Consolidation of Federal milk orders was mandated by the 1996 Farm Bill, which restricts the number of milk orders to no fewer than 10, and no more than 14. Consolidation is required by April 4, 1999. The Bill also authorized the Secretary to fundamentally revisit all issues related to milk marketing orders. A milk order is a regulation voluntarily initiated and approved by a majority of producers in an area, which places requirements on the first buyers or handlers of milk from dairy farmers. 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.