets except in the Pacific 
Northwest and that for the most part, cooperatives participate in 
marketing agencies. They further stated that the use of marketing 
agencies has become more common in recent years. The marketing agencies 
may also market milk for independent farmers. The officials noted that 
while cooperatives and independent farmers can choose not to 
participate in the marketing agencies, experience has shown that as 
more producers choose to market milk outside the system, the marketing 
agencies face significant competition and prices fall. Eventually, if 
the prices get low enough, the producers have an incentive to work 
together again.

In an alternative type of collective action, three cooperatives--the 
Dairylea Cooperative, Dairy Farmers of America, and St. Albans 
Cooperative Creamery--established a milk marketing organization called 
Dairy Marketing Services. According to a Dairy Marketing Services 
official, the organization was formed because the cooperatives realized 
that they needed more market power to compete with increasingly 
concentrated processors and retailers. Cooperatives such as Dairylea, 
or individual farmers, establish contracts with Dairy Marketing 
Services to market their milk. Dairy Marketing Services markets about 
16 billion pounds of milk annually for farmers in the Northeast area 
that extends from Maine to Maryland, and includes a small area in Ohio. 
The official estimated that this quantity represents about 45 percent 
of the milk marketed in the Northeast and is produced by some 10,000 to 
11,000 farmers.

The Dairy Marketing Services official stated that the organization has 
been able to carve a niche for itself in the milk marketing chain by 
convincing processors that it is more efficient for them to have Dairy 
Marketing Services arrange to have raw milk transported from the farm 
to the plant and allow the processors to focus on processing milk. As a 
result, Dairy Marketing Services has been able to obtain contracts from 
a number of major processors in the Northeast, including Dean Foods, 
Crowley Foods, and Kraft, to ensure an adequate supply of milk for 
their plants. Additionally, Dairy Marketing Services provides 
specialized services for farmers such as health insurance and workmen's 
compensation, a livestock purchasing service, and risk management 
operations for farmers engaged in forward contracting. Although we were 
unable to confirm the effects that Dairy Marketing Services' efforts 
have had, the official stated that the organization has provided higher 
over-order premiums and lower transportation charges for its 
participating cooperatives and farmers than would have otherwise been 
the case.

Input Costs, Service Levels, Innovations, and Market Structure 
Influence Wholesale Fluid Milk Prices: 

The difference between the price at which wholesale fluid milk 
processors sell fluid milk products to retail firms and the price they 
pay for raw milk is influenced by changes in input costs, such as fuel, 
labor, packaging, transportation, and capital expenses. These costs, in 
turn, are affected by recent innovations that have increased efficiency 
and lowered costs of fluid milk processing, as well as by the level of 
service that fluid milk processors provide to retailers. For example, 
in addition to shipping the products to retailers, some wholesalers 
provide in-store services, including unloading the milk on the store 
dock, restocking the dairy case, and removing outdated or leaking 
containers. The difference between what fluid milk processors pay for 
raw milk and the wholesale price they charge their retail customers is 
also influenced by continued structural change in the fluid milk 
processing industry, including a steady increase in firm consolidation 
and the market share of some firms. While there have been many reasons 
for these trends, the effects on the market and fluid milk prices at 
this level are unclear.

Input Costs, Service Levels, and Innovations Influence Wholesale Fluid 
Milk Prices: 

Several fluid milk processors stated that the cost of raw milk, and, in 
particular, the federal order minimum price, was the single most 
important influence on wholesale milk prices. We estimate that the 
price of raw milk ranges from about 60 to 70 percent of the wholesale 
price of 2 percent milk. As such, the wholesale price that processors 
charge would be directly linked to the Class I federal order price on a 
year-to-year basis, with adjustments for over-order premiums and other 
inputs. However, a variety of other input costs can also affect the 
price at which fluid milk processors sell fluid milk products to 
retailers. Some sources indicated that costs of inputs other than raw 
milk have been increasing in recent years.[Footnote 78] As one 
executive of a milk-processing firm explained, the primary input costs, 
apart from raw milk, include labor and energy. A 2002 study examining 
changes in fluid milk processing plants located in the state of Maine 
found that total processing costs rose at an annual rate of about 2.4 
percent (adjusted for inflation) from 1993 through 2000.[Footnote 79] 
The study indicated that economywide wage inflation plus a dramatic 
increase in health care premiums paid by employers drove labor costs 
above the costs of other inputs, such as land and building expenses and 
plant supplies. Equipment costs increased 10.9 percent per year with 
investments in plant automation and greater reliance on information 
technologies. Also, fuel costs increased by 4.6 percent per year, 
reflecting economywide trends in energy costs. Moreover, while the cost 
of operating capital constituted only 1.0 percent of processing costs, 
it increased substantially during this period due to an increase in the 
short-term lending rate. Table 28 displays the percentage change in 
fluid milk processing costs in Maine reported in this study for each 
cost category from 1993 through 2000.

Table 28: Change in Costs for Fluid Milk Processing Plants in Maine, 
1993 through 2000: 

Cost category: Electricity; 
Percent of total cost in 2000: 5.0%; 
Annual rate of change: 1.6%; 
Total change from 1993 through 2000: 12.0%. 

Cost category: Equipment; 
Percent of total cost in 2000: 20.0%; 
Annual rate of change: 10.9%; 
Total change from 1993 through 2000: 106.0%. 

Cost category: Fuel oil; 
Percent of total cost in 2000: 1.0%; 
Annual rate of change: 4.6%; 
Total change from 1993 through 2000: 37.0%. 

Cost category: Labor; 
Percent of total cost in 2000: 31.0%; 
Annual rate of change: 3.7%; 
Total change from 1993 through 2000: 29.0%. 

Cost category: Land and building; 
Percent of total cost in 2000: 13.0%; 
Annual rate of change: 3.8%; 
Total change from 1993 through 2000: 30.0%. 

Cost category: Operating capital; 
Percent of total cost in 2000: 1.0%; 
Annual rate of change: 15.5%; 
Total change from 1993 through 2000: 175.0%. 

Cost category: Product loss; 
Percent of total cost in 2000: 1.0%; 
Annual rate of change: 0.4%; 
Total change from 1993 through 2000: 3.0%. 

Cost category: Supplies; 
Percent of total cost in 2000: 27.0%; 
Annual rate of change: (3.0%); 
Total change from 1993 through 2000: (19.0%). 

Cost category: Water and sewer; 
Percent of total cost in 2000: 1.0%; 
Annual rate of change: (0.3%); 
Total change from 1993 through 2000: (2.0%). 

Cost category: Total; 
Percent of total cost in 2000: 100%; 
Annual rate of change: 2.4%; 
Total change from 1993 through 2000: 18.0%. 

Source: GAO analysis of data from Dalton et al. (2002).

Note: Percentages calculated based on 2000 dollars. Percent of total 
cost in 2000 was calculated by GAO and is rounded to the nearest 
percent. Annual rates of change and total change from 1993 through 2000 
are from Dalton et al. (2002).

[End of table]

Changes in the level of service that some fluid milk processors provide 
their retail customers have increased the efficiency of the dairy 
supply chain, thus potentially influencing wholesale milk prices. For 
example, some fluid milk processors have begun to undertake supply-
chain management for their retail customers.[Footnote 80] According to 
a number of retailers and processors, supply-chain management commonly 
involves shared computer systems, which, in the vertical marketing 
chain, allow processors to more efficiently manage the processing and 
transporting of fluid milk products. One processor indicated that it 
uses an electronic data transfer system to manage supplies for certain 
retailers. In particular, this system allows the processor to contract 
for a certain number of loads of milk per day. Further, according to a 
recent presentation given by company officials, Dean Foods' national, 
refrigerated, direct-store-delivery system allows it to deliver fluid 
milk to its customers with increased route network efficiency and 
without customer disruption.[Footnote 81] Dean Foods operates 129 fluid 
processing plants in 39 states, servicing more than 150,000 customers 
coast to coast via its direct-store-delivery system of more than 6,000 
routes.[Footnote 82]

By allowing fluid milk products to move more efficiently from the 
processor to the retailer, these kinds of services help to ensure 
quality and reduce waste and costs along the supply chain. To the 
extent that processors benefit from the reduced costs of supplying 
retailers with fluid milk products, the provision of these services 
could have a downward effect on wholesale prices. On the other hand, 
these services could provide value to retailers for which they might be 
willing to pay a higher price when acquiring fluid milk products. 
Therefore, the net effect on wholesale prices of the level of service 
that processors provide to retailers is uncertain.

Additionally, innovations in technology can affect prices at the 
wholesale milk processing level. For example, changes in processing 
technology, such as more automated equipment, can improve the 
efficiency of processing operations and, to the extent that processing 
firms are successful at reducing their costs through innovative 
practices, they may be able to reduce their prices. A representative of 
one fluid milk processor explained that improvements in processing and 
packaging technology have doubled and tripled output. Also, a 
representative of one firm that processes milk for sale in its own 
retail stores stated that the firm has dedicated a large contingent of 
people toward the goal of reducing milk losses at its processing plants 
and has been successful at cutting these losses in half. He noted that 
a driving force behind these efforts is to try to alleviate increases 
in other input costs, such as labor.

With innovations in technology, the fluid milk processing industry has 
also invested in innovative new products. By developing products with 
extended shelf lives, processors can potentially save shipping costs, 
leading to lower wholesale prices. For instance, the dairy processing 
industry's collective investment in extended shelf life, ultra high 
temperature, and aseptic packaging technology allows fluid milk 
products to reach the end user more efficiently while maintaining 
quality.[Footnote 83] The benefits to processors and their retailers 
include the ability to ship these products longer distances because 
they are able to endure more stress than traditionally processed milk.

Market Structure in the Fluid Milk Processing Industry Can Influence 
Wholesale Prices: 

Since the 1960s, there has been long-term structural change in the 
wholesale fluid milk processing industry as a continuously declining 
number of firms have processed an increasing average volume of 
milk.[Footnote 84] Structural change in the processing industry has 
been driven by economies of size, technological changes, high 
concentration at other levels of the milk marketing chain, and rapid 
consolidation into fewer and fewer firms.[Footnote 85] While structural 
change can lead to lower prices due to cost reduction from greater 
efficiency in production, it can also lead to higher market 
concentration, particularly in individual markets. In general, high and 
increasing market concentration can result in greater market power, 
potentially allowing firms to increase prices above competitive levels. 
Accordingly, the net impact of increased market concentration on 
wholesale prices can be either positive or negative.

In recent years, through aggressive acquisitions of independent dairy 
processing plants, a handful of fluid milk processing firms have 
changed the market structure of the dairy industry at the wholesale 
level. These companies have generally pursued the business strategy of 
acquiring strong regional dairy processing plants so that they can 
strengthen their presence in existing markets, while expanding their 
geographic coverage to a national level. The acquisition and 
consolidation trend at the wholesale level has affected market 
structure by leading to higher market concentration for fluid milk 
processors in some markets. One common measure of market concentration 
is the four-firm concentration ratio-the percentage of sales by the top 
four firms in a market. According to the 1997 Census of Manufacturers, 
the market share for the top four fluid milk processors in the nation 
was about 21 percent. However, the market share for top fluid milk 
processors at the local level was significantly higher. For example, in 
our June 2001 report, we found that in Boston, Massachusetts, the 
market share of the top four fluid milk processors increased from 66 
percent in December 1997 to 88 percent in December 1999.[Footnote 86]

Since our last report in 2001 on fluid milk prices, this trend has 
continued, and there have been several significant mergers, 
acquisitions, and joint ventures that have further consolidated the 
industry. For example, in late 2001, Dean Foods merged with Suiza, 
Inc., bringing together the number one and two firms in terms of market 
share in the processing industry. Then, in July 2002, the Land O' Lakes 
dairy cooperative sold its fluid milk operations to Dean Foods. We 
estimate that these acquisitions and mergers gave Dean Foods about a 27 
percent market share nationally in fluid milk products in 2002. Others 
have estimated that Dean Foods' market share is about 35 percent 
nationally and approximately 70 percent in New England.[Footnote 87] As 
of 2002, we estimate that the market share of the top four fluid milk 
processors has increased to approximately 47 percent.[Footnote 88] As 
seen in figure 33, with increased concentration, the number of fluid 
milk processing plants has gone from 1,066 plants producing an average 
of 50.1 million pounds of milk per year in 1980 to 385 plants producing 
an average of 154.2 million pounds per year in 2002.

Figure 33: Number of Fluid Milk Processing Plants and Volume of Milk 
Processed per Plant, 1980 through 2002: 

[See PDF for image] 

[End of figure] 

Such increased concentration of fluid milk processing firms, 
particularly in individual markets, can increase the price at which 
fluid milk is sold to retailers because market concentration can 
provide these firms greater market power. Thus, some analysts viewed 
the trend toward greater concentration in the wholesale market as a 
means toward greater dominance and market power in selling fluid milk 
to retailers. Further, they noted that increased market power can also 
benefit processors in their negotiations for raw milk supplies from 
cooperatives and independent farmers. For example, the exercise of 
market power could allow processors to negotiate more favorable supply 
contracts, which could drive down input prices and increase the spread 
between wholesale and retail prices. Other economists who study the 
causes of market concentration described a phenomenon called the 
"replication hypothesis"--as concentration grows at one marketing 
level, it is likely to be replicated at other marketing levels. For 
instance, high market concentration at the retail level can lead to 
greater concentration at the fluid milk processor level, and higher 
concentration in fluid milk processing can, in turn, lead to higher 
concentration at the cooperative level. One fluid milk processor that 
we spoke with stated that retail concentration has resulted in 
retailers preferring only one supplier, requiring a processor to have 
multiple plants in order to supply a retailer who serves many markets.

On the other hand, increasing concentration can lead to cost savings 
through efficiency gains, which may be passed on to retailers in the 
form of lower wholesale prices. For example, some economists viewed 
consolidation of processing firms as a result of increasing economies 
of scale and excess plant capacity. That is, processors decrease their 
costs per gallon for items like packaging or processing costs, as they 
increase the amount of milk they process.[Footnote 89] One dairy 
analyst reported that in plants ranging from a monthly volume of 90,000 
pounds per month to 30 million pounds per month processing costs 
decreased from about $1 per gallon to about $0.50 per gallon. In the 
end, the impact of market concentration on wholesale prices, either 
positive or negative, depends on whether market power or efficiency 
dominates.[Footnote 90]

Retailing Costs, Consumer Demand, and Market Structure Changes Affect 
Retail Prices for Fluid Milk: 

Three key factors that influence fluid milk prices at the retail level 
are retailing costs, consumer demand, and market structure. Recent 
increases in input costs such as labor and energy have been 
substantial. In an effort to hold down their retailing costs and remain 
competitive, some retailers are implementing supply-chain management 
and other innovations that increase efficiency. At the same time, 
consumers are purchasing a declining amount of traditional fluid milk 
and are increasing consumption of other beverages, such as soft drinks 
and bottled water. Market structure changes include continued 
consolidation in recent years through mergers and acquisitions among 
large food retailers at the national level and in many local markets, 
along with an increasing number of outlets that are competing with 
traditional supermarkets to sell fluid milk.

Costs of Retailing Influence the Price of Fluid Milk: 

Representatives of the Food Marketing Institute stated that after the 
wholesale costs of the milk, the primary costs that influence the 
retail price of fluid milk are related to labor and energy.[Footnote 
91] They added that all of these costs have been rising recently. 
According to the Bureau of Labor Statistics, the average hourly 
earnings for nonsupervisory food store employees went from $7.56 per 
hour in 1992 to $10.20 per hour in 2002. These payroll costs are the 
largest percentage of retail operating costs, followed by the second 
largest single category, employee benefits such as health 
insurance.[Footnote 92] Table 29 shows the breakdown of supermarket 
operating costs in 2003 as a percentage of total sales and gross 
margin.[Footnote 93]

Table 29: Supermarket Operating Costs as a Percentage of Sales and 
Gross Margin, 2003: 

Expenses: Depreciation and amortization; 
Percentage of sales: 1.3%; 
Percentage of gross margin: 4.7%. 

Expenses: Employee benefits; 
Percentage of sales: 3.5%; 
Percentage of gross margin: 12.7%. 

Expenses: Insurance; 
Percentage of sales: 0.3%; 
Percentage of gross margin: 1.1%. 

Expenses: Maintenance and repairs; 
Percentage of sales: 0.7%; 
Percentage of gross margin: 2.5%. 

Expenses: Other operating costs; 
Percentage of sales: 3.8%; 
Percentage of gross margin: 13.8%. 

Expenses: Payroll; 
Percentage of sales: 11.4%; 
Percentage of gross margin: 41.3%. 

Expenses: Property rentals; 
Percentage of sales: 1.8%; 
Percentage of gross margin: 6.5%. 

Expenses: Supplies; 
Percentage of sales: 1.1%; 
Percentage of gross margin: 4.0%. 

Expenses: Taxes and licenses; 
Percentage of sales: 0.4%; 
Percentage of gross margin: 1.4%. 

Expenses: Utilities; 
Percentage of sales: 1.3%; 
Percentage of gross margin: 4.7%. 

Expenses: Total expenses; 
Percentage of sales: 25.7%; 
Percentage of gross margin: 93.1%.

Source: GAO analysis of Food Marketing Institute data.

[End of table]

Table 30 displays the sales and expense growth as a percentage of sales 
for the supermarket industry during the last decade, from 1993 through 
2003. During this time, total employment costs increased by 12.0 
percent, including a 10.7 percent increase in payroll expenses; the 
cost of supplies also increased by 10.0 percent.

Table 30: Growth of Supermarket Sales and Expenses during the Last 
Decade, 1993 through 2003: 

Supermarket sales (dollars in billions): Sales from supermarkets with 
more than $2 million in annual sales; 
1993: $292.0; 
2003: $432.8; 
Percent change: 1993 through 2003: 48.2%.

Retailing costs as a percentage of sales: Payroll expenses; 
1993: 10.3%; 
2003: 11.4%; 
Percent change: 1993 through 2003: 10.7%.

Total employment cost; 
1993: 13.3%; 
2003: 14.9%; 
Percent change: 1993 through 2003: 12.0%.

Supplies; 
1993: 1.0%; 
2003: 1.1%; 
Percent change: 1993 through 2003: 10.0%.

Utilities; 
1993: 1.2%; 
2003: 1.3%; 
Percent change: 1993 through 2003: 8.3%. 

Source: GAO analysis of Food Marketing Institute data.

