One of those restrictions is that handlers must pay an assigned minimum price according to how milk is utilized. Milk is priced under a classified pricing plan which divides milk into classes according to use. Dairy farmers receive a uniform price that reflects the use value to handlers who are regulated under the same order. Also, a milk order requires that all payments by handlers be pooled and the same average price is paid to individual dairy farmers or cooperative association. Milk handlers are the only persons regulated, not the actual farmers.
Handlers generally are processors who distribute fluid milk products in a designated marketing area.
Proposals and comments submitted by the public throughout the development process also were taken into account. The more market-oriented Option 1B, which is the Administration's preferred alternative, still provides minimum prices for higher valued fluid use, while relying more on the market to generate higher prices when needed to attract a sufficient supply of milk to market. . The continuing decline in the volume of Grade B milk produced in the Upper Midwest and nationally suggests that the current way in which milk is priced may no longer be a statistically reliable indicator of the value of milk used in manufactured products. Determine protein and other solids prices for milk used in Class III products from cheese and whey prices. Determine a nonfat solids price for milk used in Class IV products from nonfat dry milk product prices.