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To file a complaint, write the Secretary of Agriculture, U.S. Department of Agriculture, Washington, DC 20260, or call (202) 720-7327 (voice) or (202) 720-1127 (TDD). USDA is an equal employment opportunity employer. Landmarks in the U.S. Dairy industry. By MarkR. Weimar and Don P. Blayney, Commodity Eco- nomics Division, Economic Research Service, U.S. Department of Agriculture. Agriculture Information Bulletin No, 694

Abstract

Studying history is useful for understanding many facets of today's dairy industry—including its structure, performance, and relationship to the rest of the U.S. agricultural complex. The land- marks in this history of the U.S. dairy industry have been defined in three categories: 1) those related to production and handling on the farm, 2) key events in the processing, manufactur- ing, and distribution (marketing) of milk and dairy products, and 3) public dairy policy events. The industry's past development shapes ongoing dairy industry issues today.

Keywords: chronology, dairy, milk production, milk processing, manufacturing, and distribu- tion, public policy

Acl^nowledgments: The authors thank Maryanna Smith and Dennis Roth for much of the basic groundwork. Their publication Chronological Landmarks in American Agriculture was a valuable starting point for us. Alden Manchester also contributed valuable insights, suggestions, and source material. Thanks also go to Carol Morgan for editorial assistance.

1301 New York Avenue, N.W. Washington, DC 20005-4788 March 1994

111 Contents

Page

Introduction 1

Onfarm Milk Production and Handling 2

Processing, Manufacturing, and IXstribution 6

Public Policy 12

Endnote 18

References 19

IV Landmarks in the U.S. Dairy Industry Mark R. Weimar and Don P. Blayney

Introduction

Agricultural development in the United States has been and Roth, 1990), and 1871 (Eckles, Combs, and Macy, amply studied by historians and economists, but most 1936). Which of the four is "right"? Probably all of them. often in a general context. The development of particu- In times when information did not move at the speed it lar agricultural commodity industries has been studied does today, factory production could have been in a more fragmented way—analysts focus on either a taking place with few people even knowing about it. very specific product or commodity, or a particular time- frame is detailed. Beginning with chronological studies Events in the history of the U.S. dairy industry can be of agriculture in general and augmenting them with in- categorized in at least three major areas: those important dustry-specific material, we can compose a chronology to onfarm milk production and handling; those related to of the dairy industry in the United States. the processing, manufacturing, and distribution (market- ing) sector; and public dairy policy events. Other events Milk production and the dairy business in the United that do not readily fit any of the three categories are States have an interesting and varied history. The appeal likely to occur. Placing an event in a particular category of a chronology is clear: Tracking various developments does not preclude the possibility of spillover effects in an- over time helps explain the current state of the dairy in- other. Policy events most likely will have effects dustry. Those developments have shaped the present, throughout the industry. Not only have we identified and will shape the future of the industry and issues re- significant events influencing the dairy industry, but we lated to it. A problem in identifying chronological events have also endeavored to add why they are important. is important to note before continuing: It can be difficult The intent was not to produce an exhaustive history of to pin down an event to one discrete date. As historians the U.S. dairy industry. It was, and is, to stimulate dis- and other interested parties look back over recorded his- cussion of the industry's development and show how tory, it is likely that different points in time might be de- that development shapes ongoing dairy industry issues. fined as the time a particular event took place. When information or news did not travel instantaneously or as There have always been, and will always be, a few indi- widely as today, there may well have been events taking vidual producers, processors, or manufacturers who place no one knew about. readily adopt new technologies or adapt to economic or other changes. These were the pioneers. It is not until The transformation of butter production from an onfarm widespread adoption or adaptation occurs that the indus- activity to a factory activity is an example. The funda- try shows change or that change becomes noticed. Identi- mental question is "When did this transformation be- fying discrete events that have affected the dairy gin?" There are at least four periods or points in time industry gives an appreciation for the sometimes long pe- that have been offered as the answer: the 1840's (Man- riods between the two. chester, 1983), 1856 (Smith and Roth, 1990), 1861 (Smith Onfarm Milk Production and Handling

Columbus is reported to have brought various farm animals, including calves, and plants to the New World in 1493, Our focus on the events related to onfarm milk production begins with the first successful European settlement in what was to become the United States, the Jamestown, Virginia, colony. In fact, the oldest European settlement was built in St. Augustine, Florida, in 1565, The Spanish had probably brought cows to their settlements in Mexico somewhat earlier.

