OPINION/COMMENTARY

USDA Rule Threatens Small Dairies

A rule change proposed by the USDA threatens to destroy the precious few “producer-handler” dairy farms left in the United States and leave a sour taste in the mouth of milk consumers everywhere. Under the new rule, dairies that produce more than 3 million pounds of milk per month would no longer be exempted from pricing and pooling provisions that require milk producers to sell raw milk into regional pools. The federal government sets the sale price based on demand in the Pacific Northwest, Arizona, and Nevada. The farms are then forced to buy their milk back from the pool at a higher price. The new rule would thus force smaller independent processors that control every aspect of milk production—from the grass to the glass, as they put it—to pay millions of dollars a year into the pools to subsidize other producers. Although the rule change is directed at farmers in the Pacific Northwest and Arizona-Las Vegas areas, it would set a national precedent. The ultimate outcome would be further consolidation in the industry, higher prices, and less consumer choice. The fight over the proposed regulation pits three small independent farms against the biggest players in the dairy industry....

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