[End of table]

A 2003 study that was more specific to retailer costs related to fluid 
milk sales noted that these costs include both direct and indirect 
costs.[Footnote 94] Direct costs are those for electricity, labor, 
store equipment, and fluid milk. Indirect costs include corporate, 
division, and store overhead. While the study found variation in the 
indirect costs, such as store overhead, there was less variation across 
retail stores in direct costs.

Increasing per unit costs have led some retailers to try to improve 
efficiency and reduce total costs. As mentioned in the discussion of 
factors influencing fluid milk prices at the wholesale level, some 
retailers are reducing costs by working with their wholesale suppliers 
to achieve supply-chain management. For example, officials with Wal-
Mart noted that the firm has tried to reduce its costs and maintain its 
everyday-low-pricing strategy for consumers through: 

* a computerized system called Collaborative Planning Forecast 
Replenishment that allows processors to track stock levels at Wal-Mart 
locations and schedule deliveries to specific locations;

* direct-store-delivery of the majority of its fluid milk products to 
increase the efficiency of its supply chain;[Footnote 95] and: 

* changes to its shipping practices, such as not putting labels on its 
cases, that have allowed Wal-Mart to save time and money.

Another retailer indicated that it is trying to improve the way it 
stocks its shelves to cut costs. A representative indicated that the 
retailer has invested in retrofitting its stores to use a device called 
a "bossy cart," which allows store employees to move 80 gallons of milk 
into the milk case in one shelf-stocking.

Consumer Demand Influences Retail Fluid Milk Pricing: 

Consumer demand, driven by factors such as taste, convenience, and 
health, influences the retail price of milk. Moreover, since fluid milk 
represents approximately 3 percent of total supermarket sales, it is an 
important category for store performance, and retailers have an 
incentive to price their products competitively. However, over time, 
fluid milk consumption has gradually declined, with per capita demand 
for milk trending downward at a rate of 2 to 3 percent per year. This 
downward trend stems from several key factors including increasing 
consumption of substitute drinks such as carbonated soft drinks, juice 
drinks, coffee, teas, soy products, and bottled water. Also, there has 
been an increasing trend toward more eating outside the home, reducing 
the demand for fluid milk sold in food stores. Within the fluid milk 
category, whole milk has gone from being 92 percent of fluid milk 
consumed in 1960 to about 35 percent in 2001. Private labels represent 
the largest portion of the market, about 60 percent.[Footnote 96] More 
recently, however, there has been growth in the development of 
innovative value-added dairy products. These new innovations include 
dairy products for medicine/health (such as low-carbohydrate products), 
multipack drinks such as single-serve and vending drinks, and organic 
dairy products.

In response to trends in consumer demand for fluid milk products, 
retailers from high-end supermarkets to mass merchandisers use diverse 
pricing strategies, and no single approach applies to any group. 
However, according to some retail executives, one method that retailers 
are currently using is category management. Using this strategy, a 
retailer would not focus on how much 1 percent, 2 percent, or whole 
milk it sells, but rather on how much is sold from the entire dairy 
case.[Footnote 97] Accordingly, category managers would view product 
assortment strategically, evaluating the performance of entire groups 
of related dairy products. The goal is to maximize the sales for the 
entire category, which requires continual adjustment to match consumer 
demand. To accomplish this goal, managers may feed scanner data and 
other market information into computer models that make product 
assortment decisions.

A related issue influencing the retail price of fluid milk is the price 
elasticity of demand, that is, the sensitivity of fluid milk 
consumption to changes in price. For many years, empirical studies have 
indicated that milk prices were very price inelastic, meaning that 
there was little change in demand in response to a change in price. 
Most studies suggest that overall, the demand for milk is still price 
inelastic. However, some recent studies suggest that the demand for 
milk is not as price inelastic as it was previously.

Moreover, some researchers have found that for many fluid milk 
products, demand is elastic, or that there is a greater change in 
demand relative to a change in price for certain types of milk. One 
study reported that price elasticities varied considerably by container 
size, type (such as white or flavored), and fat content of the 
milk.[Footnote 98] For instance, the study found that the demand for 
whole milk, skim milk, and low fat milk in half-gallon containers was 
price elastic. This research also suggested that carbonated soft drinks 
are the chief substitute or competitor for fluid milk products, while 
water is a complement in consumption.[Footnote 99] In another study, 
researchers found that the elasticities of demand for skim/low fat and 
whole milk brands are different.[Footnote 100] Demand for skim/low fat 
milk was found to be more price elastic than demand for whole milk, 
suggesting that retailers could increase overall fluid milk sales by 
lowering the prices of skim/low fat milk relative to prices for whole 
milk.

Retail Market Structure Can Influence Fluid Milk Prices: 

As with the fluid milk processing industry, there have been trends of 
increasing consolidation and concentration at the retail level during 
recent years, especially among retail firms in some individual markets. 
Structural change and increased consolidation at the retail level of 
the milk marketing chain could lead to lower retail prices as 
individual retailers experience increased efficiencies in their 
operations. On the other hand, high levels of concentration can result 
in greater market power, potentially allowing firms to increase market 
prices above competitive levels.[Footnote 101] Also, greater market 
concentration at this level could increase a retailer's buying power 
with fluid milk processors, potentially lowering costs. Depending upon 
whether these lower costs are passed on to consumers, this can either 
lower retail milk prices or increase the spread between wholesale and 
retail prices.

According to USDA, since 1996, almost 4,700 supermarkets, representing 
$75.5 billion in sales, were acquired by other firms. Major mergers and 
acquisitions that have occurred in the retail food market in recent 
years include the following: 

* In 1998, Kroger, the nation's largest supermarket chain, acquired 
Fred Meyer, and Albertsons acquired American Stores, the second-largest 
at that time.

* In 2000, Delhaize America, operator of the Food Lion chain of stores, 
purchased Hannaford Brother's Shop 'n Save supermarkets in New England 
to become the eighth-largest food retailer at that time.

* In 2001, Kroger purchased supermarkets in Oklahoma and Texas from 
Winn-Dixie.

* In 2001, Safeway made several acquisitions including Genuardi's 
Family Market stores (Pennsylvania, New Jersey, and Delaware), 
Randall's food markets (Houston, Texas), and Dominick's supermarkets 
(Chicago metropolitan area).

* In 2004, Albertsons, the third-largest U.S. food retailer, purchased 
Shaw's, the eleventh-largest at the time.

In June 2001, we reported that, for the 100 largest U.S. cities, the 
combined average market share of the top four firms increased from 69 
percent in 1992 to 72 percent in 1998, with some variation depending 
upon the particular market area.[Footnote 102] An official of one large 
supermarket chain noted that because of Wal-Mart's large presence in 
the market, other companies' slices of the "demand pie" got thinner, 
providing an incentive to expand and buy out other companies. According 
to USDA data, the top four firms among all food retailers in 2003 were 
Kroger, Wal-Mart, Albertsons, and Safeway.[Footnote 103]

Consolidation in food retail chains has led to high levels of 
concentration in individual metropolitan markets. Table 31 displays 
market concentration, as measured by the four-firm concentration ratio, 
in the 15 markets that we used in this report to analyze the spread 
between retail and farm milk prices.[Footnote 104] While this threshold 
varies, some economists have characterized a market with a four-firm 
concentration ratio of 60 percent or greater as a "tight oligopoly" or 
highly concentrated.[Footnote 105] In 2003, the levels of concentration 
varied by metropolitan market, with the percentage of the market held 
by the four largest firms ranging from 62.8 percent in the Minneapolis/
St. Paul area to 84.9 percent in Denver, with an overall unweighted 
average of 73.9 percent. Moreover, for the 15 markets that we analyzed, 
the overall average four-firm concentration ratio for 1998 that we 
reported in 2001--74 percent--is comparable to the 2003 average.
[Footnote 106]

Table 31: Market Share of the Top Four Food Retailers in Selected 
Markets, 2003: 

Retail markets: Atlanta, Georgia; 
Four-firm market share, 2003: 78.2%. 

Retail markets: Boston, Massachusetts; 
Four-firm market share, 2003: 70.1%. 

Retail markets: Charlotte, North Carolina; 
Four-firm market share, 2003: 82.0%. 

Retail markets: Cincinnati, Ohio; 
Four-firm market share, 2003: 79.4%. 

Retail markets: Dallas, Texas; 
Four-firm market share, 2003: 67.3%. 

Retail markets: Denver, Colorado; 
Four-firm market share, 2003: 84.9%. 

Retail markets: Miami, Florida; 
Four-firm market share, 2003: 81.6%. 

Retail markets: Milwaukee, Wisconsin; 
Four-firm market share, 2003: 63.2%. 

Retail markets: Minneapolis, Minnesota; 
Four-firm market share, 2003: 62.8%. 

Retail markets: New Orleans, Louisiana; 
Four-firm market share, 2003: 74.7%. 

Retail markets: Phoenix, Arizona; 
Four-firm market share, 2003: 80.2%. 

Retail markets: Salt Lake City, Utah; 
Four-firm market share, 2003: 67.6%. 

Retail markets: San Diego, California; 
Four-firm market share, 2003: 68.8%. 

Retail markets: Seattle, Washington; 
Four-firm market share, 2003: 71.8%. 

Retail markets: Washington, D.C; 
Four-firm market share, 2003: 76.5%. 

Retail markets: Average; 
Four-firm market share, 2003: 73.9%. 

Source: GAO presentation of USDA/ERS data.

Note: Four-firm market shares are for supermarkets and super centers 
only. Smaller grocery stores and convenience stores are excluded.

[End of table]

At the same time, the traditional dominance of supermarkets in food 
sales has been challenged by competition from new mass merchandisers 
and super centers such as Wal-Mart, K-Mart, and Target. These retailers 
tend to offer lower prices and often purchase their inventories in 
large quantities to pass on low prices to consumers. According to a 
recent USDA report, even the larger conventional food stores do not 
have the same buying power as these large general merchandisers. They 
also tend to grow by new investment in stores rather than through 
mergers and acquisitions, in contrast to traditional supermarkets. 
Figure 34 displays the change in food sales by market segment of food 
retailers between 1993 and 2003. Sales from supermarkets decreased from 
63 percent to 58.3 percent during this time period. However, sales from 
warehouse clubs and super centers increased from 3.6 percent to 9 
percent, while those of convenience stores and drug stores also 
increased--from 11.9 percent to 13.6 percent. Overall, sales from 
nontraditional food retailers--warehouse clubs and super centers, mass 
merchandisers, and convenience and drugstores--went from 17.2 percent 
in 1993 to 24.4 percent in 2003.

Figure 34: Percentage of Retail Food Sales by Market Segment, 1993 and 
2003: 

[See PDF for image] 

[End of figure] 

Within the fastest-growing segment, warehouse clubs and super centers, 
the largest food retailer is Wal-Mart, followed by Target and Meijer's, 
while the second fastest growing segment includes the major drug 
chains, such as Walgreen's and CVS. As of 2003, Wal-Mart super center 
sales reached $103.2 billion, with estimated grocery sales of $41.3 
billion.[Footnote 107] According to a recent ACNielsen study, while all 
U.S. households still shop in traditional grocery stores, the annual 
number of trips to such stores continues to decline.[Footnote 108] In 
contrast, super centers have shown strong gains in household 
penetration as well as gains in the number of trips per year. In dairy, 
however, conventional food stores still offer a larger selection of 
milk products. A recent study by researchers at Cornell and Oklahoma 
State Universities on dairy case management found that the number of 
milk products offered was highest in supermarkets (74) and lowest in 
drug stores (16).[Footnote 109] While the volume of milk products was 
highest for mass merchandisers, the number of products (24) was similar 
to convenience stores (22). The authors explained that historically, 
mass merchandisers concentrated on moving a large volume of product 
with a limited variety.

[End of section]

Appendix VI: Economic Studies of Price Transmission in the U.S. Fluid 
Milk Market: 

This appendix summarizes the findings of 14 economic studies of price 
transmission in U.S. fluid milk markets. These studies estimated the 
extent to which price changes at one level, such as the farm level, are 
transmitted to other levels, such as the retail level, and the time in 
which these price changes are transmitted. Many of the studies found a 
difference, or asymmetry, in either the extent or speed of price 
transmission, depending on whether the initial price change was an 
increase or a decrease (see table 32).[Footnote 110] Some of the 
studies analyzed possible causes for price asymmetry and often 
identified the presence of noncompetitive markets as a contributing 
factor.[Footnote 111] Although most studies estimated how prices are 
transmitted from the farm to the retail level, a few also estimated how 
price changes are transmitted from the retail level back to the farm 
level.

Table 32: Overview of Fluid Milk Price Transmission Studies and Results 
on Price Transmission Asymmetry/Symmetry: 

Author: Carman and Sexton; 
Year: Forth-coming 2005; 
Model: Econometric model based on Houck (1977); 
Period of study: 1999-2003; 
Geographic area: Nine western U.S. cities[B]; 
Results on price transmission asymmetry/symmetry(long run)[A]: 
Asymmetry in certain milk types and markets; 
Additional results: Asymmetry in timing in CA markets.

Author: Sexton, Xia, and Carman; 
Year: 2004; 
Model: Hotelling framework; 
Econometric model; 
Period of study: 1999-2003; 
Geographic area: Nine western U.S. cities[C]; 
Results on price transmission asymmetry/symmetry(long run)[A]: 
Asymmetry; 
Additional results: Asymmetry in timing.

Author: Capps, Jr; 
Year: 2004; 
Model: Houck econometric model and error correction model; 
Period of study: 1994-2002; 
Geographic area: Seven U.S. cities[D]; 
Results on price transmission asymmetry/symmetry(long run)[A]: 
Asymmetry in majority of cities.

Author: Linkow, Gould and Stiegert; 
Year: 2004; 
Model: Asymmetric friction model; 
Period of study: 1997-2004; 
Geographic area: Ten U.S. cities[E]; 
Results on price transmission asymmetry/symmetry(long run)[A]: 
Asymmetry.

Author: Chidmi, Lopez, and Cotterill; 
Year: 2004; 
Model: New Empirical Industrial Organization model; 
Period of study: 1996-2000; 
Geographic area: Boston; 
Results on price transmission asymmetry/symmetry(long run)[A]: N/A.

Author: Lass; 
Year: 2004; 
Model: Econometric model based on Kinnucan and Forker (1987); 
Period of study: 1982-2002; 
Geographic area: New England; 
Results on price transmission asymmetry/symmetry(long run)[A]: 
Post-compact asymmetry[F]; 
Additional results: Pre-compact same as 2001.

Author: Wang; 
Year: 2003; 
Model: Structural econometric model based on Emerick (1994); 
Period of study: 1971-1997; 
Geographic area: National; 
Results on price transmission asymmetry/symmetry(long run)[A]: 
Asymmetry; 
Additional results: Asymmetry in short run; Symmetry retail to farm.

Author: Romain, Doyon, and Frigon; 
Year: 2002; 
Model: Marketing margin, econometric model; 
Period of study: 1980-1997; 
Geographic area: Upstate New York (UNY) and New York City (NYC); 
Results on price transmission asymmetry/symmetry(long run)[A]: 
Asymmetry UNY and NYC prior to price-gouging law; 
only NYC after the law[G]; 
Additional results: Same results in short run.

Author: Dhar and Cotterill; 
Year: 2002; 
Model: Two-stage market channel model; 
Period of study: 1996-1998; 
Geographic area: Boston; 
Results on price transmission asymmetry/symmetry(long run)[A]: N/A.

Author: Lass, Adanu, and Allen; 
Year: 2001; 
Model: Econometric model based on Kinnucan and Forker; 
Period of study: 1982-1997; 
Geographic area: New England; 
Results on price transmission asymmetry/symmetry(long run)[A]: 
Symmetry; 
Additional results: Asymmetry in short run.

Author: Frigon, Doyon, and Romain; 
Year: 1999; 
Model: Marketing margin, econometric model; 
Period of study: 1980-1997; 
Geographic area: Northeast U.S; UNY and NYC; 
Results on price transmission asymmetry/symmetry(long run)[A]: 
Symmetry in all markets except asymmetry in NYC after law[G]; 
Additional results: Asymmetry in all markets in short run.

Author: Carman; 
Year: 1998; 
Model: Econometric model based on Houck; 
Period of study: 1985-1997; 
Geographic area: Three California cities[H]; 
Results on price transmission asymmetry/symmetry(long run)[A]: 
Symmetry; 
Additional results: Asymmetry in short run.

Author: Emerick; 
Year: 1994; 
Model: Structural econometric model based on Houck; 
Period of study: 1971-1991; 
Geographic area: National; 
Results on price transmission asymmetry/symmetry(long run)[A]: 
Asymmetry; 
Additional results: Symmetry in short run.

Author: Hansen, Hahn, and Weimar; 
Year: 1994; 
Model: Econometric model; 
Period of study: 1983-1990; 
Geographic area: National; 
Results on price transmission asymmetry/symmetry(long run)[A]: 
Asymmetry. 

Source: GAO analysis using various sources (see table 33).

[A] These results indicate farm-to-retail price asymmetry or symmetry.

[B] These cities include the four California markets of Sacramento, San 
Francisco, Los Angeles, and San Diego and the five non-California 
markets of Seattle, Portland, Salt Lake City, Denver, and Phoenix.

[C] The cities are the same as in Carman and Sexton (forthcoming 2005).

[D] These metropolitan markets include Atlanta, Boston, Chicago, 
Dallas, Hartford, St. Louis, and Seattle.

[E] These metropolitan markets could not be disclosed.

[F] The Compact refers to the Northeast Interstate Dairy Compact.

[G] This law refers to the New York milk price-gouging law of 1991 
(codified at NY Gen. Bus. §396-rr).

[H] These three California cities include Los Angeles, San Francisco, 
and Sacramento.

[End of table]

How prices are transmitted within the milk marketing chain is important 
to policy makers because it affects both farmers and consumers. Farmers 
may be concerned with price transmission because they may believe 
increases in retail prices are not fully passed back to the farm level, 
while decreases are passed on. Consumers and farmers may believe that 
decreases in farm prices are not fully passed along to the retail 
level, while increases are passed on. Figure 35 illustrates price 
transmission through the vertical milk marketing chain; the arrows show 
how price signals are transmitted in both directions between marketing 
levels.

Figure 35: Marketing Chain and Price Transmission for the U.S. Fluid 
Milk Industry: 

[See PDF for image] 

[End of figure] 

The first section of this appendix is a detailed table summarizing the 
models, data, and key assumptions used in each study, and each study's 
results. The second and third sections discuss the farm-to-retail 
results, including evidence of price asymmetry, with respect to the 
extent of price transmission and the speed of price transmission. The 
fourth section discusses the retail-to-farm results on price 
transmission. The last section discusses the studies' findings 
regarding factors that might cause price asymmetry.

