Editorial Comment Publisher/Editor



Another Federal Order Problem Area: Shipping Requirements

Dick Groves
Cheese Reporter

Jly 1, 2022

In what might be a modern-day record, three federal milk marketing orders are currently reviewing requests to reduce, or continue at a reduced rate, the shipping percentages in their orders. This provides yet another illustration of the need to reform federal orders.

By “modern-day” record, we’re talking about federal orders here in the 21st century, when there have been either 10 or 11 federal orders at any given time, as opposed to, say, 1990, when there were 42 orders.

The three orders we’re talking about here are the Upper Midwest, the Northeast and the Pacific Northwest. It’s worth keeping in mind that two of these orders, the Northeast and the Upper Midwest, also happened to be, at least in 2021, the largest and third-largest orders, respectively, in terms of receipts of producer milk.

Taking a look at these shipping requirement proceedings in chronological order, the Northeast order in early May sought comments on a request from Queensboro Farm Products, a pool handler, to lower the shipping percentage for the months of September, October, and November from 20 percent to 10 percent until further notice.

In late May, the Pacific Northwest order invited comments on continuing the reduction of the percentage of producer milk that a cooperative association must ship to pool distribution plants in order to qualify its manufacturing plant(s) for pool status from 20 percent to 15 percent, effective July 1, 2022, until further notice.

And then in mid-June (as we reported last week), the Upper Midwest order is inviting comments, until July 5, on a request to reduce shipping requirements in the Upper Midwest order from 6.0 to 4.5 percent, beginning in August 2022.

There are a couple of points to keep in mind when looking over these requests to reduce shipping percentages, or continue them at a reduced rate. First, none of the requests made in recent months is new for its particular order; rather, each of these orders has previously dealt with one or more requests to reduce shipping percentages.

For example, pooling standards for the Upper Midwest order were reduced on May 1, 2019, from 7.5 percent to the current 6.0 percent, following a request from the same proponents who made the current request: Central Milk Producers Cooperative and Upper Midwest Marketing Association. Prior to that, also following a request from CMPC and UMMA, the shipping requirements for the Upper Midwest order were reduced from 10 to 7.5 percent, effective Apr. 1, 2017.

For the Northeast order, this isn’t the first time Queensboro Farms has requested that the shipping percentage for September, October and November be lowered from 20 percent to 10 percent for pool supply plants. A year ago a similar request was approved just for 2021, and two years prior to that, a similar request was approved for 2019 and 2020.

In fact, reductions in the shipping percentages for the months of September, October and November for the Northeast order date back to 2013, although that year and the following year the reduction was just from 20 to 15 percent; and in 2015 the shipping percentage for the months of June, July and August was reduced from 10 to 5 percent before it was reduced from 20 to 15 percent for September, October and November.

The shipping percentage was also reduced from 20 to 15 percent in 2016 and 2017, and then the percentage has been cut from 20 to 10 percent every year since then.

And the shipping percentage on the Pacific Northwest order was originally reduced from 20 to 15 percent from July 1, 2019, through June 30, 2020. This revision was continued in 2021 and 2022, and it appears that that reduction will continue in the future.

From this background we can conclude that, since these aren’t the first requests to reduce shipping percentages in these orders, they also won’t be the last.

The other point to keep in mind is what pretty much every one of these requests mentions: that Class I sales continue to decline. And also, at least for the Northeast and Upper Midwest orders, the number of Class I dealers is also declining.

Declining milk sales have been well-documented over the years; for example, in our Sept. 3, 2021 issue, we reported that fluid milk sales in 2020 totaled 46.36 billion pounds, the lowest level of fluid milk sales since 1958.

That point by itself is troubling, as indicated by the regular requests for shipping percentage reductions. What’s also troubling is the ongoing decline in the number of distributing plants. For example, when they submitted separate requests in December 2016 to reduce the shipping percentages on the Upper Midwest order, both CMPC and UMMA noted that, in 2008, there were 26 distributing plants in the order but as of October 2016 that number had fallen to 17.

In February 2019, in a joint request, CMPC and UMMA noted that in 2018, there were 15 pool distributing plants, and two plants are noted as closed.
And in their recent request, they noted that there were 12 distributing plants listed for April, but two plants, NDSM Chemung (Illinois) and NDSM DePere (Wisconsin) have announced July 8, 2022 as their last day for bottling milk.

Finally, all of these proceedings mention the concept of disorderly marketing or uneconomic shipments of milk.

Continuing declines in fluid milk sales, and in the number of Class I dealers, promise the continuing possibility of disorderly marketing if shipping percentages aren’t among the many issues that are addressed in any federal order reform undertaking...


Dick Groves

Dick Groves has been publisher/editor of Cheese Reporter since 1989. He has over 45 years experience covering the dairy industry. His weekly editorial is read and referenced throughout the world.
For more information, call 608-316-3791 dgroves@cheesereporter.com

Recent Editorials written by Dick Groves.

SEC Should Go Slow On Climate-Related Disclosures Rule
June 24, 2022

June Dairy Month And $3.00 Butter
June 17, 2022

Something For (Almost) Every Cheese Lover at IDDBA
June 10, 2022

'Other' American, Italian Cheeses Gaining Importance
June 3, 2022

Other States Starting To Dominate Production
May 27, 2022

A Fond Farewell To CCC Statistics In WASDE Reports
May 20, 2022

White House Conference Won't Solve Food-Related Problems
May 13, 2022

25 Years Without The National Cheese Exchange
May 6, 2022

Pondering Another Dry Year in Western US
April 29, 2022

US Really Needs A Standalone Food Agency
April 22, 2022

Going Beyond The Nutrition Facts Requirements
April 15, 2022

Will Interest in Plant-Based 'Sustainability' Fuel Malnutrition?
April 8, 2022

It's a Great Time For Dairy Innovation
April 1, 2022

Remembering USDA's 1982 Kansas City Dairy Symposium
March 25, 2022

'Dietary Guidelines for Americans' Really Needs Fixing
March 18, 2022

Consistent Milk Production Growth: Wisconsin Stands Alone
March 11, 2022

Federal Order Make Allowances Will Always Be Outdated.
March 4, 2022

A Memorable Year For US Dairy Imports
February 25, 2022

A Memorable Year For US Dairy Exports
February 18, 2022

An Impressive Leap For US Cheese Production
February 11, 2022

Federal Order Milk Volume Isn't What It Used To Be
February 4, 2022

MIlk Pricing Definitely Needs Modernizing
January 28, 2022

French Dressing, Dairy Products, And Standards of Identity
January 21, 2022

Canada Certainly Knows How To Make Dairy Trade Interesting
January 14, 2022

Congress: Where Legislation Goes To Die
January 7, 2022




What do you think about 
Dick Groves' Comments?*

Please tell us if you are a
Dairy product manufacturer 
Dairy marketer /importer/exporter
Milk producer
Supplier to manufacturer



Cheese Reporter welcomes letters to the editor. Comments should be sent to: Dick Groves by Fax at (608) 246-8431; or e-mail your comments to
dgroves @cheesereporter.com.