1611 Cows arrive for the Jamestown 1810 "Associated" or cooperative 1857 Alfalfa acclimated to Minnesota. Colony. (Ensminger) dairying had its start in Goshen, (Edwards and Russell) Connecticut with the manufacturing and marketing 1624 Cows reach Plymouth Colony. of butter. (Samuels and 1860 Two German scientists (Ensminger) Abrahamsen) developed the Weende system for analyzing feeds. This 1760- Period of pioneering livestock system, known in the United 1817 The first Jersey cattle were 95 breeding work by Robert States as "proximate analysis," is reportedly imported into the Bakewell in England laid the still the most widely used United States. (Graves and foundation for genetic method for evaluating Fohrman) improvements in dairy cattle feedstuffs. (McCullough, 1991) breeds of those following his work. (Eckles, Anthony, and 1822 Earliest reported import of 1861 Mechanical refrigeration Palmer) Ayrshire cattle into the United technology was improved. States, in the Northeast. (Graves These developments would and Fohrman) 1780 Research into artificial eventually lead to utilization of insemination began in Italy. bulk tanks for onfarm milk (Ensminger; Träger) 1830- First importations of Guernsey storage. (Ensminger) 31 cattle into the United States. (Graves and Fohrman) 1795 Reports of imports of 1861 First imports of large-sized black and white Holstein-Friesians that were not mixed with local cows. (Beal cattle into the United States 1847 Near present-day Salt Lake City, and Bakken) was mentioned by historians, Utah, the Mormons begin using (Graves and Fohnnan) techniques that are the foundation of modern irrigated 1865 Colvin patented first agriculture in the Western 1801 - The first ice refrigerator (icebox) vacuum-type machine. United States. (Thorne) 2 was invented and patented (in (Ensminger) 1802) by Thomas Moore^ a Maryland farmer. (Anderson; 1850* Alfalfa grown on the West 1868 Formation of the American Träger) 56 Coast. (Hendry) Jersey Cattle Club. (Graves and Fohrman)