Summary of Recent Economic Studies of Price Transmission in the U.S. 
Fluid Milk Market: 

While most of the studies summarized in table 33 use, as a basis for 
their models, the standard Houck (1977)[Footnote 112] and Kinnucan and 
Forker (1987) models to identify price asymmetry,[Footnote 113] others 
use newer methods such as the error correction model, which some 
researchers believe provides a more appropriate specification for 
examining asymmetric price transmission.[Footnote 114] Most of the 
studies estimated only "forward" price transmission, or price 
transmission from the farm to the retail level, but we also report on 
one study that estimated "backward" price transmission, from the retail 
level to the farm. The studies also differed in whether they estimated 
short-run or long-run price transmission asymmetry or both.[Footnote 
115] We take all of these differences into account in interpreting the 
studies' overall conclusions and discussing their results.

Table 33: Recent Price Transmission Studies of the Fluid Milk Market: 

Author/Study/Year: Carman and Sexton, "Supermarket Fluid Milk Pricing 
Practices in the Western United States," Agribusiness, forthcoming 
2005; 

Model Description: Type of economic model: Econometric model based on 
the farm-to-retail price transmission model of Houck (1977) for whole, 
skim, 1 percent, and 2 percent milk. Estimated time lags using an Almon 
distributed lag model; 

Model Description: Scope of model and price data used: 
Average monthly prices for nine California and non-California metro 
markets, 1999-2003; 
Farm prices: California: Class I California milk prices; 
Other states: FMMO Class I prices; 
Retail prices: ACNielsen average monthly retail prices; 

Model Description: Additional assumptions/variables/limitations: Market 
power based on hypothesis tests of parameter size, parameter tests for 
asymmetry, and a departure from cost differences of fluid milk products 
due to different fat contents; 

Price Transmission Results: Timing/symmetry and degree of price 
transmission[A]: Timing/price asymmetry: California and non-California: 
Contemporaneous to 3-month period; 
California markets: Some evidence of price symmetry and some of price 
asymmetry, depending on market and product; 
Non-California markets: Price transmission in almost all markets was 
asymmetric; 
Degree of price transmission: 
California: Sacramento: Increases: 72%-122%; Decreases: 52%-97%; 
Los Angeles: Increases: 60%-115%; Decreases: 75%-106%; 
San Francisco: Increases: 65%-115%; Decreases: 49%-94%; 
San Diego: Increases: 56%-109%; Decreases: 58%-110%; 
Non-California: Seattle: Increases: 57%-72%; Decreases: 39%-64%; 
Portland: Increases: 3%-25%; Decreases: 4%-30%; 
Phoenix: Increases: 5%-59%; Decreases: 6%-63%; 
Salt Lake City: Increases: 39%-56%; Decreases: 54%-83%; 
Denver; Increases: 43%-56%; Decreases: 40%-55%; 
Price Transmission Results: Other model results: Analysis revealed 
evidence of market power in fluid milk pricing in each of the nine 
metro markets analyzed; 
In Portland, estimated retail price coefficients did not respond to 
farm prices; 
In non-California markets, only 3 of 40 estimated coefficients were 
consistent with perfect competition in pricing; 
Addition of retail skim milk, 1 percent, and 2 percent led to different 
results than previous analysis of only whole milk.

[End of Carman and Sexton]

Author/Study/Year: Sexton, Xia, and Carman, "Horizontal Differentiation 
with Differential Input Costs: Retail Prices for Milk by Fat Content." 
Paper presented at the annual AAEA meetings, Denver, Colorado, 2004.
[B]; 

Model Description: Type of economic model: Theoretical model based on 
Hotelling framework of horizontally differentiated products with 
differential costs. Econometric estimation -seemingly unrelated 
regression-of a differentiated product, market competition model using 
metropolitan retail markets for whole and skim milk; 

Model Description: Scope of model and price data used: 
Average monthly prices for nine California and non-California cities. 
California data, 1999-2003; 
Non-California data, 2000-2003; 
Farm prices: Class I prices from California Dairy Information Bulletin 
and FMMO Class I component prices; 
Retail prices: California Dairy Information Bulletin; 

Model Description: Additional assumptions/variables/limitations: Three 
competition scenarios examined for retail fluid milk markets: perfect 
competition, monopoly, and oligopoly; 
Skim milk (low-cost) and whole milk (high-cost) represent products with 
differential costs transmitted differently in different competition 
scenarios; 
Farm prices do not contain over-order premiums; 

Price Transmission Results: Timing/symmetry and degree of price 
transmission[A]: 
Timing/price asymmetry: 
California: Los Angeles and San Diego have longer transmission periods 
than Sacramento and San Francisco; 
Non-California: Prices are transmitted gradually for Denver, Salt Lake 
City, Portland, and Phoenix, while prices in Seattle are transmitted 
quickly, within 1 month; 
Degree of price transmission: N/A; 
Price Transmission Results: Other model results: Competition results: 
California: Results suggest oligopoly scenario for Sacramento, San 
Francisco, and Los Angeles markets. Some evidence of oligopoly scenario 
for San Diego market; 
Non-California: Results suggest oligopoly scenario for Phoenix, Salt 
Lake City, and Seattle markets. Model also suggests Denver market is 
closer to oligopoly, while Portland is closer to monopoly scenario.

[End of Sexton, Xia, and Carman] 

Author/Study/Year: Capps, Jr., "Asymmetry in Farm-Retail Price 
Transmission Associated with Whole Milk and Two Percent Milk in 
Selected U.S. Cities: A Comparison of the Conventional Houck Approach 
and the Error Correction Model Approach." Working paper, Department of 
Agricultural Economics, Texas A&M University, 2004; 

Model Description: Type of economic model: The standard Houck 
econometric price transmission approach is compared to the error 
correction model using co-integration procedures. Model estimates 
results for whole milk and 2 percent milk; 

Model Description: Scope of model and price data used: 
Monthly data from January 1994 to October 2002 for seven U.S. cities: 
Atlanta, Boston, Chicago, Dallas, Hartford, St. Louis, and Seattle; 
Farm prices: USDA Agricultural Marketing Service; 
Retail prices: USDA Agricultural Marketing Service; 

Model Description: Additional assumptions/variables/limitations: 
Elasticities of price transmission are calculated for each product and 
market; 
The model does not include any other marketing input costs; 

Price Transmission Results: Timing/symmetry and degree of price 
transmission[A]: 
Houck method: Price asymmetry: 
Whole Milk: Asymmetric: Atlanta, Boston, Chicago, and Dallas, and 
Hartford;
Whole Milk: Symmetric: St. Louis and Seattle; 
2 percent: Asymmetric: Atlanta, Boston, Chicago, and Hartford; 
2 percent: Symmetric: Dallas, St. Louis, and Seattle; 

Houck method: Elasticity of price transmission (ranges): 
Whole milk: Increases: (+0.23)-(+0.58); 
Whole milk: Decreases: (-0.02)-(+0.12); 
2 percent: Increases: (+0.11)-(+0.46); 
2 percent: Decreases: (-0.06)-(+0.25); 

Error correction model: Price asymmetry: 
Whole Milk: Asymmetric: Atlanta, Chicago, and Dallas; 
Whole Milk: Symmetric: St. Louis; 
2 percent: Asymmetric: Atlanta, Chicago, and Seattle; 
2 percent: Symmetric: St. Louis and Dallas. 

Error correction model: Elasticity of price transmission (ranges): 
Whole milk: Increases: (+0.24)-(+0.35);
Whole milk: Decreases: (-0.03)-(+0.06); 
2 percent: Increases: (+0.05)-(+0.29);
2 percent: Decreases: (-0.006)-(+0.12); 

Price Transmission Results: Other model results: Author notes that 
results suggest there is a possible market failure due to a highly 
concentrated retail sector, with the exception of St. Louis and 
Seattle.

[End of Capps, Jr.]

Author/Study/Year: Linkow, Gould, and Stiegert, "Retail Consolidation, 
Market Concentration, and Farm-Retail Price Asymmetry in the U.S. Fluid 
Milk Market." Working paper, Department of Agricultural Economics, 
University of Wisconsin-Madison, 2004; 

Model Description: Type of economic model: Authors use an asymmetric 
friction model that accounts for the existence of menu costs (the costs 
of repricing products). Estimated model uses the price of private label 
whole milk; 

Model Description: Scope of model and price data used: 
Weekly panel data from 1997--2004 for 10 metropolitan fluid milk 
markets; 
Farm prices: FMMO Class I announced cooperative price; 
Retail prices: IRI retail price data; 
private label (store brand) whole milk.[C]; 

Model Description: Additional assumptions/variables/limitations: Price 
asymmetry and menu costs are allowed to vary by city; 
Includes a marketing cost index variable based on a paper by Romain et 
al., (2002); 
Includes a measure of market concentration and a measure of spatial 
market concentration; 

Price Transmission Results: Timing/symmetry and degree of price 
transmission[A]: 
Timing/price asymmetry: Asymmetric-Farm price decreases are passed on 
less completely than increases; 
Responses to price increases do not differ considerably across cities. 
Responses to price decreases do differ across cities; 
Degree of price transmission: N/A. 

[End of Linkow, Gould, and Stiegert]

Author/Study/Year: Chidmi, Lopez, and Cotterill, "Dairy Compact, Market 
Power, and Milk Prices in Boston." Working paper, Department of 
Agriculture and Resource Economics, University of Connecticut, 2004; 

Model Description: Type of economic model: The New Empirical Industrial
 Organization structural model of Appelbaum (1982) that includes 
measures of market power and price transmission. The model tests for 
values of these variables with and without the Northeast Interstate 
Dairy Compact (NEDC).[D]; 

Model Description: Scope of model and price data used: 
Weekly data from 1996-2000 for Boston metropolitan fluid milk market; 
Farm prices: The higher of the FMMO Class I prices or Compact Class I 
prices, plus over-order premiums; 
Retail prices: Computed from IRI retail data by dividing total sales by 
total volume.[C]; 

Model Description: Additional assumptions/variables/limitations: 
Assesses retail prices under four scenarios: NEDC, no NEDC, with 
perfect competition, and oligopoly; 
estimates market power and market conduct variables; 
Assumes cost-plus pricing between processors and retailers in the 
Boston area; 
Model does not estimate the timing of price transmission; 

Price Transmission Results: Timing/symmetry and degree of price 
transmission[A]: 
Timing/price asymmetry: N/A; 
Degree of price transmission: Increases: 68%; 
Transmission elasticities were estimated at 0.331 pre-Compact and 
0.2911 post-Compact; 

Price Transmission Results: Other model results: Retail price increases 
due to market power outweighed impact of NEDC by nearly 7 times; 
Both the pre-and post-NEDC retail price markup over marginal cost (the 
competitive benchmark) is about 25% of the retail fluid milk price; 
Market conduct-supermarkets do not ignore each other's actions; 
MILC program provides benefits to farmers, consumers, and retailers at 
the expense of taxpayers.[E].

[End of Chidmi, Lopez, and Cotterill]

Author/Study/Year: Lass, "Impacts of the Northeast Dairy Compact on New 
England Prices Revisited: New Data, New Lessons." Working paper, 
Department of Resource Economics, University of Massachusetts, Amherst, 
2004.[D]; 

Model Description: Type of economic model: Update of the previous 2001 
econometric mark-up model of Kinnucan and Forker (1987) allowing for 
rising and falling farm prices and different speeds of adjustment; 

Model Description: Scope of model and price data used: 
Monthly time-series price data for New England (Boston and Hartford), 
1982 to 2002; 
Farm prices: FMMO Class I price for the New England market; 
Retail prices: USDA Agricultural Marketing Service retail price series 
for Boston and Hartford; 

Model Description: Additional assumptions/variables/limitations: Longer 
data series than 2001 paper with time periods split into pre and post-
Compact; 
a pre-1997 period and a 1997-2002 period; 
Parameters of the pre-and post-Compact periods were tested to determine 
changes in price transmission; 
Assumes constant returns to scale and a competitive market beyond the 
farm gate; 
Included variable to measure changes in processing costs using USDA's 
Food Marketing Cost Index; 

Price Transmission Results: Timing/symmetry and degree of price 
transmission[A]: Timing/price asymmetry: Pre-Compact period: Results 
were consistent with original findings (Lass et al., 2001); price 
asymmetry in the short run and symmetry in the long run; 
Post-Compact period: 
Short run: Price asymmetry; 
Long run: Price asymmetry; 
Degree of price transmission: N/A; 

Price Transmission Results: Other model results: Boston: There was 
greater variation in farm prices without the Compact, leading to higher 
retail prices; 
Hartford: There was greater variation in farm prices without the 
Compact, with greater increases in retail prices.

[End of Lass]

Author/Study/Year: Wang, Price Transmission and the Role of Federal 
Dairy Policy in U.S. Dairy Markets. Master's thesis, Cornell 
University, 2003; 

Model Description: Type of economic model: Structural econometric model 
using a simultaneous system of equations of national dairy prices, 
including farm and retail fluid milk. Models both farm-to-retail and 
retail-to-farm price transmission. Model based on a previous one by 
Emerick (1994); 

Model Description: Scope of model and price data used: 
National in scope; uses national monthly average data from 1971-1997; 
Farm prices: Announced cooperative Class I price; 
Retail prices: U.S. retail price from Bureau of Labor Statistics-USDA; 

Model Description: Additional assumptions/variables/limitations: 
Competitive fluid milk market and constant returns to scale; 
Policy variable for changes in price support in 1980s; 
Price lags chosen from dairy market literature; 

Price Transmission Results: Timing/symmetry and degree of price 
transmission[A]: 
1988-1997 Period: Farm-to-retail: Timing/price asymmetry: Short run: 
(1 month): Asymmetric; 
1988-1997 Period: Farm-to-retail: Timing/price asymmetry: Long run: (3 
months): Asymmetric; 
1988-1997 Period: Farm-to-retail: Degree of price transmission: Short 
run: Increases: 94%; 
1988-1997 Period: Farm-to-retail: Degree of price transmission: Short 
run: Decreases: 31%; 
1988-1997 Period: Farm-to-retail: Degree of price transmission: Long 
run: Increases: 83%; 
1988-1997 Period: Farm-to-retail: Degree of price transmission: Long 
run: Decreases: 64%; 

1988-1997 Period: Retail-to-farm: Timing/price asymmetry: Short run: (1 
month): Asymmetric; 
1988-1997 Period: Retail-to-farm: Timing/price asymmetry: Long run: (3 
months): Symmetric; 
1988-1997 Period: Retail-to-farm: Degree of price transmission: Short 
run: Increases: 94%;
1988-1997 Period: Retail-to-farm: Degree of price transmission: Short 
run: Decreases: 2%;
1988-1997 Period: Retail-to-farm: Degree of price transmission: Long 
run: Increases: 40%;
1988-1997 Period: Retail-to-farm: Degree of price transmission: Long 
run: Decreases: 34%;

Price Transmission Results: Other model results: Decreases in dairy 
price supports in the mid-1980s led to greater asymmetric price 
transmission and more volatility in the post-1988 period than in the 
pre-1988 period for fluid milk and nonfat dry milk. 

[End of Wang]

Author/Study/Year: Romain, Doyon, and Frigon, "Effects of State 
Regulations on Marketing Margins and Price Transmission Asymmetry: 
Evidence from the New York City and Upstate New York Fluid Milk 
Markets," Agribusiness, 2002; 

Model Description: Type of economic model: Marketing margin model that 
includes quantity of commodity marketed and marketing costs combined 
with the Houck (1977) model. It includes variables measuring cumulative 
increases and decreases in farm-level prices. The Akaike Information 
Criterion was used to determine the appropriate lag structure; 

Model Description: Scope of model and price data used: 
Monthly data from 1980 -1997 for Upstate New York (UNY) and New York 
City (NYC) markets; 
Farm prices: UNY and NYC prices are the FMMO Class I prices; 
Retail prices: UNY and NYC prices are from the New York State 
Department of Agriculture; 

Model Description: Additional assumptions/variables/limitations: Model 
allows for testing of constant returns to scale; 
Model allows for asymmetry of other marketing costs; 
Model includes state policy variables-such as deregulation of milk 
distribution in NYC and the NYC price-gouging law.[F]; 
Model does not account for over-order premiums in farm prices; 

Price Transmission Results: Timing/symmetry and degree of price 
transmission[A]: 
Timing/price asymmetry: 
Short run: Asymmetric-NYC and UNY before price-gouging law; 
Asymmetric-NYC after price-gouging law; 
Long run: Asymmetric-UNY and NYC, before price-gouging law; 
Asymmetric-NYC after price-gouging law; 

Price transmission elasticities: NYC: Before the price-gouging law: 
Increasing elasticities: 0.70; 
Price transmission elasticities: NYC: Before the price-gouging law: 
Decreasing elasticities: 0.30; 
Price transmission elasticities: NYC: After the price-gouging law: 
Increasing elasticities: 0.52; 
Price transmission elasticities: NYC: After the price-gouging law: 
Decreasing elasticities: 0.43; 

Price transmission elasticities: UNY: Before the price-gouging law: 
Increasing elasticities: 0.62; 
Price transmission elasticities: UNY: Before the price-gouging law: 
Decreasing elasticities: 0.49; 
Price transmission elasticities: UNY: After the price-gouging law: 
Increasing elasticities: 0.52; 
Price transmission elasticities: UNY: After the price-gouging law: 
Decreasing elasticities: 0.51; 

Price Transmission Results: Other model results: Model results indicate 
constant returns to scale; 
NYC experienced price asymmetry in the long run prior to 1991, before 
the price-gouging law came into effect, but much less thereafter; 
The deregulation of milk distribution to NYC in 1987 allowed Farmland 
Dairies' entry into the NYC market and significantly reduced marketing 
margins.

