Milk marketing orders
Administered by the Agricultural Marketing Service, federal milk marketing orders were first instituted in the 1930s to promote orderly marketing conditions by, among other things, applying a uniform system of classified pricing throughout the farm milk market. Federal milk marketing orders regulate handlers that sell milk or milk products within an order region, by requiring them to pay not less than an established minimum price for the Grade A milk they purchase from dairy producers, depending on how the milk is used. This classified pricing system requires handlers to pay a higher price for milk used for fluid consumption (Class I) than for milk used in manufactured dairy products such as yogurt, ice cream, cheese, butter and nonfat dry milk (Class II, Class III and Class III-A products). The FAIR Act of 1996 requires USDA to consolidate the number of federal milk marketing orders into 10 to 14 regions, down from 32, by 1999.