1869 Brown Swiss first imported into the United States. (Graves and Fohrman)

1870 DNA is discovered but not yet suspected as the genetic agent for conveying hereditary traits. (Träger) 1875 First wide publicity of silos 1893- First production of certified constructed on farms in 94 milk. (Bartiett; Beal and Bakken) Maryland and Michigan. (Eckles, Anthony, and Palmer) 1898 With the introduction in 1898 of Feeds and Feeding, a publication 1875 Ayrshire Breeders' Association of the Wisconsin Agricultural organized in the United States. Experiment Station, producers (Graves and Fohrman) had a book that helped them improve the nutrition of their herds. They couid provide the 1877 Foundation of the American levels of protein, fiber, and Guernsey Cattle Ciub. (Graves energy to sustain cows at and Fohrman) maximum production. (Morrison) 1879 A formalized study of 1890 The Babcock test was veterinary medicine (education) developed. The test allowed a 1903 Alexander Gillies, an Australian, began at Iowa State College. quick, easy, and accurate test for produced the first prototype (Stange) milkfat content of milk, and of what eventually became the thus, provided for milk to be modern milking machine. priced on a basis other than 1880 Brown Swiss Breeders' (Ensminger) "white water" weight. Other Association was established in tests were developed but none the United States. (Graves and were as widely used as the 1905 The first dairy cow testing Fohrman) original Babcock test. (Eckles, association was organized in Combs, and Macy) Newaygo County, Michigan. 1882 The bacteria causing dairy cattle (Eckles, Anthony, and Palmer) tuberculosis was isolated. 1891 The first dairy school in (Dorset) America was established at 1906 First known rural electric line University of Wisconsin. was constructed in Hood River, 1883 Publication of The jersey Bulletin {Wsconsin) Oregon. (Cavert) began. (Schlebecker and Hopkins) 1892 The first successful gasoline 1908 First cooperative bull tractor was built by John association, in Michigan. 1884 Veterinary education began at Fruehlich. The tractor led to (Winkjer) the University of Pennsylvania. changes in the use of labor, (HistoTy of the School... ) which changed the organization 1910 The onfarm electric power and operations of all farms, market was discussed at a including those with significant meeting of the National Electric 1885 A major dairy industry dairy cow herds. (Gray) publication. Hoard's Dairyman, Light Association. was founded. (Schlebecker) (Schermerhorn) 1892 Mehring milking machine powered by foot or hand pedals 1885 Pulsator (used in milking 1920 There were 55,000 milking began to gain acceptance. machines) was patented by machines on 5 million farms (Ensminger) Modestus Cushman. with dairy cows. Few farms had (Ensminger) reñ:igeration. (USDA, BAE, 1950) 1892- Certified milk originated by Dr. 93 Henry L. Coit in Essex County, 1920- Universal method of hauling 1885 Consolidation of Holstein (1871) New Jersey. Certification meant 30'S milk to market in the 1920's and and Friesian (1879) breed that produced on the 1930's was in 40-quart cans. registries at the farm met some established set of (Manchester, 1983) Holstein-Friesian Association of sanitary standards. (Bartiett; America. (Graves and Fohrman) Beal and Bakken) 1927 The American Dairy Science 1930'S Late in the 1930's, bulk tank 1944 685,000 milking machines on 4.5 Association instituted the Dairy handling of milk was million farms with dairy cows. Herd Improvement Associations introduced in California. Later, (USDA, BAE, 1950) (formerly the cow-testing this would replace handling associations) and established a milk in 40-quart cans. 1946 336 AI associations with 73,000 Dairy Records Committee to (Manchester, 1983) Ensminger members in operation. The review and revise rules for milk dates first bulk tanks to 1938. members owned about 900 bulls production testing on a regular and 579,500 cows. (Phillips) basis. (Ensminger; King) Possibly the ñrst reported research on total mixed rations 1940'S By the late 1940's, a new, 1928 Penicillin was discovered in at Purina Milling Company so-called *'fast milking London. (Stodoia) farms. Urea partially replaces procedure" had cut milking time protein in cattle rations. Mixing in half. (USDA, BAE, 1950) rations with other protein 1929 The Great Depression began. sources, such as soybean meal, (Bean) was also tested and ultimately 1950 Large proportion of commercial developed. (McCullough, 1991; dairy farms had refrigeration on 1930 58 percent of all farms had cars, Wisconsin) farms. (USDA, BAE, 1950) 34 percent had telephones, and 13 percent had electricity. 1937 Russian scientists d emonstrate a 1951 First embryo transplant in cattle. (Smith and Roth) milk production response in (Wisconsin) lactating dairy cows to injections 1930 Over 70 percent of farms had of a crude pituitary gland 1950*S Linear programming combined milk cows but only 14 percent of extract originally named with the Feeds and Feeding farms with dairy cows were somatotropin. (Bauman) rations helped dairy producers considered commercial dairy minimize the costs of their farms. Connmercial dairy farms 1938 The first dairy cattle rations. (Katzman) were those that earned 40 artificial-breeding (AI) percent of their receipts from cooperative was organized. Increased use of antibiotics and dairying. (Manchester, 1983) (Shaffer) sulfa drugs sped recovery of cows suffering from mastitis 1935 Sulfanomides (sulfa drugs) were and other diseases, and thus 1939 Improvements in storage of bull discovered. (Jones, L.) increased milk production per semen laid the cornerstone for cow. (Petersen) artificial dairy breeding. 