[End of Romain, Doyon, and Frigon] 

Author/Study/Year: Dhar and Cotterill, "Price Transmission in 
Differentiated Product Market Channels: A Study of the Boston Fluid 
Milk Market and the Northeast Dairy Compact," Food Marketing Policy 
Center, Department of Agricultural and Resource Economics, University 
of Connecticut, 2002; 

Model Description: Type of economic model: A two-stage structural 
market channel model of the Boston milk market using a nonlinear model 
of costs and demand. The model looks at the Boston fluid milk processor 
and retailer market channels; 

Model Description: Scope of model and price data used: 
Monthly average data for Boston market from March 1996 to July 1998; 
Farm prices: Boston FMMO Class I fluid milk price; 
Retail prices: IRI data for aggregate retail and top 4 supermarket 
chains in the Boston market.[C]; 

Model Description: Additional assumptions/variables/limitations: Model 
allows for both vertical and horizontal market channel effects; 
Model allows for the identification of cross-firm pass-through rates; 
Authors specify three different oligopoly games; 
Study does not test for the timing of price transmission or price 
transmission asymmetry; 
Price Transmission Results: Timing/symmetry and: degree of price 
transmission[A]: Timing/price asymmetry: N/A; 
Degree of price transmission (ranges): 
Processor-to-wholesale: 55%-65%; 
Wholesale-to-retail: 54%-62%; 
Firm-specific transmission: 32%-47%; 
Industrywide transmission: 88%-100%; 

Price Transmission Results: Other model results: Competition between 
retailers was lessened due to focal point pricing and the Compact; 
Industrywide and firm-specific cost shocks were not identical, nor did 
the latter aggregate to the former. 

[End of Dhar and Cotterill] 

Author/Study/Year: Lass, Adanu, and Allen "Impacts of the Northeast 
Dairy Compact on Retail Prices," Agricultural and Resource Economics 
Review, 2001; 

Model Description: Type of economic model: Econometric model based on 
the basic markup model of Kinnucan and Forker (1987) allowing for 
rising and falling farm prices and different speeds of adjustment; 

Model Description: Scope of model and price data used: 
Monthly time-series price data for New England (Boston and Hartford), 
1982 to 1997; 
Farm prices: Class I FMMO price for the New England market; 
Retail prices: USDA Agricultural Marketing Service retail price series 
for Boston and Hartford; 

Model Description: Additional assumptions/variables/limitations: Uses 
national data to determine the lag structure for fluid milk-uses lags 
of 1 and 2 months; 
Model uses impacts of price transmission to determine the impact of the 
Compact; 
Assumes constant returns to scale and a competitive market beyond the 
farm gate; 
Includes variable to measure changes in processing costs using USDA's 
Food Marketing Cost Index; 

Price Transmission Results: Timing/symmetry and degree of price 
transmission[A]: Timing/price asymmetry: Boston: Retail prices 
increased most rapidly in the current period; for declines, the 
greatest decreases occurred after a one-period lag; 
Hartford: Current period effects of rising farm prices were greater 
than current period falling farm prices; 

Boston and Hartford:
Short run: Price asymmetry; 
Long run: Price symmetry; 

Degree of price transmission and elasticities of price transmission: 
Boston: Degree of price transmission: 58% average; 
Degree of price transmission and elasticities of price transmission: 
Boston: Elasticities: Rising elasticity: SR: 0.46: 
Degree of price transmission and elasticities of price transmission: 
Boston: Elasticities: Rising elasticity: LR: 0.35; 
Degree of price transmission and elasticities of price transmission: 
Boston: Elasticities: Falling elasticity: SR: 0.14; 
Degree of price transmission and elasticities of price transmission: 
Boston: Elasticities: Falling elasticity: LR: 0.35; 

Degree of price transmission and elasticities of price transmission: 
Hartford: Degree of price transmission: 48% average; 
Degree of price transmission and elasticities of price transmission: 
Hartford: Elasticities: Rising elasticity: SR: 0.30; 
Degree of price transmission and elasticities of price transmission: 
Hartford: Elasticities: Rising elasticity: LR: 0.33; 
Degree of price transmission and elasticities of price transmission: 
Hartford: Elasticities: Falling elasticity: SR: 0.15; 
Degree of price transmission and elasticities of price transmission: 
Hartford: Elasticities: Falling elasticity: LR: 0.25; 

Price Transmission Results: Other model results: In the long run, 
increases in margins were primarily accounted for by other factors, 
such as processing costs, rather than the Compact; 
Impact of the Compact on retail prices was less than the over-order 
premium, suggesting that less than the full amount of the premium was 
passed on to consumers. 

[End of Lass, Adanu, and Allen] 

Author/Study/Year: Frigon, Doyon, and Romain, "Asymmetry in Farm-Retail 
Transmission in the Northeastern Fluid Milk Market," Food Marketing 
Policy Center, Department of Agricultural and Resource Economics, 
University of Connecticut, 1999; 

Model Description: Type of economic model: Hybrid of the marketing cost 
model, which includes the quantity of commodity marketed and costs, 
with the Houck model, which includes variables of cumulative increases 
and decreases in farm-level prices; 

Model Description: Scope of model and price data used: 
Northeast United States, Upstate New York (UNY), and New York City 
(NYC) markets using monthly data, 1980-1997; 
Farm prices: UNY and NYC prices are the Class I FMMO prices; 
for Northeast United States-FMMO Class I average prices of the four 
FMMO regions at that time; 
Retail prices: UNY and NYC prices from New York State Department of 
Agriculture; Northeast United States prices from the Bureau of Labor 
Statistics; 

Model Description: Additional assumptions/variables/limitations: 
Competitive market and constant returns to scale assumptions are 
relaxed; 
A variable for market concentration, the four-firm concentration ratio, 
included for UNY and NYC; 
Model allows for marketing costs; 
Model includes policy variables such as the NYC price-gouging law; 
Model does not account for over-order premiums in farm prices; 
Price Transmission Results: Timing/symmetry and: degree of price 
transmission[A]: Timing/price asymmetry: 
Short run: Asymmetry existed for UNY after 2 months, and still existed 
in NYC and the Northeast United States after 3 months; 
Long run: After 4 months, the Northeast United States, UNY, and NYC 
(postgouging law) fully adjusted. Only NYC (pregouging law) had not 
adjusted; 
Symmetry existed in all regions in the long run except NYC prior to 
1991; 
Degree of price transmission: N/A; 

Price Transmission Results: Other model results: NYC experienced price 
asymmetry in the long run prior to 1991, before the price-gouging law 
came into effect; 
Variable for market concentration was found insignificant for both UNY 
and NYC. Authors believed that the problem of consumer information was 
the predominant cause of asymmetric price transmission. 

[End of Frigon, Doyon, and Romain] 

Author/Study/Year: Carman, "California Milk Marketing Margins," Journal 
of Food Distribution Research, 1998; 

Model Description: Type of economic model: Response of retail-level 
milk prices to changes in farm prices using Houck's (1977) model for 
estimating nonreversible functions. The model is estimated using prices 
for whole milk; 

Model Description: Scope of model and price data used: 
Three California market areas: Los Angeles, San Francisco, and 
Sacramento. Monthly data, January 1985 to March 1997; 
Farm prices: Class I prices for Northern and Southern California from 
California Dairy Information Bulletin; 
Retail prices: California Dairy Information Bulletin; 

Model Description: Additional assumptions/variables/limitations: Uses 
lags of 1 month for price increases and 2 months for price deceases; 
Uses an index of marketing costs from the USDA/Economic Research 
Service marketing cost index; 

Price Transmission Results: Timing/symmetry and degree of price 
transmission[A]: 
Timing/price asymmetry: Short run: Asymmetric-Unlike price increases, 
there was a significant 1-month lag between farm price decreases and 
total retail price decreases for each city; 
Long run: Symmetric-Retail milk price changes were not significantly 
different for increases and decreases of farm prices; 

Degree of price transmission: 
Sacramento: Increases: (111%-112%); Decreases: (110%-117%); 
San Francisco: Increases: (117%-118%); Decreases: (94%-103%); 
Los Angeles: Increases: (76%-88%); Decreases: (62%-94%); 

Price Transmission Results: Other model results: For five of the six 
equations, the one-for-one price transmission process is consistent 
with constant dollar markup pricing; 
For Los Angeles, tests showed that retailers were maintaining prices 
by absorbing some cost increases, and reducing prices less than farm 
prices decreased.

[End of Carman] 

Author/Study/Year: Emerick, An Econometric Analysis of Dairy Market 
Price Transmission Processes. Master's thesis, Cornell University, 
1994; 

Model Description: Type of economic model: Structural econometric model 
based on Houck's method (1977) using a simultaneous system of 32 
equations and a distributed lag formulation. The model estimates price 
transmission for five dairy products, including fluid milk; 

Model Description: Scope of model and price data used: 
National scope-national monthly average data series, 1971-1991; 
Farm prices: Announced cooperative Class I price; 
Retail prices: U.S. average city retail fluid milk price from Consumer 
Price Index, Bureau of Labor Statistics; 

Model Description: Additional assumptions/variables/limitations: Price 
lags chosen from knowledge of the dairy market-lag length 2 months for 
farm price increases and decreases; 
Models both farm-to-retail and retail-to-farm price transmission 
results; 
Model uses slope and intercept dummy variables used to separate time 
periods into 1977-1988 and 1988-1991 to account for government support 
price decreases and greater price volatility; 

Price Transmission Results: Timing/symmetry and degree of price 
transmission[A]: 
Farm-to-retail: Timing/price asymmetry; 
Short run (Immediate): Symmetric; 
Long run (2 months): Asymmetric; 

Degree of price transmission; 
Short run: Increases: 45%; Decreases: 41%; 
Long run: Increases: 107%; Decreases: 55%; 

Price Transmission Results: Other model results: Author estimates 
causality for fluid milk using data from 1971-1991 and finds it 
multidirectional; 
Since 1988, different retail price responses (asymmetric) occur 1 and 2 
months after the initial farm-level price change. Author notes this may 
be due to greater volatility causing difficulties in determining the 
"appropriate" price at wholesale or retail; 
Asymmetry is not a short-run phenomenon in most other dairy products 
including retail butter, wholesale nonfat dry milk, and retail ice 
cream.

[End of Emerick] 

Author/Study/Year: Hansen, Hahn, and Weimar, Determinants of the Farm-
to-Retail Milk Price Spread, Economic Research Service, USDA, 1994; 

Model Description: Type of economic model: Statistical techniques 
similar to those used by Hahn's (1989, 1990) markup model in his study 
of price transmission. Estimates price transmission for whole milk; 

Model Description: Scope of model and price data used: 
National average quarterly data, 1983-1990 for farm, wholesale, and 
retail levels; 
Farm prices: Class I FMMO prices from AMS/USDA plus over-order 
premiums; 
Wholesale prices: Firm-level private cost-accounting company data for 
30 companies across the country; 
Retail prices: Bureau of Labor Statistics data based on retail prices 
in 91 areas; 

Model Description: Additional assumptions/variables/limitations: Unlike 
other studies, includes the wholesale market level in the model; 

Price Transmission Results: Timing/symmetry and degree of price 
transmission[A]: 
Timing/price asymmetry: Farm-to-wholesale: Asymmetric; 
Timing/price asymmetry: Farm-to-wholesale: Farm price increases: 
wholesale price adjusted in three quarters; 
Timing/price asymmetry: Farm-to-wholesale: Farm price decreases: 
wholesale price adjusted in one quarter; 

Timing/price asymmetry: Farm-to-retail: Asymmetric; 
Timing/price asymmetry: Farm-to-retail: Farm price increases: retail 
price adjusted in one quarter; 
Timing/price asymmetry: Farm-to-retail: Farm price decreases: retail 
price adjusted in 10 quarters; 

Degree of price transmission: Retail price adjustment: Asymmetric; 
Farm price increases: 173%; 
Farm price decreases: 92%; 

Price Transmission Results: Other model results: Wholesale prices 
exhibit short-run asymmetric responses to farm prices, while retail 
prices exhibit short-run and long-run, or irreversible, price 
adjustments; 
In this study, wholesale milk price adjustments were more rapid for 
farm price decreases than for farm price increases. 

[End of Hansen, Hahn, and Weimar]

[A] The degree or level of price transmission is represented by the 
percentage of full price pass-through from farm to retail. Some 
studies, however, measured instead the elasticity of price 
transmission, which is defined as the percentage change in the retail 
price of a product due to a 1 percent change in the corresponding farm 
price. As noted in the table, some studies do not measure the degree of 
price transmission or the elasticity of price transmission and only 
report on the timing and symmetry of transmission.

[B] The AAEA is the American Agricultural Economics Association.

[C] IRI stands for Information Resources, Inc.

[D] The Northeast Interstate Dairy Compact was a pricing program 
established by the 1996 Farm Bill that set a minimum price for raw milk 
to be used for and sold as fluid milk in the New England states of 
Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and 
Vermont. This program expired on September 30, 2001.

[E] The Milk Income Loss Contract program (MILC) is similar to the 
Compact, in that it is based on the Boston raw milk price and provides 
a partial subsidy to dairy farmers; however, it is funded through 
taxpayers rather than processors.

[F] The New York City price-gouging law (codified at NY Gen. Bus. §396-
rr) imposed a duty on the New York Commissioner of Agriculture and 
Markets to determine if prices of fluid milk are unconscionably 
excessive whenever the retail price of fluid milk exceeds 200 percent 
of the price for Class I fluid milk. The New York State Legislature 
passed this law, in part, because of a perceived lack of response in 
retail milk prices to decreases in farm prices.

[End of table]

Results on the Extent of Farm-to-Retail Price Transmission and Price 
Transmission Asymmetry: 

On both national and regional or citywide levels, the majority of the 
fluid milk studies that we identified found evidence of farm-to-retail 
price transmission asymmetry in price levels. While the studies 
estimated a wide range of price transmission levels, in general, the 
estimates of price transmission for initial farm price increases were 
greater than for farm price decreases.

National Level Results: 

The fluid milk price transmission studies that we identified using 
national aggregate data estimated a wide range of price transmission 
levels and generally found evidence indicating asymmetric price 
transmission--farm price increases were more fully transmitted to 
retail prices than farm price decreases. Using national average farm 
and retail prices for whole milk, Emerick (1994) and Wang (2003) 
developed two similar studies that identified the degree of price 
transmission nationally. While both studies used similar models, the 
Wang study used somewhat more recent data. Taken together, both 
studies' short-run results suggest that about 45 percent to 94 percent 
of farm price increases were passed along to the retail level, while 
only 31 percent to 41 percent of farm price decreases were similarly 
passed along. These studies estimated that in the long run, 
transmission levels for price increases ranged from 83 percent to 107 
percent, while transmission levels for price decreases ranged from 55 
percent to 64 percent. Both researchers found price asymmetry in the 
long run, but Wang also found price asymmetry in the short run. In his 
study of seven metropolitan markets across the country using data from 
1994 to 2003, Capps Jr. (2004) also identified price asymmetry in a 
majority of selected fluid milk markets for whole and 2 percent milk. 
Measuring the level of price transmission by using the elasticity of 
price transmission, he estimated elasticities for farm price increases 
ranging from 0.23 to 0.58 for whole milk and 0.11 to 0.46 for 2 percent 
milk. For farm price decreases, these elasticities were much lower, 
ranging from -0.02 to 0.12 for whole and -0.06 to 0.25 for 2 percent, 
respectively.[Footnote 116],[Footnote 117] Similarly, in Linkow et al. 
(2004), using an asymmetric friction model of 10 metropolitan markets 
across the country, the authors found evidence of price asymmetry--
retail prices were more responsive to cooperative farm price increases 
than decreases.

Regional and City-Level Results: 

Many studies that used regional or city-level data also estimated a 
wide range of price transmission levels as well as asymmetric price 
transmission. In an econometric model for whole, skim, 1 percent, and 2 
percent milk, Carman and Sexton (forthcoming 2005) estimated farm-to-
retail price transmission for nine metropolitan markets in the Western 
United States. Estimated levels of price transmission for all types of 
fluid milk combined for the California markets ranged from 56 percent 
in San Diego to 122 percent in Sacramento for price increases, and from 
49 percent in San Francisco to 110 percent in San Diego for price 
decreases. For the non-California markets, for both increases and 
decreases, the estimated levels of price transmission were much lower, 
ranging from 3 percent in Portland to 72 percent in Seattle for price 
increases and 6 percent in Phoenix to 83 percent in Salt Lake City for 
price decreases. The authors also noted that none of their price 
transmission parameters for all types of fluid milk for Portland was 
statistically different from zero, indicating no evidence that retail 
prices responded to farm price changes in this market.

Several researchers have also estimated farm-to-retail price 
transmission for markets in the Northeast United States. Lass et al. 
(2001) estimated price transmission in reference to the Northeast 
Interstate Dairy Compact for the Boston and Hartford metropolitan 
areas. For price increases, they found that the level of price 
transmission for a farm price increase was 58 percent for Boston and 48 
percent for Hartford. While Lass et al. only found price asymmetry in 
the short run, in a subsequent study, using more recent data, Lass 
(2004) found price asymmetry in the short run and in the long run. 
Using the New Empirical Industrial Organization approach, Chidmi, 
Lopez, and Cotterill (2004) found a similar result: a degree of price 
transmission of 68 percent for farm price increases for the Boston 
market.[Footnote 118] Within the same study, the authors also note that 
Cotterill (2003), in other research for Boston, estimated a pass-
through rate of between 20 and 26 percent for price decreases, 
suggesting price asymmetry in this market. In another study of the 
Boston market, using a two-stage market channel model, Dhar and 
Cotterill (2002) found that the firm-specific price pass through rate 
was 32 to 47 percent, while industrywide pass through was 88 to 100 
percent for price increases.[Footnote 119]

In yet another study of the Northeast market, Romain et al. looked at 
price asymmetry before and after the imposition of the New York price-
gouging law in 1991 and tested for price asymmetry using the elasticity 
of price transmission. Before the price-gouging law, they found that a 
1 percent increase in the farm price translated into a 0.70 percent and 
0.62 percent increase in retail prices in New York City and Upstate New 
York, respectively, while a 1 percent decrease translated into a 0.30 
percent and 0.49 percent decrease in these markets. After the law went 
into effect, they found that a 1 percent increase in the farm price 
translated into a 0.52 percent increase in retail prices in both New 
York City and Upstate New York, while a 1 percent decrease translated 
into a 0.43 percent and 0.51 percent decrease in these markets, 
respectively. Therefore, long-run price asymmetry was significant in 
both regions prior to the price-gouging law, but remained statistically 
significant only in New York City afterwards, though at a much lower 
level.

Results on Farm-to-Retail Speed of Adjustment and Price Transmission 
Asymmetry: 

We identified fewer studies that examined the speed of adjustment and 
related price asymmetry, or differences in the time required for farm 
and wholesale level price increases and decreases to be passed through 
to the retail level. Hansen et al. (1994), using national aggregate 
price data for whole milk, estimated that it took 3 months after the 
wholesale price increased for the retail milk price to increase, but 
that it took 30 months for the retail price to adjust to wholesale 
price decreases. In another study using national data, Wang (2003), 
using a structural model, found that, for farm price increases, retail 
prices adjusted more quickly in the first month after the increase and 
more slowly in subsequent periods. Conversely, for farm price 
decreases, the speed of price adjustment was slower in the initial 
month and increased in the following months, implying speed of 
adjustment asymmetry.

