{"id":208632,"date":"2025-04-27T11:25:19","date_gmt":"2025-04-27T11:25:19","guid":{"rendered":"https:\/\/peraltafinancing.com\/agriculture\/americas-dairies-are-disappearing-milk-price-rules-are-a-reason-why\/"},"modified":"2025-04-27T11:25:19","modified_gmt":"2025-04-27T11:25:19","slug":"americas-dairies-are-disappearing-milk-price-rules-are-a-reason-why","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=208632","title":{"rendered":"America\u2019s dairies are disappearing — milk-price rules are a reason\u00a0why"},"content":{"rendered":"


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Milton Orr looked across the rolling hills in northeast Tennessee. \u201cI remember when we had over 1,000 dairy farms in this county. Now we have less than 40,\u201d Orr, an agriculture adviser for Greene County, Tennessee, told me with a tinge of sadness.<\/p>\n

That was six years ago. Today, only 14 dairy farms remain in Greene County, and there are only 125 dairy farms in all of Tennessee. Across the country, the dairy industry is seeing the same trend: In 1970, over 648,000 U.S. dairy farms milked cattle<\/a>. By 2022, only 24,470 dairy farms<\/a> were in operation.<\/p>\n

While the number of dairy farms has fallen, the average herd size \u2014 the number of cows per farm \u2014 has been rising. Today, more than 60 percent<\/a>\u00a0of all milk production occurs on farms with more than 2,500 cows.<\/p>\n

\"A\"A
Dairy farm numbers have fallen over the past few decades, but larger farms have kept the overall number of cows fairly steady.<\/span> USDA<\/a><\/span><\/figcaption><\/figure>\n

This massive consolidation in dairy farming has an impact on rural communities. It also makes it more difficult for consumers to know where their food comes from and how it\u2019s produced.<\/p>\n

As a dairy specialist<\/a> at the University of Tennessee, I\u2019m constantly asked: Why are dairies going out of business? Well, like our friends\u2019 Facebook relationship status, it\u2019s complicated.<\/p>\n

The problem with pricing<\/h2>\n

The biggest complication is how dairy farmers are paid for the products they produce.<\/p>\n

In 1937, the Federal Milk Marketing Orders, or FMMO, were established under the Agricultural Marketing Agreement Act<\/a>. The purpose of these orders was to set a monthly, uniform minimum price for milk based on its end use and to ensure that farmers were paid accurately and in a timely manner.<\/p>\n

Farmers were paid based on how the milk they harvested was used<\/a>, and that\u2019s still how it works today.<\/p>\n

Does it become bottled milk? That\u2019s Class 1 price<\/a>. Yogurt? Class 2 price<\/a>. Cheddar cheese? Class 3 price<\/a>. Butter or powdered dry milk? Class 4<\/a>. Traditionally, Class 1 receives the highest price.<\/p>\n

\"Dairy\"Dairy
Image by Boehringer Ingelheim<\/figcaption><\/figure>\n

There are 11 FMMOs that divide up the country. The Florida, Southeast and Appalachian FMMOs focus heavily on Class 1, or bottled, milk. The other FMMOs, such as Upper Midwest and Pacific Northwest, have more manufactured products such as cheese and butter.<\/p>\n

For the past several decades, farmers have generally received the minimum price. Improvements in milk quality, milk production, transportation, refrigeration and processing all led to greater quantities of milk, greater shelf life and greater access to products across the U.S. Growing supply reduced competition among processing plants and reduced overall prices.<\/p>\n

Along with these improvements in production came increased costs of production<\/a>, such as cattle feed, farm labor, veterinary care, fuel and equipment costs.<\/p>\n