1936 Artificial insemination of dairy (Wisconsin) cattle in the United States was 1952 British scientists reported begun. (Ensminger) successful freezing of certain 1939 AI gaining adherents. There animal semen, which retained a were 6 associations with 646 high degree of fertility after 1936 14 percent of the dairy farms in members owning 33 bulls and thawing. (Ensminger) the Northeast and 29 percent in about 7,500 cows. (Ensminger; the Lake States used milking Phillips) machines —with the remaining 1953 Computer programming cows milked by hand. About 13 developed for Dairy Herd 1940 33 percent of all farms had percent of the dairy farms in the Improvement work. (Wisconsin) electricity; 58 percent had cars Northeast were cooling milk and 25 percent had telephones. with electricity; fewer than 1 (Smith and Roth) 1957 The herringbone milking parlor percent were cooling milk with was brought to the United electricity in the Lake States. States from New Zealand, (Manchester, 1983) 1943 Production of penicillin (Hienton and Schaenzer) increased dramatically through use of lactose-corn steep liquor 1936 The Rural Electrification Over time, milk stanchions were medium. (Raper) Administration (REA) was replaced by walk-through and approved. (Ellis) herringbone milking parlors. (McCroskey and others) Milking machines were 1978 The first recombinant DNA demonstration farms and is changed from bucket milkers to product, human insulin, was making its way onto other dump station to pipeline. produced. The U.S. Food and commercial farms, (Houghton) (McCroskey and others) Drug Administration (FDA) approved its use in 1982. With deregulation of the (Träger) 1960'S Cubing or wafering machines railroads, the unit-train concept revolutionized hay handling. became economically viable and (Butler) 1980'S With the introduction of the was used to ship feedgrains to personal computer (PC), the West Coast. Bulk buying in farmers could mix much more this manner increased milk 1960'S Cooperative Extension Service sophisticated rations that production in the West and or feed companies provided minimized cost directly on the helped to fuel productivity easy access to least-cost rations farm, without help from feed growth in California. (Dooley) from mainframe computers. stores and Extension. (Ensminger) (Ensminger) 1981 A way was discovered to mature and fertilize eggs of 1964 By 1964, 92 percent of producers Milking frequency begins to cattle in vitro. (Wisconsin) in lov^a, Illinois, Missouri, and change from 2-a-day (2X) to 3X Wisconsin v^ere using bulk (even 4X has been tried), tanks rather than cans. 1982 First herd trials using although slowly. The increases (McCroskey and others) recombinant bovine in milk production from somatotropin (rbST) were more-than-twice-daily milking conducted at Cornell. Other 1968 Official acceptance of electronic have been known since the tests followed in several testing for milkfat content. 1930's and 1940" s. Economics different locations. (Bauman) (Wisconsin) will play a crucial role in such conversions. (Bortón and others; Petersen; Smith, 1984 The FDA ruled that milk and 1972 Development of somatic cell Knoblauch, and Putnam). meat from cows given count procedure for use in cattle supplemental doses of rbST mastitis programs. (Wisconsin) were safe for human Computerized feeding systems consumption. The decision was allowed for introduction of total 1970'S In the 1970's, only 0.4 hour of based on data provided by mixed rations, which were labor was used to produce a sponsoring companies and other designed to provide more hundredweight of milk and 1.5 investigators. Safety of the milk precise mixes of feed directly to hours of labor were required to and meat is only one of the the cow. There can be economic produce a ton of hay, compared safety criteria the products must benefits to adopting such with 3.4 hours and 9.5 hours, meet prior to approval for systems. (Wildhaber, Willett, respectively, in the 1930's. commercial sale. (Sechan) and Hillers) (Manchester, 1983) 1984 Onf arm ultraf iltration A new system for evaluating 1976 Development of technique to technology was first used on a feeds, developed by Van Soest transfer embryos in cattle commercial dairy operation. at Cornell, gains usage. This nonsurgically. (Wisconsin) (Hoard's Dairyman, October 10, system provides a more 1985) disaggregated measure of feed 1977 60 percent of dairy cows/heifers contents than the Weende were bred by artificial system—information useful as 1993 The FDA approves Monsanto's insemination. Used to some nutritional requirements of the rbST product for commercial degree in 90 percent of U.S. dairy cow become more fully sale. However, a 90-day herds. (Ensminger) known. (McCullough, 1986) moratorium on sales went into effect, beginning on the day of the approval, November 5,1993. 1978 Only 13 percent of f anns had Development of robotic milking (Schwartz) dairy cows, and 50 percent of technology ("automated milking those were commercial farms. systems") in Europe by Dutch (Manchester, 1983) firms begun in 1985. Some of the technology has been used on Processing, Manufacturing, and Distribution