Nearly all of the studies of regional or metropolitan price 
transmission found asymmetry in timing--the price adjustment process 
for price decreases much exceeded that for farm price increases. Carman 
(1998) found a 1-month lag for price decreases and no lag for price 
increases in the California markets. In a later study, Carman and 
Sexton (forthcoming 2005) found that for the majority of cities they 
analyzed, the time lags estimated for price decreases generally 
exceeded those for price increases. For the four types of fluid milk, 
Carman and Sexton found that farm price decreases generally took from 1 
to 3 months to be transmitted to the retail level, while price 
increases took no more than 1 month. In the California markets, the 
authors found that, in general, retail prices responded more quickly to 
farm price increases than to decreases. Lass et al. (2001) found that 
for the Boston and Hartford markets, retail price adjustments to rising 
farm prices were much more rapid than similar adjustments to falling 
farm prices. Lass (2004) also found evidence of slower price 
transmission to the retail level when farm prices were falling. For 
markets in the Northeast, Frigon et al. (1999) reported short-run 
asymmetry in price adjustment for several markets: price adjustment was 
complete in Upstate New York after 2 months and in New York City and 
the Northeast United States after 3 months. The authors concluded that 
short-run asymmetry seemed to be milder in Upstate New York, because it 
lasted for only 2 months. In the long run, after 4 months, the 
Northeast United States, Upstate New York, and New York City (after 
enactment of the gouging law) markets had fully adjusted, with only the 
New York City (before enactment of the gouging law) market not fully 
adjusting.

Results for Retail-to-Farm Price Transmission and Price Transmission 
Asymmetry: 

Using data from 1971 through 1991, Emerick (1994) tested for causality 
in fluid milk pricing between the farm and retail levels and found that 
it was bidirectional. That is, the author found that for these data, in 
addition to farm price changes affecting retail prices, retail price 
changes also affect prices at the farm level. However, this 
specification resulted in some parameter values for retail-to-farm 
price transmission that were inconsistent with economic expectations. 
In a later study, Wang (2003) estimated results for retail-to-farm 
price transmission. In the short run, which was estimated to be 1 
month, the author found that price increases were immediately passed on 
to the farm level with a level of transmission of 94 percent, while 
price decreases were passed on at a level of 2 percent. However, in the 
longer run, which was estimated as 3 months, price increases were 
passed through at a level of 40 percent, while price decreases were 
passed through at a level of 34 percent. In the long-run specification, 
neither increases nor decreases in price were fully passed through. 
Thus, while the author found price asymmetry in the short run, she 
found price symmetry in the long run for retail-to-farm level price 
changes. As in Wang's farm-to-retail analysis, increases in the retail 
price were passed through nearly fully in the initial month, and then 
decreased substantially. However, although decreases in the retail 
price were not passed on initially, they were passed on at an 
increasing rate in the following months.

Possible Causes of Asymmetry in the Extent and Speed of Price 
Transmission: 

Even fewer economic studies have provided evidence on what causes price 
transmission and price transmission asymmetry. For the U.S. fluid milk 
market in particular, we found few studies that examined factors 
affecting the extent of price transmission and price transmission 
asymmetry. While two major explanations are cited in the economic 
literature as central to explaining price transmission and transmission 
asymmetry--noncompetitive markets and adjustment costs--there are 
several others cited, including the role of government policies, 
spatial market competition, substitution in processing technology, 
asymmetric information, economies of scale, and differentiated 
products. However, only the presence of noncompetitive markets and the 
effects of government policies were examined in the studies of price 
transmission that we identified.

Noncompetitive Markets: 

In general, economic research has found that a higher degree of market 
power can reduce the degree of price transmission.[Footnote 120] 
Particularly relevant to the fluid milk market, researchers have also 
shown that the number of vertical stages and the extent to which a 
market varies from the competitive norm both influence the degree of 
price pass through.[Footnote 121] Of the 14 studies that we examined, 
only 5 explored the role of competition in combination with the degree 
of price transmission and price transmission asymmetry in the milk 
marketing chain. In particular, 2 of these studies examined market 
power stemming from product differentiation of different milk types. 
The evidence from these studies is somewhat mixed. While 1 study did 
not find a linkage between market concentration and price transmission, 
other studies using a variety of methods did find evidence of either a 
lack of price transmission or price transmission asymmetry in markets 
that also possessed a degree of market power.

Carman and Sexton (forthcoming 2005), using multiple analytical 
techniques, found that fluid milk markets in the Western United States 
that displayed noncompetitive pricing also tended to lack price 
transmission and show price asymmetry. Using monthly data from 1999 
through 2003, the authors (1) analyzed the effects of horizontal 
differentiation among fluid milk types by ranking milk with different 
fat contents for different markets based on the costs that would be 
predicted under perfect competition, (2) performed correlation analysis 
between changes in the monthly farm and retail prices of milk with 
different fat contents, with a lack of correlation indicating the 
exercise of market power, and (3) analyzed price transmission, along 
with the estimated price transmission coefficients, to determine 
competition in the market.

In the first analysis, rank values for all milk types did not conform 
with price expectations, with the exception of whole milk for all the 
months in Seattle. Moreover, except in Portland, they found that the 
rankings of retail milk prices for whole, skim, 1 percent, and 2 
percent milk provided evidence of not being based on costs, as would be 
expected in perfect competition. For the price correlations, the 
results indicated that only a few product pairs in the nine markets 
have a high degree of interdependence, as one would expect for close 
substitutes. Low correlations ranging from nearly complete independence 
to moderate independence for at least one pair of products were evident 
in each market. For instance, retail price changes for skim milk 
appeared independent of other milk prices in Sacramento, Seattle, 
Portland, Salt Lake City, and Denver. The authors explained that these 
correlations all indicated pricing that was inconsistent with 
competitive pricing.

For the price transmission analysis, the estimated results differed 
among the California markets, depending on the city and type of milk. 
For instance, in certain California markets, such as Los Angeles and 
San Diego, farm price decreases lagged farm price increases by 2 to 3 
months, depending on the product, indicating price asymmetry in timing. 
Some of these price coefficients were consistent with competitive 
pricing and others were not. However, price transmission estimates for 
other metropolitan regions in the West (Seattle, Portland, Phoenix, 
Salt Lake City, and Denver) provided stronger evidence of 
noncompetitive pricing, and some also indicated price adjustment 
asymmetry, such as Salt Lake City and Phoenix. For these markets, only 
3 of the 40 estimated price transmission coefficients were consistent 
with perfect competition.

Using another model of horizontal product differentiation, a subsequent 
study by Sexton, Xia, and Carman (2004) econometrically estimated the 
timing of fluid milk price transmission and tested for market power for 
four California and five non-California cities from 1999 to 2003. While 
the results were somewhat mixed, hypothesis tests for the cities 
indicating oligopoly or monopoly scenarios also displayed more gradual 
price transmission results than those indicating more competitive 
scenarios, suggesting a link between noncompetitive market structures 
and a lack of price transmission.

Chidmi et al. (2004) estimated price transmission and market power for 
the Boston fluid milk market using the New Empirical Industrial 
Organization approach and data from 1996 through 2000. The empirical 
results of the model, in particular the conjectural variation 
elasticity, suggest that participants in this market may possess market 
power and that supermarkets do not ignore each other's actions.
[Footnote 122] Although the model did not account for speed of 
adjustment, the authors estimated a price transmission level of 68 
percent, suggesting that market power is associated with incomplete 
price transmission. A study by Frigon et al. (1999) includes a measure 
of market power, the four-firm concentration ratio, in its model of 
price transmission for Upstate New York and New York City. However, 
this variable did not prove to be significant. Later, in a similar 
study (Romain et al., 2002), the authors explain that their results of 
price asymmetry prior to 1991 in New York City were evidence that 
middlemen in the fluid milk market were exercising market power prior 
to the price-gouging law. The authors found that price asymmetry 
decreased after the law went into effect. They acknowledged, however, 
that to rigorously address the issue of a noncompetitive market, an 
alternative market power model would have to be developed.

Government Policies: 

Two studies looked at the effects of national government intervention 
on price transmission. Emerick (1994) and Wang (2003) both examined the 
question of whether changes in dairy policy, especially the reduction 
in the dairy price support level that began in the mid-1980s, had 
changed the nature of price transmission for dairy products. Both 
authors basically came to the same conclusions. Emerick noted that 
asymmetry is more likely to have occurred since 1988, adding that the 
greater price volatility may have caused some difficulties for 
retailers and wholesalers in determining the "appropriate" price. Wang, 
using additional data through 1997, found that reductions in the price 
support level tend to have a large impact on the fluid milk and nonfat 
dry milk price transmission relationships. In the fluid milk market, 
the farm-to-retail price transmission process became asymmetric, with 
the greater price volatility in the post-1988 period. While the degree 
of price transmission increased for both increases and decreases in 
price, it increased proportionately more for increases than for 
decreases.

Six of the studies examined price transmission in conjunction with 
other state and federal policies and programs, such as the New York 
price-gouging law and the Northeast Interstate Dairy Compact. Four 
studies, Lass et al. (2001), Lass (2004), Chidmi et al. (2004), and 
Dhar and Cotterill (2002), estimated price transmission while the 
Northeast Interstate Dairy Compact was in effect. Lass et al. found 
that processors and/or retailers did not fully pass through their price 
increases and, in fact, may have absorbed part of the cost of the 
Compact's over-order premium. In his 2004 study, Lass explained that 
the greater variation in farm prices that occurs without the Compact 
would actually lead to higher retail prices because of the larger 
estimated impacts on retail prices of increasing farm prices than 
decreasing farm prices. Dhar and Cotterill disagreed and contended in 
their study that the risk reduction benefit from the Compact was 
completely overpowered by a shift toward tacit collusion in the post-
Compact period. In the studies of New York markets (Frigon et al., 
1999, and Romain et al., 2002) that looked at the effect of the price-
gouging law, researchers found that after the law took effect, price 
asymmetry was not present or was present at much lower levels.

[End of section]

Appendix VII: Effects of Recent Federal Dairy Program Changes and 
Alternative Policy Options: 

Recent changes in federal dairy programs vary in their effects on 
policy considerations that we identified, such as farm income, milk 
production, federal costs, price volatility, economic efficiency, and 
consumer prices.[Footnote 123] A number of options have been proposed 
or discussed to further modify existing programs or introduce 
alternative policies, all of which could affect these policy 
considerations in different ways. The likely effects of these program 
modifications or alternative policies are influenced by prevailing 
conditions, such as high and low dairy prices, and may be different in 
the short and long terms.

Recent Changes in Federal Dairy Programs Vary in Their Effects on 
Policy Considerations We Identified: 

Since 2000, three major changes have taken place in federal dairy 
programs. First, in response to legislative requirements, the U.S. 
Department of Agriculture (USDA) reformed the federal milk marketing 
order (FMMO) system. Second, USDA adjusted the relative purchase prices 
of butter and nonfat dry milk under the price support program. Finally, 
Congress authorized and USDA established the Milk Income Loss Contract 
(MILC) program. These changes had mixed effects on the policy 
considerations included in our analysis. Reforms to the FMMO system had 
mixed effects on farm income, depending on the geographic location of 
the farmer, while the overall effects on all farmers are less clear. 
Because of their effect on fluid milk prices, changes in the price 
support program tended to reduce the level of support for farm income 
and reduce federal costs, but increase economic efficiency. 
Introduction of the MILC program typically had the opposite effects, 
while maintaining production.

Federal Milk Marketing Order Reforms: 

In carrying out requirements in the Federal Agriculture Improvement and 
Reform Act of 1996 to reform FMMOs, USDA conducted extensive research 
and held public hearings. Agricultural Marketing Service (AMS) 
officials indicated that as a result of this process USDA implemented 
reforms to the FMMO system in January 2000 that were consistent with 
the findings of its research. Its major reforms included: 

* consolidating the number of marketing orders from more than 30 to 
11;[Footnote 124]

* changing the classified pricing structure by creating a new class for 
manufactured milk products, Class IV, with the "higher of" the 
advanced[Footnote 125] Class III or Class IV skim milk values as the 
basis--or mover[Footnote 126]--for Class I prices; reducing the lag 
between the Class I and Class III and IV price announcements; and 
establishing a fixed differential of $0.70 per hundredweight to be 
added to the advanced Class IV skim milk value in determining the price 
to be paid for milk used in Class II products;

* introducing a new product formula pricing system; and: 

* relaxing restrictions on pooling milk in some marketing 
orders.[Footnote 127]

USDA implemented additional reforms to the classified pricing system in 
April 2003 that modified aspects of the Class III and IV pricing 
formulas.[Footnote 128]

Federal Order Consolidation: 

In response to the legislative requirement, USDA reduced the number of 
FMMOs to 11, which were typically combinations of pre-existing 
orders.[Footnote 129] For example, the Central Order is a combination 
of several smaller marketing orders in the central part of the United 
States. According to USDA's final regulatory impact analysis for the 
order reforms, these consolidation decisions were based on structural 
factors such as milk movement, the number of market participants, and 
natural boundaries.[Footnote 130]

USDA officials and other dairy experts told us that nationally, the 
prices received by farmers for their raw milk did not change much as a 
result of FMMO consolidation. One academic study reported that order 
consolidation probably increased the economic efficiency of the FMMO 
system by more closely aligning areas where raw milk is marketed by 
dairy farmers with areas where it is distributed as fluid milk 
products. Additionally, the study noted that consolidation helped to 
reduce the amount of market distortion created by order regulation.

However, the magnitude of the effects on farm income varied among 
orders because, in some cases, the consolidation combined orders that 
had substantially different raw milk utilization rates for the 
manufactured and fluid products in the various milk classes, 
particularly Class I (fluid milk). As a result, some dairy farmers 
experienced higher or lower utilization of their raw milk in Class I 
products than they had in the past. Changes in utilization rates are 
significant because farmers receive a blend price for their milk based 
on the utilization rates for the different milk classes within an 
order; thus, farmers in orders where Class I utilization rates 
increased generally saw their incomes increase, while farmers in orders 
where the Class I utilization rates decreased generally had their 
incomes reduced.

The changes in utilization rates associated with FMMO consolidation 
were particularly evident in the Western Order. When USDA created the 
Western Order, it combined the Great Basin and the Southwestern Idaho-
Eastern Oregon Orders. These orders had substantially different Class I 
utilization rates. In 1999, the Great Basin Order had a Class I 
utilization rate of 51 percent, while the Southwestern Idaho-Eastern 
Oregon Order had a Class I utilization rate of 8 percent. When these 
orders were combined into the Western Order, the resulting Class I 
utilization rate was estimated to be about 23 percent, lowering income 
for the farmers in the Great Basin Order who had previously received 
much higher blend prices. To address this and other concerns, Dairy 
Farmers of America, a cooperative representing a number of farmers in 
the Western Order, requested that USDA hold a hearing to reform the 
order's provisions. USDA made some changes based on the concerns 
presented at the hearing; however, the revised order provisions did not 
receive the two-thirds approval necessary to be adopted, and USDA 
terminated the order as of April 1, 2004, stating that the continuation 
of the existing Western Order would not be in conformance with declared 
policy.[Footnote 131]

Elimination of the Western Order has raised concerns that increased 
amounts of Idaho milk, which had been pooled on the Western Order, 
would be pooled on the Upper Midwest Order. Based on past experience, 
this would reduce the Class I utilization rate and lower the blend 
price for Upper Midwest farmers. However, dairy experts had mixed views 
on whether additional orders would be terminated. In particular, one 
industry expert noted that it remains unclear whether farmers in the 
former Western Order will be able to receive higher prices for their 
milk without their order. Some of these farmers, particularly those 
that had been in the Great Basin Order, could benefit by not having to 
pool their Class I milk. On the other hand, one source stated that 
these farmers could face increased shipping requirements to pool their 
milk on a remaining order. Additionally, some experts stated that 
without FMMOs farmers and cooperatives do not have the market power to 
obtain high prices for their raw milk in negotiations with processors.

Classified Pricing Structure Changes: 

FMMO reform changed the structure of the classified pricing system by 
creating a new Class IV, representing the minimum price that processors 
pay for raw milk used in butter, nonfat dry milk, and other dry milk 
powders.[Footnote 132] Additionally, the new mover of Class I prices 
became the "higher of" the advanced Class III or Class IV skim milk 
values. Use of the "higher of" mover was intended to enable fluid milk 
processors to attract milk from butter, nonfat dry milk, and cheese 
processors by helping to ensure that the blend price would exceed both 
the Class III and IV prices. USDA also reduced the lag period--the time 
between when the Class I price is announced and the Class III and IV 
prices are announced--from approximately 8 weeks, to 6 weeks. Class I 
prices are announced in the month preceding the month to which they 
apply, based on the "higher of" the advanced Class III and IV skim milk 
values.[Footnote 133] However, the Class III and IV prices that 
determine the price of raw milk used to manufacture these products are 
not announced until the Friday on or before the 5th of the month 
following the month to which they apply. Consequently, there is a 6-
week lag between these two price announcements. Further, USDA 
established that the minimum prices paid for skim milk used in Class II 
products would be the advanced Class IV skim milk and butterfat values, 
plus a fixed differential of $0.70 per hundredweight.[Footnote 134] In 
its March 1999 regulatory impact analysis, USDA concluded that these 
changes would help to eliminate situations in which prices of milk used 
in manufactured products rise above the price of milk used in fluid 
milk products and thus make the Class I mover more representative of 
current market conditions.

Academic researchers and an industry official indicated that the 
creation of Class IV continued disincentives that were present prior to 
the 2000 reforms to shift milk to its highest-valued use. Previously, 
separate minimum prices were established for raw milk used in 
manufactured products that are now included in the new Class IV. Raw 
milk used in the production of butter was priced under Class III, which 
also included cheese and other products. However, nonfat dry milk was 
priced in a separate Class III-A. According to AMS officials, the 
development of Class III-A was necessary because manufacturers were 
unable to sell nonfat dry milk at market prices that would allow them 
to pay the Class III minimum price for their raw milk. They noted that 
for a classified pricing system to work, the minimum class prices must 
be below the market clearing prices for products produced with that raw 
milk (taking into account the cost of other inputs to these products). 
However, one study found that the creation of Class IV 
institutionalized separate pricing for nonfat dry milk.[Footnote 135] 
By separating out the price for nonfat dry milk (the lowest-valued 
use), the classified pricing system might maintain production of nonfat 
dry milk even when market signals indicate that raw milk should be used 
to manufacture cheese as the higher-valued use.

