Federal Milk Marketing Orders Overview

The video explores the relationship between the mailbox price (what farmers receive) and the retail price (what consumers pay) for milk. It delves into the Federal Milk Marketing Orders, established in the 1930s, which govern milk pricing and movement. The video explains how milk is priced based on its final product class, with Class I milk having the highest price due to its perishability. It also covers the pooling of milk by geographic area and the concept of blend pricing. The Three C's—commodity, component, and class—are discussed as key factors in milk pricing. The video concludes by highlighting the market dynamics and policies that influence milk pricing, emphasizing the complexity of the dairy market.

What is the primary focus of the initial discussion on milk pricing?

• The nutritional value of milk

• The history of milk production

• The relationship between mailbox and retail prices

• The environmental impact of dairy farming

What was the original purpose of Federal Milk Marketing Orders?

• To ensure an adequate supply of milk and fair payments to farmers

• To promote international milk trade

• To reduce the cost of milk

• To increase milk production

What major change occurred in the Federal Milk Marketing Orders in 2000?

• The Orders were abolished

• New milk classes were introduced

• Milk prices were standardized

• The number of Federal Orders was reduced from 31 to 11

Which class of milk typically has the highest price due to its perishability?

• Class I or beverage milk

• Class II or cheese milk

• Class III or butter milk

• Class IV or dry milk

What is a significant challenge to the Federal Order system established in the 1930s?

• Decreased consumer demand

• Technological advances in refrigeration

• Increased milk production

• Lack of government support

What are the Three C's that influence Federal Order milk pricing?

• Commodity, Component, Class

• Cost, Consumption, Class

• Commodity, Cost, Class

• Component, Cost, Consumption

Which of the following is NOT a commodity that influences milk pricing?

• Yogurt

• Cheddar cheese

• Butter

• Dry whey

How do cooperatives influence the movement of milk?

• By regulating milk quality

• By managing milk movement across regions

• By setting retail prices

• By producing milk

What is the role of Federal rules in dairy policy?

• They determine the flavor of milk

• They underpin base pricing and regulate milk movement

• They set the nutritional standards for milk

• They promote international dairy trade

Why is a basic understanding of dairy marketing important?

• To improve milk taste

• To understand what influences a dairy farmer's income

• To increase milk production

• To reduce milk prices