The processing, manufacturing, and marketing of milk and dairy products did not become commerciaUißd until the middle and late 1800's. The separation of raw milk production and milk and distribution activities led to the rise of intermediaries between dairy farmers and consumers. It also contributed to the organimtion of farmer cooperatives whose major goal was to give milk producers more bargaining power over milk prices.

1819 The tin can was introduced to 1851 The ice industry began 1857 Pasteur announced discovery America. While not so when a Baltimore milk dealer, that heating postpones milk important for the dairy Jacob Fussell, began utilizing souring, [Wsconsin) industry, the development and surplus sweet cream to produce introduction of new packaging on a large scale. 1857 Refrigerated railroad cars were and gained a boost. (Tumbow, Tracy, and Raffetto) (National Canners Association) developed, making possible broader distribution of dairy 1855 Ehy milk wa s first commercially products. iWisconsÍ7Í) 1834 Jacob Perkins developed the manufactured in England by principle of mechanical Grimwade. (Eckles, Combs, and refrigeration. (Beal and Bakken) Macy) 1857 A second condensery was built by Gail Borden at Burrville, Connecticut. It failed, but led to 1841 Fuchs discovered that milk 1856 The first butter factory was the establishment of the New contained microorganisms, a established by W.R. Woodhull York Co. in finding emphasizing the near Campbell Hall, New York. Wassaic, New York, the importance of bacteriology to (Guthrie) forerunner of Borden's the industry. (Petersen) Condensed Milk Co. (Eckles, Combs, and Macy) 1856 A patent for condensing milk 1842 The first shipment of milk by was issued to Gail Borden and a rail into New York City proved short-lived factory was built in 1861 New York State Cheesemakers successful and was continued. Wolcottville, Connecticut. Association organized. Later it Milk had been moving by rail (Eckles, Combs, and Macy) became the American into the Boston market for some Dairymen's Association. years before. (Larson; (Brunger) 1856 Louis Pasteur began Manchester, 1983) experiments with . (Manchester, 1861 A creamery (or butter factory) 1851 Butter was moved successfully 1983) was built by Alanson Slaughter by rail in refrigerator cars from in Orange County, New York. northern New York to Boston. was also produced at the (Smith and Roth) facility. (Eckles, Combs, and Macy) 1851 The first cooperative cheese factory was organized in Oneida 1860- Substantial product County, New York. (Beal and 70 modifications were apparent in Bakken; Bartlett; Manchester, the dairy industry as cheese 1983) moved toward factory production and sweetened 1851 A patent for mechanical condensed milk products were refrigeration was issued to John improved. (Williams and others) Gorrie. Refrigeration technology began to improve during the 1860's and onward. (Dossat; Ensminger) 1868 William Davis received a patent thus, provided for milk to be for a refrigerator car widely priced on a basis other than used by railroads in the 1870's. "white water" weight. Other (Reynolds) tests were developed but none were as widely used as the original Babcock test. (Eckles, 1871 A creamery exclusively for Combs, and Macy) butter manufacture was built by Stewart in Manchester, Iowa. (Eckies, Combs, and Macy) 1890 The ice cream sundae was invented. ( Wisconsin)

1871 A major board of trade for the dairy industry was established 1894 The Five States Milk Producers' in Little Falls, New York. Association was organized to (Wisconsin) speak for producers but it disappeared after 5 years. (Dyson) 1872 A patent was issued to Percy in 1883 The first attempt was made to New York City for the process manufacture a dry milk product of atomizing fluids into heated () in the United 1895 Commercial milk pasteurizing air. (EckleS/ Combs, and Macy) States. (Eckles, Combs, and machines were introduced. Macy) (Manchester, 1983)