Additionally, a 2004 study sponsored by the American Farm Bureau 
Foundation for Agriculture (American Farm Bureau) reported that 
creating a separate Class IV and then basing Class I prices on the 
"higher of" the advanced Class III or IV skim milk values, has reduced 
the influence that cheese prices traditionally had over other prices in 
the FMMO system, and thus partially isolated Class I prices from market 
forces.[Footnote 136] For example, in every month from January 2000 
through July 2001, advanced Class IV skim milk values were higher than 
advanced Class III skim milk values. However, as of 2000, utilization 
of milk for Class IV products across all federal orders averaged 7 to 8 
percent, while Class III products accounted for about 45 percent of 
milk utilization.[Footnote 137] According to the American Farm Bureau 
study, without the advanced Class III skim milk value as the mover for 
Class I prices, when the Class IV price exceeds the Class III price, 
similar price signals are no longer received by farmers in relatively 
high Class I utilization markets and in high Class III utilization 
markets. This difference occurs because during these times farmers in 
high Class I utilization markets are receiving their price signals 
based on the high Class IV prices, which are heavily influenced by the 
price support program during periods of excess production and low 
manufacturing product prices. Therefore, farmers in high Class I 
utilization areas receive higher farm prices than would otherwise be 
the case, and higher prices encourage increased production by these 
farmers. However, the higher production levels of these farmers puts 
downward pressure on the Class III prices and causes regional 
inequities in farm income.

Furthermore, because Class I prices are now more closely related to the 
level at which the price support program sustains nonfat dry milk 
prices, proposed changes to the price support program have become much 
more controversial. Prior to the 2000 FMMO reforms, Class I prices were 
based on the Class III price, which, as noted previously, did not 
include nonfat dry milk. However, with the 2000 reforms, the level of 
support provided by the price support program for nonfat dry milk 
prices directly influences the Class IV price. During periods when the 
Class IV price is higher than the Class III price, changing the price 
support program in such a way that Class IV prices are reduced will 
cause the Class I price to similarly fall, thus having a greater impact 
on the overall blend prices received by farmers.

Introduction of a New Product Formula Pricing System: 

As part of FMMO reform, USDA introduced a new product formula pricing 
system that established minimum prices for raw milk based on milk 
component values for butterfat, protein, nonfat solids, and other 
solids. These values are derived from the wholesale prices of cheddar 
cheese, butter, nonfat dry milk, and dry whey as announced in weekly 
surveys conducted by the National Agricultural Statistics 
Service.[Footnote 138] The minimum prices also factor in allowances 
based on estimates of manufacturing costs for these products and 
product yield factors representing the amount of a particular product 
that can be manufactured from specified quantities of the underlying 
components. Seven of the 11 orders (primarily the Northern orders) 
adopted the new product formula pricing system, while the other four 
orders (primarily the Southern orders) use a pricing system that bases 
milk prices on skim milk and butterfat.[Footnote 139]

During much of the time that classified pricing has been part of the 
federal order system, the formulas used to set minimum prices paid to 
farmers were based on competitive pay prices. The pay price was known 
as the Minnesota-Wisconsin price, and it represented the results of 
state surveys of competitive market prices for Grade B milk paid by 
manufacturing plants in Minnesota and Wisconsin. However, with a 
reduction in Grade B milk production, this milk was very thinly traded 
and the pricing series became less representative of the value of Grade 
A milk used for manufacturing.[Footnote 140]

According to a number of dairy experts, the change from a competitive 
pay to a product formula pricing system that incorporates fixed 
manufacturing allowances has enhanced the effects of price volatility 
on dairy farmers.[Footnote 141] As noted in appendix V, there are a 
variety of input costs to the manufacturing process, including labor, 
energy, and capital. With product formula pricing, manufacturing 
allowances, which are supposed to compensate for these other input 
costs, and product yield factors are fixed. To the extent that changes 
in these other input prices are reflected in the prices at which 
manufacturers sell their products, fixed manufacturing allowances will 
allow changes in other input costs to more readily affect the minimum 
raw milk prices paid to farmers.

Dairy experts also indicated that the fixed manufacturing allowances in 
the product pricing formulas reduced economic efficiency by reflecting 
raw milk supply and demand conditions less clearly. Moreover, one large 
processor stated that the manufacturing allowances in the pricing 
formulas are too low and do not adequately represent the costs of 
manufacturing.[Footnote 142] Regardless of the market price of cheese, 
butter, or nonfat dry milk, the fixed manufacturing allowances provide 
manufacturing plants with the same net returns from 100 pounds of raw 
milk. Therefore, when market conditions reflect higher prices for one 
of these products, relative to the others, manufacturers have less of 
an incentive to shift production to the higher-valued use because any 
gains they might have realized from selling a higher-priced product 
would be negated by the fact that their manufacturing allowance is 
fixed.[Footnote 143] The 2004 American Farm Bureau study noted that 
prior to the introduction of the new product formula pricing system, 
manufacturers that produced butter, cheese, and nonfat dry milk 
competed more aggressively for raw milk. The study found that if the 
prices of nonfat dry milk and butter, for example, were depressed 
relative to cheese prices, cheese manufacturers would attract milk away 
from the manufacturers of these other products. Therefore, raw milk 
would more readily move to its highest-valued use.[Footnote 144]

Further, some dairy experts noted that the additional volatility 
introduced by the fixed manufacturing allowances in the new product 
formula pricing system, when combined with the disincentives these 
allowances and separate manufacturing classes create against shifting 
milk to its highest-valued use, might have contributed to negative 
producer price differentials[Footnote 145] and de-pooling.[Footnote 
146] Negative producer price differentials can occur because with the 
6-week lag between the Class I and Class III and IV price 
announcements, rapid increases in the manufactured product prices from 
which Class III and IV prices are derived can raise these prices above 
the Class I price.[Footnote 147] USDA officials noted that the change 
to a "higher of" mover for Class I prices and the reduction of the lag 
period were designed to reduce the frequency of negative producer price 
differentials. However, to the extent that the fixed manufacturing 
allowances have introduced additional volatility into the pricing 
system, and the disincentives created by these fixed manufacturing 
allowances and separate manufacturing classes have prevented raw milk 
supplies from moving to their highest-valued use, negative producer 
price differentials and de-pooling have continued.

During times when the producer price differential is negative, some 
processors of manufactured products who normally receive a draw from 
their federal order pool to pay farmers instead have to pay into the 
pool. In such circumstances, many of these processors choose to de-pool 
because by doing so, they gain a competitive advantage over those that 
remain and have to pay into the pool.[Footnote 148] One study on FMMO 
pooling issues reported that since June 2003, negative producer price 
differentials and de-pooling have become more common.[Footnote 149] The 
study noted that the producer price differential in the Upper Midwest 
Order was negative from July through November 2003 and reached a record 
low level in April 2004 of $4.11 per hundredweight. For example, cheese 
prices in the Upper Midwest Order began to rise sharply in mid-July 
2003; thus the advanced Class III skim milk value that served as the 
Class I mover for August did not include these higher prices. However, 
the Class III price that was announced in August did include these 
higher prices, creating a negative producer price differential. As a 
result, a number of cheese processors de-pooled in August, reducing the 
order's Class III utilization, which is usually around 75 to 77 
percent, to just 8.4 percent. Nationally, negative producer price 
differentials were reported for this month in the 7 FMMOs that used the 
new product formula pricing system. For the 11 FMMOs existing at the 
time, de-pooling resulted in 33 percent less milk being pooled compared 
to the same month in the prior year.

De-pooling reduces the overall value of the federal order pool and 
increases differences in the abilities of processors to pay for raw 
milk. As a result, dairy farmers do not receive uniform prices. Farmers 
marketing milk with processors who are able to de-pool may receive 
higher prices and thus an increase in farm income, while farmers 
marketing milk with processors who do not de-pool may receive lower 
prices. According to the June 2004 University of Wisconsin study, this 
situation represents an inequity and is contrary to one of the stated 
purposes of the FMMO system: orderly marketing conditions.

Relaxed Pooling Provisions: 

In some cases, the 2000 FMMO reforms resulted in more relaxed pooling 
provisions. AMS officials noted that when USDA consolidated the 
marketing orders, the pre-existing orders each had its own pooling 
provisions, such as minimum amounts of raw milk required to be shipped 
to processing plants participating in that order's pool to qualify for 
its blend price or restrictions on rejoining the pool after de-
pooling.[Footnote 150] AMS officials indicated that where two orders 
were combined that had different pooling provisions, USDA applied the 
more liberal pooling standard to the combined order to prevent farmers 
from being shut out of the consolidated order pool.

According to AMS reports from 2000 and 2001, relaxed pooling provisions 
contributed to the pooling of more distant raw milk to receive other 
orders' attractive blend prices. Pooling was easier because most of the 
milk that was pooled from outside individual federal orders was not 
required to actually be shipped to those orders. Therefore, distant 
farmers were able to share in an order's blend price without incurring 
substantial transportation costs for shipping milk. For example, under 
the Upper Midwest Order's pooling provisions, an Idaho dairy 
cooperative could choose to ship raw milk from some of its Idaho 
farmers to a processing plant that participates in the Upper Midwest 
Order. All subsequent milk deliveries of those designated farmers would 
be priced under the Upper Midwest Order, even if only one day's 
production was actually shipped to the participating processing plant. 
Other deliveries from these farmers would stay in Idaho for processing. 
In 2001, USDA reported that raw milk from California was pooled on the 
Central, Upper Midwest, and Western Orders. However, most of this 4 
billion pounds of milk was actually processed in California plants that 
are not regulated by the federal order system. Also during 2001, large 
volumes of raw milk from Minnesota and Wisconsin were pooled on the 
Central, Mideast, and Northeast Orders, while increasing amounts of raw 
milk from Idaho were pooled on the Upper Midwest Order.

According to some dairy experts, the increased pooling of milk across 
orders has had mixed effects on farm income. Those farmers who were 
able to have their milk pooled on distant orders that had higher blend 
prices received an increase in their farm income after accounting for 
the costs of transporting their milk. However, farmers in the receiving 
orders had their farm income reduced as milk from outside the orders 
reduced the value of the pool that could be shared among farmers in the 
receiving orders. The combination of more milk pooled on these orders 
and constant sales of higher-valued Class I and II products decreased 
the weighted average value of the orders' pools by decreasing the 
utilization rates of the higher-valued classes.

In response to this loss in value, participants in some orders 
petitioned USDA to hold hearings to address relaxed pooling provisions. 
For example, through the hearing process, the Central and Mideast 
Orders tightened their pooling provisions to control the large 
quantities of milk from Minnesota and Wisconsin that were being pooled 
on these two orders. With these tightened provisions, those seeking to 
pool milk on the Central or Mideast Orders have to ship more milk per 
year or meet other requirements to become eligible to share in the 
receiving orders' blend prices. A number of dairy experts indicated 
that these changes have significantly reduced the incentive for distant 
pooling on these orders.

2003 Classified Pricing Reforms: 

USDA made additional reforms to the classified pricing system that went 
into effect in April 2003, modifying aspects of the Class III and IV 
pricing formulas. The principal changes in 2003 were increasing the 
manufacturing allowance in the formula that established a price for the 
other solids component of milk used in Class III products; eliminating 
the lower bound of zero on the Class III other solids component 
price;[Footnote 151] reducing the product yield for the nonfat solids 
components of milk used in Class IV products; and altering the Class 
III protein formula to prevent Class III prices from being lowered by 
rising butter prices. The 2003 changes were partly the result of a 
court-ordered injunction against the implementation of other changes 
that USDA had proposed based on the 2000 requirement that USDA 
reconsider the Class III and IV pricing formulas.

An analysis by researchers at the University of Wisconsin before 
implementation of the changes indicated that the differences from many 
of these changes would not be dramatic.[Footnote 152] However, the 
researchers estimated that the changes would increase Class III prices 
by as much as $0.57 per hundredweight. More specifically, the study 
found that the 2003 changes would eliminate the negative effect that 
rising butter prices were having on the Class III price. Under the 
prior protein price formula, a $0.10 per pound increase in the butter 
price would lower the Class III price by $0.04 per hundredweight. The 
researchers found that the revised formula instead yields about a $0.04 
per hundredweight increase in the Class III price for a $0.10 per pound 
increase in the butter price. The study also reported that the new 
protein price formula would make it somewhat less likely that the 
advanced Class IV skim milk value rather than the advanced Class III 
skim milk value would consistently serve as the mover for Class I 
prices.[Footnote 153] Increased Class III prices would most likely 
benefit farmers in areas where cheese is an important commodity and 
where processors do not typically pay premiums in excess of federal 
order minimum prices.

Dairy Price Support Program Adjustments: 

Since 2000, USDA twice adjusted--or tilted--the purchase prices of 
butter and nonfat dry milk as part of its efforts to administer the 
dairy price support program. The first tilt occurred in May 2001, when 
USDA reduced the nonfat dry milk purchase price by approximately $0.10 
per pound (to $0.90 per pound) and increased the butter purchase price 
by about $0.20 per pound (to approximately $0.85 per pound). USDA 
adjusted the tilt again in November 2002 by reducing the nonfat dry 
milk purchase price another $0.10 per pound (to $0.80 per pound) and 
increasing the butter purchase price approximately $0.20 per pound (to 
$1.05 per pound). USDA took these actions because the Commodity Credit 
Corporation (CCC) was accumulating large stocks of nonfat dry milk, 
leading to high purchase and storage costs for USDA, as well as 
significant market distortions.

As a result of the 2000 FMMO reforms, the federal order class prices 
and the level of support provided by the price support program for 
nonfat dry milk were tied more closely. Many dairy experts noted that, 
subsequently, tilts became more politically controversial because they 
can have a greater negative effect on the FMMO class prices. Lowering 
the purchase price of nonfat dry milk while raising the purchase price 
of butter decreases the overall Class IV price when market prices for 
nonfat dry milk are at the level of the purchase price and market 
prices for butter are above the level of the purchase price. When the 
advanced Class IV skim milk value is serving as the mover for the Class 
I price, this reduction in Class IV prices also reduces Class I prices. 
Further, because the advanced Class IV skim milk value serves as the 
basis for Class II prices, Class II prices are similarly reduced. This 
scenario occurred during both the May 2001 and November 2002 tilts. A 
representative of one dairy cooperative stated that these impacts were 
particularly pronounced in areas with high Class I utilization rates, 
such as the Northeast and Southeast.

According to a report published by the International Trade Commission 
in May 2004, estimates of the actual impacts of these tilts on farm 
prices varied.[Footnote 154] The study presented a USDA estimate that 
the November 2002 tilt reduced fiscal year 2003 average milk prices 
from $12.10 to $11.90 per hundredweight. While USDA reported that this 
decrease lowered the amount of raw milk produced and thus was partially 
offset by an increase in butter prices from reduced production, it 
still led to a loss in net farm income of $192 million.[Footnote 155] 
Alternatively, the study reported that the National Milk Producers 
Federation estimated that the two tilts ultimately lowered farm prices 
by $0.19 per hundredweight in 2001, $0.48 per hundredweight in 2002, 
and $0.76 per hundredweight in 2003. With these price reductions, the 
organization projected that farm income would fall by $156 million in 
2001, $816 million in 2002, and about $1.3 billion in 2003. Another 
study cited by the International Trade Commission's report estimated 
that the 2002 tilt could have decreased average milk prices by $0.16 
per hundredweight, reducing production by 814 million pounds and farm 
income by $371 million. However, that study also found that these 
impacts varied substantially, depending upon the assumption of high or 
low prices and the effects of other government programs.

While the tilts reduced farm income and raw milk production, a number 
of dairy experts indicated that USDA's tilts have increased economic 
efficiency and reduced federal costs associated with the dairy price 
support program. Additionally, some experts noted that by maintaining 
nonfat dry milk prices at artificially high levels, the price support 
program was inducing surplus production of nonfat dry milk. In some 
cases, nonfat dry milk was produced specifically for sale to the 
government at the CCC purchase price. From the beginning of October 
2000 through the end of May 2001, the CCC purchased approximately 330 
million pounds of nonfat dry milk (more than 40 percent of national 
production), and government purchase costs exceeded $340 million. 
Furthermore, in 2002, the CCC stocks of nonfat dry milk were equivalent 
to two-thirds of domestic production and exceeded annual domestic 
consumption by more than 30 percent. By reducing the purchase price of 
nonfat dry milk, USDA reduced the incentive to produce surplus nonfat 
dry milk. The International Trade Commission study reported that while 
production of nonfat dry milk continued to rise between 2001 and 2002, 
after the second tilt production declined by about 5 percent between 
2002 and 2003. The tilts also helped to reduce federal costs associated 
with purchasing and storing nonfat dry milk.

Some sources also indicated that the tilts affected the balance of 
trade in dairy products between the United States and its trade 
partners. The International Trade Commission study reported that during 
the majority of the period from January 1998 to November 2002, U.S. 
prices for nonfat dry milk exceeded international market prices by more 
than $500 per metric ton. Consequently, domestic manufacturers had an 
incentive to import alternative dairy protein products such as milk 
protein concentrates. By lowering the purchase price of nonfat dry milk 
through the tilts, USDA decreased this incentive because domestic 
manufacturers could obtain nonfat dry milk more cheaply.

Introduction of the Milk Income Loss Contract (MILC) Program: 

With the introduction of the MILC program in 2002, dairy farmers began 
receiving payments on milk production up to 2.4 million pounds annually 
when the Class I price in Boston dropped below $16.94 per 
hundredweight. MILC payments are equal to 45 percent of the difference 
between $16.94 and the lower Boston Class I price. From the program's 
inception, MILC payments were made every month from the retroactive 
start date of December 2001 through August 2003 because there was an 
extended period of depressed farm prices, which reached a 25-year low 
in early 2003. Prices temporarily recovered from September through 
December 2003, so no MILC payments were made in those months; however, 
payments resumed during January and continued through April 2004. 
During the spring of 2004, farm milk prices reached record highs and 
remained strong through the fall of 2004, so no MILC payments were 
required for the remainder of fiscal year 2004.

