For example, annual producer deliveries in 1989 ranged from 78 million pounds in the Texas Panhandle order to 13.6 billion pounds in the Chicago Regional order. Class I utilization in the Central Illinois order during 1989 was 58 percent compared to 21 percent in the adjacent Chicago Regional order. These sorts of data for a recent year are illustrated for all orders in Table 2. Proponents of a less ad hoc approach to merger are asking two basic questions. Those supporting compulsory consolidation argue that the current order configuration is inefficient'that overlapping packaged milk distribution areas make order administration needlessly-awkward.
Handlers often complain of being required to meet multiple regulatory requirements.
Although the logic of a merger may seem compelling in such cases, some parties may be able to benefit in such situations by arbitrating across markets. That is, in some cases, money can be made by just moving milk between markets. Large differences in blend prices between orders can lead to inefficient transportation of milk, with distant producers pooling unneeded milk in the higher priced market. If mergers do not occur even when conditions would seem to warrant them, some have suggested that criteria could be specified to automatically trigger a merger. Some criteria that might be used include the number of regulated handlers, volume of producer deliveries, or percentage of handler or producer overlap.