A new report from the Food and Agricultural Policy Research Institute at the University of Missouri (FAPRI-MU) has analyzed the impact of adopting the current California fluid milk standards throughout the U.S.
The study was done at the request of the four co-chairmen of the Congressional Dairy Farmer Caucus – Congressman Joe Courtney of Connecticut (D), Congressman Timothy Walz of Minnesota (DFL), Congressman Devin Nunes (R-CA), and Congressman Peter Welch (D-VT). The purpose was to update previous studies done when there were high levels of nonfat dry milk in storage, compared to now when there are virtually none.
While the study concluded that adopted the California standards would result in higher milk prices, FAPRI noted that the actual impact of the policy will depend on how is it implemented. “Analysis
of imposing California fluid milk standards across the rest of the U.S. is dependent on some key variables,” the report says. “Two examples of these variables are how costs of fluid milk fortification will be shared and how consumers will accept a higher solids fluid product.”
The basic conclusion reached by the study is: “Iimposing California fluid standards increases producer milk prices and consumer fluid milk prices. These effects become less over time as the industry adjusts to the changing standards. Fortification allowances could work to minimize these effects depending on how they would be implemented. The increase in producer milk prices would reduce CCC dairy outlays but the effect is small.”