As a result of depressed farm milk prices during 2002 and 2003, federal 
costs associated with MILC payments exceeded original estimates. Based 
on market conditions in March 2002, the Congressional Budget Office 
estimated total federal costs of the MILC program at $963 million over 
the life of the program (i.e., about 4 years). However, 1 year later, 
the Congressional Budget Office revised its total cost estimate for the 
MILC program to $4.2 billion. USDA distributed approximately $1.8 
billion in MILC payments to dairy farmers in fiscal year 2003.[Footnote 
156] Thus, the cost of MILC through fiscal year 2003 alone exceeded the 
previously estimated total costs for the entire 4-year period through 
2005 by about $800 million. The Congressional Budget Office's March 
2004 estimate for total MILC program costs was $3.8 billion, somewhat 
lower than the 2003 estimate because of higher farm milk prices in 
2004.[Footnote 157]

Many dairy experts indicated that by providing income support during 
low-price periods, the MILC program has helped keep some farmers, 
particularly smaller farmers, in business.[Footnote 158] For example, 
some academic experts noted that some farmers received MILC checks of 
about $20,000 to $25,000, and others said that despite low prices, 
fewer farmers exited the market in 2003 than in previous years. USDA 
officials indicated that these payments delayed the supply response to 
low prices and maintained depressed milk prices over a longer period of 
time. By providing direct payments when prices were low, MILC obscured 
market signals that would normally cause farmers to decrease 
production, and continued high levels of production retained downward 
pressure on milk prices. To the extent that these lower farm prices 
were passed on through the retail level, consumers may have experienced 
lower prices for dairy products.

Despite this effect, dairy experts stated that smaller farmers receive 
a net benefit from MILC because those with about 100 to 130 cows can 
have all of their production covered under the 2.4 million-pound annual 
cap. In contrast, larger farmers do not receive net benefits from MILC 
because the negative farm income effects of reduced milk prices are 
greater than the payments they receive under the production cap. A 
couple of dairy experts noted that the break-even size, at which MILC 
payment benefits just offset the negative farm income effects of 
prolonged low prices, is about 400 cows. Because the effects of MILC 
vary by producer size, they also vary regionally. States with many 
small dairy farmers, such as Pennsylvania, Wisconsin, and Vermont, have 
received greater proportional benefits from MILC. However, the MILC 
program has disadvantaged states with larger producers, such as western 
states.

Effects of Alternative Dairy Policies Differ under Various Scenarios: 

A number of options have been proposed or discussed to further modify 
existing programs and policies or introduce alternative ones, all of 
which could affect the policy considerations we identified in different 
ways. These options span a range of existing and potential federal 
dairy programs and policies, including FMMOs, price supports, MILC, 
target price deficiency payments, the proposed National Dairy Equity 
Act, trade restrictions and export incentives, risk management, and 
supply management. Current international trade agreements and ongoing 
negotiations can have implications for certain of these policy options, 
such as price supports, export incentives, and trade 
restrictions.[Footnote 159] The purpose of this analysis is not to take 
a position for or against any of these options or to analyze them in 
terms of their overall economic impacts, but simply to discuss their 
likely effects on the policy considerations we identified. The likely 
effects of these alternatives sometimes differ under various scenarios, 
such as high or low prices, and may be different in the short and long 
terms.

In general, options that increase farm income over the short term also 
tend to increase milk production and thus the potential for oversupply 
and lower average farm prices over the long term.[Footnote 160] These 
options also tend to be costly for the federal government during 
periods of low prices. In some cases options that increase the economic 
efficiency of federal dairy programs also increase price volatility 
because they allow clearer transmission of market price 
signals.[Footnote 161] Further, to the extent that price changes at the 
wholesale level are passed through to the retail level, a number of 
options would likely have mixed effects on consumer prices depending 
upon the particular product under consideration (e.g., butter, cheese, 
or fluid milk). The potential impacts of the options also vary 
according to the size of the producer and region of the country. In 
general, options that affect farm income without respect to farm size 
or cost of production could further shift production towards larger, 
western farms. Production shifts toward larger farms could increase the 
potential for oversupply in the market, because such farms have a 
greater capacity to increase production in response to policy 
incentives. In some cases, options that reduce support for farm income 
could have disproportionately negative impacts on smaller farmers, who 
often have higher costs of production.[Footnote 162]

Change the Federal Milk Marketing Order Program: 

Dairy experts have cited a number of concerns with FMMOs, including 
that with the increasing ability to transport milk products longer 
distances, the differences in Class I differentials provide incentives 
for overproduction in some regions; that recent revisions to the 
classified pricing system enhanced the effects of price volatility on 
dairy farmers; that changes in pooling restrictions increased the flow 
of milk between different regions of the country, which disrupts the 
market; that consolidation of the FMMOs combined some areas of the 
country that were not part of the same natural "milksheds;" and that it 
takes too long to change the federal order system through the USDA 
hearing process. A number of options have been proposed or discussed to 
modify the FMMO program, including revising the classified pricing 
system, making administrative changes such as tightening pooling 
provisions, or eliminating FMMOs altogether. Figure 36 shows the 
effects of various options to change the FMMO program over the short 
and long terms.

Figure 36: Potential Effects of Options to Change FMMOs on Various 
Policy Considerations: 

[See PDF for image] 

Note: The figure does not indicate the degree of increase or decrease 
for each policy consideration as it relates to a policy option. In 
addition, as discussed in this appendix, limitations affecting some 
policy options could affect the degree of an option's potential impact 
on a policy consideration.

[End of figure] 

Revise Classified Pricing: 

Academic, industry, and government sources cited a variety of concerns 
with recent reforms in the classified pricing system, including that 
these changes enhance the effects of price volatility on farmers; 
lessen the transmission of market price signals; reduce incentives for 
market participants to shift milk to its highest-valued use; discourage 
innovation; and contribute to de-pooling during periods of price 
volatility. A number of options exist to revise the classified pricing 
system, including basing the class pricing formulas on competitive pay 
prices instead of product prices, combining Class III and IV into a 
single manufacturing class of milk, and changing the Class I mover from 
being the "higher of" the advanced Class III or IV skim milk values to 
a weighted average of these prices.

Use Competitive Pay Prices Instead of Product Formula Pricing: 

One option to reform the classified pricing system would be to return 
to a system of competitive pay prices as the basis for the minimum 
prices that manufacturers pay for raw milk. As indicated by AMS 
officials, the change to a product formula pricing system has enhanced 
the effects of price volatility on the prices that farmers receive for 
their raw milk. The AMS officials, as well as academic and industry 
sources, noted that competitive pay prices for raw milk would be a 
better basis for the minimum class prices. However, the officials noted 
that the lack of good data is a major challenge to developing a 
competitive pay system that is more broadly based than the old 
Minnesota-Wisconsin price series.[Footnote 163]

In an earlier report, we compared the concept of a competitive pay 
system to a product formula pricing system, among other 
options.[Footnote 164] We found that while a product formula pricing 
system would be superior to other mechanisms in reflecting national 
prices of manufactured dairy products, the accuracy of price levels 
under the system would depend on a number of factors, including whether 
the manufacturing allowances--deductions made for the costs of 
manufacturing different dairy products--are accurate. Setting accurate 
manufacturing allowances is difficult because individual plants could 
have different cost structures. As noted earlier, we heard from several 
academic, industry, and government sources that the fixed manufacturing 
allowances in the current product pricing formulas have negative 
impacts on the economic efficiency of the classified pricing system by 
reflecting supply and demand conditions less clearly.[Footnote 165]

On the other hand, we found that while a competitive pay system for 
Grade A milk was similar to a product formula pricing system in that it 
would generally reflect national prices of manufactured dairy products, 
it would more readily reflect national supply and demand conditions for 
raw milk used for manufacturing. Also, it would more accurately reflect 
competitive pressures from the fluid milk market because Grade A milk 
is used to meet shortages in areas of the country with high Class I 
utilization. Furthermore, we reported that a competitive pay system 
would be better than a product formula pricing system at self-adjusting 
automatically because the competitive system would be based on actual 
reported prices. Therefore, a competitive pay system could improve the 
economic efficiency of the classified pricing system by providing 
clearer market price signals.

AMS officials stated that if it were possible to obtain adequate data, 
returning to a competitive pay system would introduce greater stability 
into farm milk prices because basing the price formulas on competitive 
pay prices allows manufacturers' margins to be set outside the federal 
order system. According to the officials, when manufacturing costs 
increase, manufacturers tend to decrease their margins; they then 
increase their margins when costs go back down. The AMS officials also 
stated that to the extent the effects of price volatility are reduced 
by eliminating fixed manufacturing allowances, raw milk production 
would increase, holding average milk prices constant.

Combine Class III and IV: 

A second option discussed by some of the academic and industry sources 
we contacted would be to combine Class III and IV into a single 
manufacturing class.[Footnote 166] While an objective of USDA's FMMO 
reforms, including developing separate manufacturing classes on which 
to base fluid milk prices, was to avoid situations in which the price 
of milk used in manufactured products rises above the price of milk 
used in fluid products; as we noted earlier, this change has muted 
market price signals and has reduced incentives to move milk to its 
highest-valued use. However, an academic source indicated that a 
potential challenge in combining Class III and IV is identifying an 
appropriate formula that considers the products in an expanded class. 
In addition, AMS officials cited this issue noting that one barrier 
would be finding a way to price the lowest-valued use, nonfat dry milk, 
so that manufacturers of this product would be able to afford to pay 
the minimum class price to farmers.

A number of industry and academic sources said that combining Class III 
and IV into a single manufacturing class would allow milk to move to 
its highest-valued use. With a separate Class IV, processors of butter 
and nonfat dry milk can pay less for their raw milk supplies under 
certain market conditions, which can stimulate additional allocation of 
raw milk into Class IV products. Under such conditions, by reducing 
these market distortions, combining Class III and IV might help to 
increase the economic efficiency of the classified pricing 
system.[Footnote 167] It could also help to limit the decline in market 
prices caused by overproduction of nonfat dry milk and thus reduce the 
federal costs of CCC purchases of this commodity. Over the long term, 
limiting overproduction incentives will help all farmers by maintaining 
higher average farm prices. However, these benefits could be limited by 
constraints on the extent to which raw milk is free to move between 
different uses. Some USDA officials have indicated that manufacturing 
capacity for different products varies by region and that manufacturing 
plants are often specialized. In addition, fixed supply agreements 
within the dairy industry may not allow manufacturers significant 
freedom to shift raw milk between uses in response to price signals in 
the short term.

Combining Class III and IV could have mixed impacts by region on farm 
income because with a combined manufactured product price, high prices 
for one particular use of milk would offset low prices for other uses 
in creating a weighted average price. Utilization rates for the 
different manufacturing uses vary among orders, and farmers whose 
average blend prices might be higher based on utilization of their raw 
milk for a higher-valued use under a separate class price scenario 
could experience lower average returns under a combined class price 
scenario if the price of their higher-valued use were weighted down by 
the inclusion of the lower-valued use. Conversely, farmers whose 
average blend prices might be lower based on utilization of their raw 
milk for a lower-valued use under a separate class price scenario could 
experience higher average returns under a combined class price 
scenario. For example, in regions with higher Class IV utilization, the 
loss of a separate Class IV could result in lower average farm income 
during periods when Class IV prices would otherwise be higher than 
Class III prices. In regions with higher Class III utilization, 
however, the loss of a separate Class IV could result in higher average 
farm income during periods when Class III prices would otherwise be 
lower than Class IV prices.

Change Class I Mover: 

If Class III and IV prices are kept separate, a third option to modify 
classified pricing would be to use a weighted average of Class III and 
IV prices as the mover for Class I prices. This option would tie fluid 
milk prices more closely to market related manufacturing prices, 
particularly when prices of Class III products are depressed relative 
to Class IV products. One academic study that modeled the price 
volatility impacts of using a weighted average of Class III and IV 
prices to set Class I prices reported that using the weighted average, 
rather than the "higher of" the advanced Class III or IV skim milk 
values, slightly decreases the volatility of farm prices, largely 
through a more substantial decrease in the volatility of the Class I 
price.[Footnote 168] As a result of this reduced volatility, the study 
estimated that the average Class I price would decline by roughly $0.40 
per hundredweight, causing an average farm price decline of $0.09 per 
hundredweight. The study found that there would be essentially no 
change in the volatility of other class prices or product prices.

These effects are likely to vary by region. As the Class I price is 
expected to decrease more than the average farm price, the effects of 
this option could be more significant in regions with high Class I 
utilization of raw milk. The reduction in farm prices could cause a 
marginal downward supply adjustment over the long term, the effects of 
which would also be stronger in high Class I utilization areas. The 
effects of reduced prices on farm income could be partially offset by 
increased MILC payments as long that program remains in existence. 
Increased MILC payments would raise federal costs, particularly during 
periods of low prices. However, this option could also help USDA 
minimize the costs of the price support program by making it less 
controversial to adjust the tilt between butter and nonfat dry milk 
purchase prices because these prices would no longer exert as great an 
influence on the Class I price.

AMS officials cautioned, however, that this option could increase the 
likelihood that manufactured product prices would rise above blend 
prices, leading to more frequent negative producer price differentials 
and de-pooling.[Footnote 169] The officials noted that the purpose of 
implementing the "higher of" the advanced Class III or IV skim milk 
values provision was to reduce the frequency of negative producer price 
differentials. They said that implementing an option that reduces blend 
prices makes it more likely that the value of one of the manufacturing 
class prices will rise above the blend price. The officials also 
indicated that consumers may benefit from lower prices to the extent 
that the Class I and blend price decreases are transmitted through the 
milk marketing chain. One AMS official questioned the extent to which 
this option would reduce the volatility of Class I prices, noting that 
since January 2000 the volatility of Class I prices would have been 
about the same under a weighted average mover.

Change the Administration of FMMOs: 

Another set of options to modify FMMOs involves changing their 
administration. Pooling provisions could be tightened by increasing the 
amount of milk that must be shipped to an order to qualify for that 
order's blend price or by placing restrictions on de-pooling. 
Alternatively, federal order reform could be reconsidered by splitting 
up some of the consolidated orders. Finally, USDA may be able to 
shorten the time between a hearing request and implementation of a 
final decision.

Tighten Pooling Provisions with Increased Minimum Shipment 
Requirements: 

Federal order reforms relaxed the pooling provisions of many orders, 
which negatively affected some farmers by diluting their Class I 
utilization rates and lowering their blend prices as increased amounts 
of distant milk were pooled on their orders. In response, participants 
in some orders called for hearings to tighten their pooling provisions, 
often by increasing the minimum amount of milk that must be delivered 
to processing plants participating in their pool to qualify for the 
blend price. With the end of the Western Order, the concern that some 
milk formerly pooled on that order could be pooled on the Upper Midwest 
Order led two groups of dairy cooperatives operating there to request a 
hearing to tighten the order's pooling provisions.[Footnote 170]

According to some AMS officials, restricting the pooling of raw milk 
through increased shipping requirements would not have a significant 
national impact. However, they said there could be mixed regional 
effects on farm income and production. Farmers in areas seeking to pool 
milk to other orders would generally see a negative impact on their 
farm incomes because they would incur greater transportation costs 
trying to share in the value of another order's pool and would, 
therefore, pool less milk in other orders. However, farmers in the 
receiving order could see an increase in their farm income because with 
less milk pooled from outside the order, their pool would retain more 
of its value and they would receive higher blend prices. In each case, 
there could be localized production effects depending upon whether 
farmers experience an increase or a decrease in their farm income. The 
AMS officials stated that tightening pooling provisions would have 
minimal effects on price volatility because the tighter provisions 
would not change overall supply and demand conditions. However, the 
officials also indicated that the economic efficiency of the FMMO 
system would increase to the extent that reducing the amount of milk 
pooled on distant orders would reduce the amount of money spent on 
transporting milk. Because impacts on national production levels are 
likely to be limited, impacts on federal costs would be minimal.

Tighten Pooling Provisions with Restrictions on De-Pooling: 

A second option for tightening federal order pooling provisions is to 
place additional restrictions on those who choose to de-pool. As noted 
earlier, price volatility leading to negative producer price 
differentials and de-pooling can negatively affect those who remain in 
a federal order pool because the overall value of the pool is 
reduced.[Footnote 171] Some orders restrict de-pooling by preventing 
milk handlers who choose to de-pool from re-pooling for a specific 
period of time.[Footnote 172] One such restriction recently proposed by 
cooperatives in the Upper Midwest Order would limit a processor's 
pooled milk in any month to a specified percentage of that processor's 
pooled milk in the previous month. Under that restriction, if a 
processor partially de-pooled in one month, it could only partially re-
pool in the subsequent month. If it fully de-pooled, it would have to 
wait a month before it could re-pool.

Restricting de-pooling would have mixed effects on farm income. Because 
de-pooling allows some processors to pay farmers higher prices, some 
farmers would be harmed if de-pooling were restricted. Conversely, 
those farmers who are harmed by de-pooling could benefit if more of the 
pool value were retained during periods of volatile prices. While 
nonuniform farm prices do not help to achieve orderly marketing, 
restricting de-pooling could make this problem worse if it encourages 
some processors to leave the order system permanently. In that case, 
the reserve supply of milk for fluid production would shrink, and 
orders would have to increase minimum shipping requirements for 
remaining pooled processors and dairy cooperatives. If restricted de-
pooling actually caused fewer processors to be associated with the 
federal order system, volatility in fluid milk prices could increase 
because with less milk available in reserve to supply the Class I 
market, seasonal or episodic fluctuations in milk supply and demand 
could have greater price impacts. However, an AMS official indicated 
that in general processors benefit over the long term from being 
pooled, and so restrictions on de-pooling would not necessarily 
decrease the supply of milk available for fluid milk products. If the 
supply of milk available for fluid milk products did not decrease, then 
the volatility of fluid milk prices would not increase. The effects of 
restricted de-pooling on other policy considerations, such as federal 
costs or consumer prices, are unclear.

Split Up Consolidated Federal Orders: 

A third option to revise the administration of FMMOs is to split up 
some of the consolidated orders where the combination of orders with 
different utilization rates of the different classes of milk has 
created problems. Many industry, academic, and government sources 
stated that federal order consolidation has had some significant 
regional effects, including the demise of the Western Order. One source 
stated that because of order consolidation, some orders have become so 
large that they include milk that would not normally be in the milkshed 
for particular marketing areas. This increases the potential that some 
farmers' blend prices will decrease with lower utilization rates of raw 
milk in Class I products. To address this problem, USDA is currently 
considering a proposal to split up the Southeast Order and create a 
"Mississippi Valley" Order.[Footnote 173]

Splitting up certain orders could have mixed effects on farm income. In 
cases in which experts have cited problems with federal order 
consolidation, the problems developed because two previously existing 
orders that had largely different Class I utilization rates were 
combined. With the additional milk pooled under the consolidated order, 
farmers that had been in the order with the higher Class I utilization 
rate saw a decrease in their blend price. However, farmers that had 
been in the order with the lower Class I utilization rate experienced 
an increase in their blend price. Therefore, splitting up the 
consolidated orders in these instances would affect farmers differently 
depending on the Class I utilization rates of the new orders. AMS 
officials indicated that splitting up orders would affect the 
distribution of farm income but would not affect overall production and 
therefore would have minimal impacts on federal costs. They also noted 
that splitting up orders could increase the movement of milk because 
having smaller orders makes farm prices more closely reflect local 
supply and demand conditions. Therefore, to the extent that smaller 
orders would increase the blend prices in some areas, this option could 
create incentives to transport more milk to those areas.

