Milk Marketing Orders:

Options for Change

RCED-88-9: Published: Mar 21, 1988. Publicly Released: Mar 21, 1988.


Office of Public Affairs
(202) 512-4800

GAO reviewed several aspects of federal milk-pricing policies to determine how: (1) the milk marketing order program affects the U.S. dairy surplus problem; (2) to change the program to reduce incentives for milk production; and (3) such changes would affect the surplus and the program's ability to meet dairy policy goals.

GAO found that: (1) because dairy market conditions changed, the milk marketing order pricing policies no longer applied; (2) the federal milk marketing system contributed to a milk surplus and benefited producers in some regions of the country at the expense of others; and (3) recent legislation provided that increases in production that resulted in annual federal dairy purchases of over 5 billion pounds would trigger a downward adjustment in the support price. GAO also found that: (1) the two basic strategies for changing milk marketing orders were controlling production and lessening government influence on milk prices; (2) the production control system would limit the quantity of milk that producers, singly and in total, could market at a given price, but could increase consumer prices, create windfalls for current producers, bar entry for new producers, and impact production in the long run; (3) the options for reducing government influence would include establishing more basing points and eliminating grade-A and distance differentials, allocations, compensatory payments, and order-pricing provisions, while retaining supervision; and (4) eliminating pricing provisions would lessen the likelihood that the support price supply-demand adjuster would trigger price reductions in the future.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Matter for Congressional Consideration

    Matter: Congress may wish to consider establishing the goal of decreasing the federal role in milk pricing; working with the Department of Agriculture (USDA) to develop and adopt legislation necessary to accomplish that goal; and directing the Secretary of Agriculture to: (1) monitor the conditions in the industry that result from changes to pricing policies; and (2) act, if necessary, to help the industry adjust.

    Status: Closed - Implemented

    Comments: USDA has issued proposed rule changes to certain pricing aspects of the marketing orders. Other pricing policy changes are still under evaluation by USDA.

    Aug 7, 2014

    Jul 29, 2014

    Apr 30, 2014

    Mar 26, 2014

    Mar 5, 2014

    Oct 17, 2013

    Sep 4, 2013

    Aug 30, 2013

    Aug 29, 2013

    Jul 29, 2013

    Looking for more? Browse all our products here