1872 The Elgin (Illinois) Board of Trade was organized to find a 1884 The Milk Producers' Union was 1897 The cold-curing procedure for better method of marketing organized to protect the cheese was described. dairy products. (Ashmen) interests of the producer, but it (Wisconsin) failed for lack of cohesiveness among members. (Dyson) 1872 Trading in butter began on the 1898 Chicago Butter and Egg Board New York Mercantile Exchange. organized. A major function of (USD A, AMS, SB-633) 1884 was patented the Board was grading butter by John Meyerberg. (Eckles, and eggs. (Irv^n) Combs, and Macy) 1878 The continuous, centrifugal cream separator was invented, 1900- Substantial product simultaneously by de Laval, and 1884 The returnable quart milk 10 modifications were apparent: Winstrup and Nielsen. It was was introduced. (Manchester, milk pasteurization, the brought to the United States in 1983) production of ice cream for 1882. (Edwards; Petersen) wholesale, and evaporated milk. (Williams and others) 1885 The first factory to produce 1879 The first Plymouth dairy board evaporated milk was operating was established in Plymouth, in Highland, Illinois. (Eckles, 1901 Stauf, a German, was issued a Wisconsin. (Miller) Combs, and Macy) patent for an improved drying process for milk, which was bought by the Merrill-Soule 1879 There is some difference of 1886 Automatic capping and filling Company of Syracuse, New opinion as to the originator of equipment for quart milk York. This patent expired in the ice cream soda, but credit was patented. (Manchester, 1918. (Eckles, Combs, and Macy) has been given to Fred Sanders 1983) of Detroit, Michigan. (Tumbow, 1902 Milk wagon drivers' unions, the Tracy, and Raffetto) 1886 Introduction of classified pricing oldest in the industry, first plan for milk in Boston market. organized in San Francisco and 1880- Substantial growth in creamery (Manchester, 1983) Chicago markets. (Bartlett) 90 (factory) production of butter. (Williams and others) 1890 The Babcock test was developed. The test allowed a quick, easy, and accurate test for milkfat content of milk, and 1903 Discovery of galactase, an large scale, particularly in the 1918- Packaged butter became more enzyme thought to play a major meatpacking industry. 27 widely available. (Williams and role in the ripening of cheese, by Meatpacking companies were others) H.L. Russell. (Eckles, Combs, major suppliers of butter and and Macy) cheese for years. (Mixon and 1918 The quantity of butter produced Johnson; NichoUs) in creameries in the United 1904 The first ice cream cone was States exceeded, for the first supposedly introduced at the St. 1916 National Milk Producers time, the quantity produced on Louis World's Fair. Also the Fédération (NMPF) was formed. farms. (NichoUs, Feb. 1939) year the first commercially The term Cooperative was produced cones were made. added to the name in 1923 1919 Chicago Mercantile Exchange (Turnbow, Tracy, and Raffetto) (NCMPF). (McKay) organized as a nonprofit organization. (Kolb) 1905 The first milk-drying plant was 1916 The Chicago Milk Producers built in Fayetteville, New York. Association was the first group 1919 Homogenized milk was sold (Petersen) to organize a boycott of milk successfully in Torrington, dealers. (Guth) Connecticut. (Wisconsin) 1906 The single-service (smaller, disposable, usually a single 1916 Milk strike in the New York 1920- Substantial product develop- serving size) City market was organized by 30 ments related to sweet cream was patented. (Manchester, the Dairymen's League against butter. There was a move by 1983) Borden's and Sheffield , major butter producers to the major milk purchasers, improve butter quality during processors, and distributors in 1907 Incorporation of the Dairymen's the period. Sweet cream butter the market. (Dillon; Dyson) League in New Jersey as a was promoted as a "better" business stock company. Little product. (Williams and others; activity until the years during 1917 The Elgin Board of Trade was NichoUs, Feb. 1939) World War I. Became Dairy- discontinued under orders from men's League Cooperative the U.S. Food Administration. It 1921- Processed cheese became a more Association, Inc., in 1919. (Dyson) was argued that the board was 26 Viddely known and available essentially a Chicago trading product. (NichoUs, June 1939) organization. A few traders 1909 The rules of the Plymouth dairy from Chicago would travel to board were changed so that it Elgin for a short Saturday 1921 The Minnesota Cooperative became a statewide entity, the session held in the form of a call Creameries Association, the Pljmnouth Central Cheese board. (NichoUs, Feb. 1939) predecessor of Land C^ Lakes, Board, the forerunner of the was established. (NichoUs, Feb. Wisconsin Cheese Exchange, 1939) which in turn became the National Cheese Exchange. (Miller)

1911 Automatic rotary bottle and capper perfected. (.Wisconsin)

1914 Tank trucks first used for transporting milk. (Wisconsin)

1915 National Dairy Council founded. (Wisconsin)

1915 Construction of refrigerated warehouses was begun on a

8 1922 Insulated milk tank trucks became a more common sight on U.S. roadways. (Lough)

1923 The National Dairy Products Corporation was organized. It was merged with Kraft in 1930 and became dominant in cheese production (through patent control), merger activities, and marketing. (Manchester, 1983)