Accelerate USDA's Hearing Process: 

Some experts suggested that USDA's federal order hearing system is too 
slow to effectively respond to problems and changing market conditions. 
The American Farm Bureau study reported that it can take 2 or more 
years from the time USDA receives a request for a hearing or direction 
from the Congress before USDA implements the rules of a final decision. 
The study noted that within this long time frame, either the industry 
may have struggled under faulty rules or, by the time final rules are 
effective, industry changes may have occurred rendering the final rule 
obsolete. For example, a couple of industry sources stated that the 
dairy industry is changing rapidly, with a number of new products 
coming onto the market. They indicated that USDA would have difficulty 
regulating these products because it takes too long to get a decision 
on the class under which they would be priced.

USDA faces a number of challenges in shortening the time between 
receiving a hearing request and implementing the rules of a final 
decision, while still ensuring the promulgation of economically sound 
regulation.

* The USDA hearing process is set forth by law.[Footnote 174] Before 
issuing or amending marketing orders, the Secretary of Agriculture must 
conduct a formal on-the-record rulemaking proceeding. USDA must notify 
the public and provide an opportunity for a public hearing and 
comments. Before an order regulation or amendment to a milk marketing 
order can become effective, it must meet certain requirements including 
that it be approved by at least two-thirds of the affected dairy 
farmers in the order, or dairy farmers who produce at least two-thirds 
of the milk produced in that order.

* If individual parties do not agree with the USDA decision, they can 
seek review of that decision in federal court. For example, after the 
2000 FMMO reforms, several industry groups received an injunction that 
prevented USDA from implementing new pricing rules that would have 
established separate Class III and IV butterfat prices. In response, 
USDA issued a revised decision, but these new rules were not 
implemented until April 2003.

* Making informed decisions about changes in complex federal dairy 
policy can be time-consuming. For example, such decisions require 
thorough analysis and possibly modeling. In addition, AMS officials 
indicated that hearing participants are not always ready on time, and 
keeping a stricter schedule could result in an incomplete hearing 
record. Furthermore, they stated that it is difficult to compile the 
hearing transcripts quickly and accurately. However, they noted that 
USDA has recently begun evaluating its transcript contracts using an 
approach that considers timeliness and accuracy.

* The politicized nature of dairy policy makes it difficult to agree on 
proposed changes to FMMOs. Because FMMO provisions affect cooperatives 
and processors in different ways, these entities may not always agree 
on a proposed change. Moreover, given regional differences in 
production and utilization, farmers in different regions may not agree 
on changes in federal dairy policy.

AMS officials said that delays are also caused by the lack of available 
judges and attorneys who deal with milk pricing issues. The officials 
said that increasing the speed of the decision-making process is likely 
to increase federal costs because more of these resources would be 
required. USDA officials indicated that they do not believe the hearing 
process inhibits the ability of FMMOs to respond to changing market 
conditions or the marketing of new dairy products.

Eliminate FMMOs or Classified Pricing: 

Rather than trying to reform the FMMO system, some dairy experts have 
considered the possibility of eliminating FMMOs and thus the classified 
pricing system.[Footnote 175] To the extent that manufactured product 
prices stay above the level of the price support program, market forces 
would set prices for all uses of milk. In a 1988 report on 
FMMOs,[Footnote 176] we found that the production and marketing 
conditions used to justify federally guaranteed milk prices under 
marketing orders no longer existed because most milk being produced is 
now Grade A and is eligible to serve the fluid milk market during 
periods of supply and demand imbalance.[Footnote 177] Also, our study 
noted that improvements in refrigeration and the transportation system 
have made it less expensive to rely on milk supplies from other 
markets. Further, we reported that the differences in Class I 
differentials--which were, in part, intended to represent the costs of 
producing and transporting milk from areas with a surplus to areas with 
a deficit--actually bear little relationship to differences in either 
production or transportation costs for milk, thereby providing 
incentives for overproduction in certain regions. A 2002 University of 
Wisconsin study argued that this overproduction has hurt farmers in 
areas with low Class I utilization through an overall reduction in the 
price of milk used for manufacturing purposes.[Footnote 178]

Academic and USDA studies have generally concluded that without the 
classified prices established by FMMOs, fluid milk processors would 
likely pay lower average prices to farmers, which would decrease farm 
income in high fluid milk utilization areas, especially in the short 
term. Estimates of impacts on farm prices varied among studies. For 
example, the American Farm Bureau study estimated that average farm 
prices for raw milk would fall by about $0.50 per hundredweight during 
the first couple of years following federal order elimination.[Footnote 
179] Another study, published by USDA, estimated that eliminating the 
federal order system would decrease Class I prices an average of $0.95 
per hundredweight over the period from 2002 through 2007.[Footnote 180] 
Further, the 2002 University of Wisconsin study estimated that farm 
prices would decrease around $0.05 to $0.10 per hundredweight. AMS 
officials indicated that farmers would likely reduce production to the 
extent they receive lower average farm prices.

The effects of FMMO elimination could be different based on farm size. 
Some of the academic and industry sources we contacted noted that 
farmers are at a disadvantage in terms of market power within the dairy 
industry. Without the pooling of milk proceeds and the payment of 
uniform blend prices, larger farms would have increasing incentives to 
establish contracts directly with processors, and processors would 
increase their efforts to procure milk directly from larger farms 
closer to their own plants. Smaller and more distant farms could be 
more likely to be bypassed. Also, to the extent that dairy cooperatives 
are unable to cover the costs of balancing and other services they 
provide, processors may be able to deflect the costs of these 
operations back to farmers.

Studies also indicated that the magnitude of these effects could vary 
by region. Without classified pricing, the prices of raw milk used in 
fluid milk products are likely to fall, while the prices of raw milk 
used in manufactured products are likely to rise. As a result, farmers 
in regions with higher utilization of raw milk for fluid purposes, such 
as the Northeast, would be worse off without classified pricing, while 
farmers in regions with high utilization of raw milk for manufacturing 
purposes, such as the Upper Midwest, could be better off without 
classified pricing. For example, the American Farm Bureau study 
reported that states with less than 20 percent fluid utilization of raw 
milk would have higher average farm prices with the elimination of 
federal orders, while those states with fluid utilization of raw milk 
in excess of 35 percent have higher farm prices with the federal order 
system in place.

In the short term, to the extent that lower farm prices paid for raw 
milk used in fluid products are passed on to consumers, fluid milk 
consumption could marginally increase. The American Farm Bureau study 
estimated a 2.5 percent increase in fluid milk demand, while the USDA 
study estimated a 2 percent increase. On the other hand, the University 
of Wisconsin study reported that the combination of less milk 
production and more fluid milk consumption would reduce the amount of 
raw milk available for manufactured products and increase manufactured 
product prices accordingly.[Footnote 181] To the extent that 
manufactured product prices increase, consumers may buy less of these 
products.

Over the long term, increased prices for milk used in manufactured 
products could limit reductions in both farm income and production 
resulting from elimination of FMMOs and classified pricing. In fact, 
the American Farm Bureau study found that once a supply adjustment 
occurs, average milk prices would return to levels similar to those 
prior to FMMO elimination. However, to the extent that farmers in areas 
with high manufacturing use experience higher prices for their milk, 
the incentive to produce more milk could limit potential increases in 
manufacturing product prices. In the end, some decline in production 
could be expected over the long term because the overproduction 
incentive resulting from the classified pricing system would be 
removed.

Eliminating FMMOs and classified pricing could also affect other 
federal dairy policies and, therefore, affect federal costs. If MILC 
payments were still based on the relationship between what fluid milk 
processors pay to acquire milk in Boston and a target price of $16.94, 
MILC payments would likely increase in size and frequency.[Footnote 
182] At the same time, elimination of FMMOs could decrease federal 
costs related to the price support program because an increase in 
manufactured dairy product prices resulting from eliminating classified 
pricing could reduce the need for dairy commodity purchases by the CCC. 
However, it is unclear whether this effect would be large enough to 
offset additional payments under the MILC program.

Some AMS officials also indicated that farmers could experience 
increased price volatility without FMMOs. In the absence of minimum 
class prices, greater price volatility could result, in part, from 
seasonal production variation or short-term factors, such as holidays 
or weather events. Further, while some sources questioned the extent to 
which a state regulatory system, such as California's, could continue 
to exist in the absence of the federal classified pricing system, 
others indicated that state regulation of milk could increase if the 
federal system were eliminated. A couple of industry sources that we 
contacted indicated that an increase in the number of states that 
regulate milk could make it more difficult for them to do business and 
would be a less efficient system of regulation.

On the other hand, eliminating FMMOs and classified pricing could also 
provide greater incentives for product innovation. Without classified 
pricing, the market would price products more openly based on supply 
and demand and would increase the incentives for processors to develop 
alternative dairy products. To the extent that alternative products 
generate new demand for milk, this innovation could benefit farmers. 
For example, a recent study by researchers at Cornell University on the 
assignment of new products under a classified pricing system found 
significant difficulties.[Footnote 183] The study reported that the 
assignment of a new product to a higher-priced class increases farm 
income in the short run; however, the incentive to increase production 
provided by the use of raw milk in this higher-priced class and reduced 
demand for raw milk stemming from these higher prices can offset farm 
income gains in the long run. Furthermore, the study found that whether 
the new product detracts from sales of existing fluid milk products 
could also affect whether assignment to a higher-priced class increases 
net revenues to farmers. One USDA representative stated that a number 
of new products, such as low-carbohydrate milk beverages, have recently 
entered the market. In some cases, according to the representative, 
these products are intended to compete with Class I products but are 
formulated to avoid regulation as Class I products. Processors seek to 
avoid having these products regulated as Class I products because they 
would then be required to pay more for raw milk. Conversely, farmers 
want these products classified as Class I products so that their raw 
milk used in these items will be priced at the higher level.

Some sources suggested that classified pricing could be eliminated 
without eliminating FMMOs altogether. In this case, FMMOs might 
continue to perform functions such as pooling revenue, auditing, 
verifying weights and milk components, and collecting statistical 
information. A few dairy experts indicated that these particular 
aspects of the FMMO system benefit the dairy industry. While some of 
these functions might be picked up by the private sector if FMMOs were 
eliminated, they would come at a cost to dairy farmers.

Retaining FMMOs while eliminating classified pricing would probably 
lessen the impacts of deregulating raw milk prices but would be 
unlikely to change the direction of most effects or who benefits. For 
example, while farm income would still fall without classified pricing, 
continuing to pool revenues through FMMOs, if possible, could help 
cooperatives negotiate over-order premiums because pooling could help 
cooperatives maintain their market power relative to processors. Thus, 
farm income might fall by less than it would if FMMOs were eliminated 
entirely. Moreover, by continuing to pool revenues, retaining FMMOs 
could limit increases in price volatility resulting from the 
elimination of classified pricing. In addition, the orders would 
continue to aim to ensure equitable treatment for producers and 
processors. Maintaining orders is not likely to change the fact that 
farmers in regions with high fluid milk utilization would experience 
greater reductions in farm income from eliminating classified pricing 
than farmers in regions with high manufacturing utilization. Production 
would still adjust downward in response to lower milk prices, and 
retail fluid milk prices would also decrease to the extent that lower 
prices for raw milk used in fluid milk products are passed on to the 
consumer. However, to the extent that cooperatives are able to maintain 
higher over-order premiums by retaining FMMOs, these production and 
consumer price effects might be less than they would be if orders were 
eliminated entirely. Effects on federal costs would still be mixed.

Change the Dairy Price Support Program: 

Dairy experts have raised several concerns about the price support 
program in recent years, including that the support level is too low to 
adequately support farmers; that the program provides incentives to 
overproduce milk and certain commodities purchased by the CCC; that 
USDA has not managed the program to maintain the established support 
price during periods of low market prices; that there are additional 
costs of selling dairy products to the government, which diminish the 
effectiveness of the support price; and that the program stifles 
innovation in the industry. Accordingly, a number of options have been 
discussed to modify the price support program, including raising the 
overall level of the support price (and thus the related commodity 
purchase prices), making administrative changes such as allowing the 
CCC to purchase a wider range of dairy products, and eliminating the 
program altogether.[Footnote 184] Figure 37 shows the effects of 
various options to change the dairy price support program under low-and 
high-price scenarios over the short and long terms.

Figure 37: Potential Effects of Options to Change the Price Support 
Program on Various Policy Considerations: 

[See PDF for image] 

Note: The figure does not indicate the degree of increase or decrease 
for each policy consideration as it relates to a policy option. In 
addition, as discussed in this appendix, limitations affecting some 
policy options could affect the degree of an option's potential impact 
on a policy consideration.

[End of figure] 

Raise the Level of the Support Price: 

One option for modifying the dairy price support program is to raise 
the support price and the related commodity purchase prices. Many dairy 
experts indicated that the support price has fallen below the costs of 
production for most farmers and, therefore, is not providing an 
effective safety net during periods of low prices. Additionally, 
sources cited the reduction in the support price as a factor in 
increasingly volatile milk prices. For example, one academician we 
contacted stated that recent volatility in milk prices has resulted 
from the virtual elimination of the price support system as an 
effective price floor during periods of low milk prices. The price 
support program also worked to reduce price volatility during periods 
of high milk prices by releasing CCC stocks of purchased dairy 
commodities when market prices reached 110 percent of the support 
price.[Footnote 185] However, without purchasing sufficient quantities 
of manufactured dairy products, the program does not perform this 
balancing function.

According to an economist with USDA's Farm Service Agency (FSA), 
raising the support price would increase farm income and, thus, raw 
milk production. The economist indicated that this option, by raising 
the floor for milk prices, would also reduce price volatility; however, 
increased purchases of dairy products would mean higher federal costs 
for the price support program. Similarly, the American Farm Bureau 
study found that while raising the support price would reduce price 
volatility, it could create a situation in which the CCC purchases 
surplus dairy products in most years. The FSA economist noted that 
these federal costs might be offset, at least in part, by a reduction 
in payments under the MILC program. The economist also said that 
consumer costs would likely be higher, on average, because increasing 
the support price would limit the fall of prices for manufactured 
products.

The FSA economist also noted that increasing the support price would 
decrease the economic efficiency of federal dairy policies, 
particularly to the extent that a higher support price stimulates 
increased production. Under this scenario, increased production would 
represent an allocative inefficiency because resources would go into 
producing milk that is not needed to supply the market. Some sources 
cited examples of how high support prices under the program led to 
misallocation of resources into surplus milk production. For example, 
from 1977 to 1981, the support price for Grade A milk rose from $8.26 
to $13.10 per hundredweight, and annual government expenditures on 
dairy price supports increased from a few hundred million dollars to 
over $2 billion.

Change the Administration of the Price Support Program: 

A number of options have been proposed or discussed to change the 
administration of the dairy price support program. These options 
include allowing the CCC to purchase a wider range of products, 
adjusting commodity purchase prices based on market conditions, and 
setting commodity purchase prices to reflect cost differences between 
selling to the CCC and selling in the marketplace.

Allow the CCC to Purchase a Wider Range of Products: 

One potential modification to the administration of the price support 
program would be to allow the CCC to purchase a wider range of products 
than butter, cheese, and nonfat dry milk. Some dairy experts and 
studies indicated that by focusing on the purchase of a few specific 
commodities, the price support program distorts the market by providing 
incentives to overproduce these commodities, while at the same time 
dampening incentives for innovation in the dairy industry. 
Manufacturers that develop innovative products incur more risk because 
they will not be able to sell their products to the government if they 
cannot obtain a market price high enough to cover their costs. One 
cooperative representative said that while nonfat dry milk contains 
protein and calcium--both valuable components that could be used in 
other products, such as protein bars--manufacturers continue to produce 
nonfat dry milk in excess quantities because that is what the 
government is buying. A number of other sources, including industry 
representatives, academicians, and a report by the International Trade 
Commission, noted that by purchasing nonfat dry milk, the price support 
program may be impeding development of a domestic milk protein 
concentrate industry by creating disincentives to shift raw milk 
supplies to innovative products.

USDA officials cautioned that in order for a product to function well 
as a price support product, it must (1) represent a major use of milk; 
(2) have enough extra capacity to absorb a substantial amount of milk; 
(3) be storable for long periods; and (4) have an active, liquid 
wholesale market. Given these conditions, it is questionable whether 
some alternative products, such as protein bars, would be effective as 
price support products. Furthermore, the officials argued that 
requiring the price support program to incur the risk of product 
innovation through this approach would alter the fundamental purpose of 
the program--supporting farm prices.

If the CCC were to purchase a wider range of products, manufacturers 
would have greater incentives to use milk in alternative ways because 
the price support program would decrease the risks of trying to produce 
and market a greater number of products. Consumers could benefit as 
innovative products gained easier access to the market, causing 
consumer prices to fall. However, one FSA economist stated that this 
option would greatly increase the complexity of the price support 
program, potentially increase federal costs, and require new 
legislation. Moreover, he noted that this change would require close 
coordination between trade policies and the price support program. For 
example, without tariff-rate quotas on some products such as milk 
protein concentrates, the CCC could end up supporting additional 
imports if the purchase prices were set too high. The economist stated 
that this option could reduce production of nonfat dry milk but would 
be less likely to affect price volatility.

Adjust Commodity Purchase Prices Based on Market Conditions: 

A second potential modification would be to adjust--or tilt--commodity 
purchase prices based on market conditions. Some dairy experts, as well 
as academic studies, reported that because USDA does not tilt CCC 
purchase prices frequently enough to maintain a balance between butter 
and nonfat dry milk purchase prices that is based on current economic 
conditions, the price support program has distorted the market with 
unclear price signals and induced surplus production of certain goods 
(notably nonfat dry milk). Therefore, some experts indicated that 
tilting prices based on established criteria would be better. For 
example, one dairy processor recommended changing the balance of butter 
and nonfat dry milk purchase prices automatically if the ratio of CCC