1924- Production point grading of 30 butter became common. (Williams and others)

1930- High-temperature, short-time, collectively with dealers over 1924 Milk in nine large U.S. cities was 50 continuous flow pasteurization prices. A major opposition 98 percent pasteurized, but replaced vat pasteurization. group was the Dairymen's small municipalities had no (Manchester, 1983; USD A, BAE, League Cooperative regulations on pasteurization. 1950) Association. (Dyson) (Manchester, 1983)

1930 The continuous ice cream 1938 An antitrust suit was brought by 1925 Stoj>-and-go horse-driven milk freezer was introduced. (USDA, the Department of Justice wagons were beginning to be BAE, 1950) against milk dealers, the milk replaced by step-and-drive milk wagon drivers' union, the Pure trucks. (Wisconsin) Milk Association, and others in 1932 The Wisconsin Cooperative the Chicago market. It was Milk Pool was incorporated. 1925 Nonfat dry milk manufacturing perhaps the most significant (Hoglund) using spray processing was legal controversy in the industry developed to a greater extent. until that time. The U.S. (Williams and others) 1932 Milk with vitamin D added was Supreme Court defined the made commercially available to points of law involved but no Detroit consumers by Borden trial was ever held. In 1940, a 1926 The Pure Milk Association Company. (Wisconsin) consent decree was entered by (PMA) was chartered in Illinois the major defendants named in to serve fluid milk producers in the complaint. (USDL; Winn) the Chicago market. Prior to 1933 Fluid milk was included in army this time, seven such groups rations. (Wisconsin) came and went for various 1939 Dairy Farmers Union staged one reasons. The PMA was closely of the most successful milk 1934 The PMA strikes in the Chicago associated with actions related strikes in U.S. history, claiming market after cancellation of the to the tuberculin-testing to have cut off 50 percent of Federal milk marketing program instituted in the New York City's milk supply by agreement and license, the first Chicago market. (Winn) the third day (lasted 9 days). that had been granted in the (Dyson) United States. (Winn) 1929 Milk strike of 1929 in the Chicago market, lasting 18 days, 1940'S Construction of nonfat dry milk 1936 More than 75 percent of milk in called by the PMA. Dealers plants by the Federal cities of 25,000 or larger was refused the price demands of Government during the Second pasteurized. (Manchester, 1983) farmers represented by the World War resulted in value for group. (Winn) the nonfat skim solids in milk. 1936 The Dairy Farmers Union was The domestic casein (the major founded in Heuvelton, New milk protein) industry virtually 1929 The Great Depression began. York. From the beginning, this collapsed. Implementation of (Bean) group proposed to bargain the dairy price support program

9 by the 1949 Agricultural Act essentially guaranteed the continued lack of any significant domestic casein production. (Manchester, 1983)

1940 The American Dairy Association was formed. (Wisconsin)

1941 The Farmers Union of the New York Milkshed, a spin-off of the Dairy Farmers Union, was organized. Eventually it became the Northeast Division of the National Farmers Union from 1944 to 1951. (Dyson)

1941 The United Dairy Farmers of Michigan was organized in District 50 of the United Mine Workers of America (UMW), milk did not grow until 1981. 1950- Sliced cheese becomes a more headed by John L. Lewis. In (Wisconsin) 60 important product as cheese 1942, Lewis met with the United companies respond to changing Dairy Farmers to propose a 1948 Plastic- milk consumer wants. (Williams and plan to organize the Nation's 3 were introduced for others) million dairymen. The same commercial use. (Wisconsin) year, the Dairy Farmers Union 1952- Modified, low-fat milk products in New York formalized its 1950'S Work began on using reverse 56 were more common in the affiliation with District 50. markets. (Williams and others) UMW impacts on dairy farmers osmosis (RO) technology for were minimal. (Dyson) purifying seawater. RO development has had 1955- Substantial impacts were implications for other filtration apparent in the general 1940- Homogenized and Vitamin processes for removing water automation of manufacturing 50 D-fortified milk products gained from milk and has itself been and fluid milk processing. acceptance, as did . discussed as being applicable in (Williams and others) (Williams and others) the dairy industry. (Fleming and Hamm) Changing marketing channels 1944 A method was developed for for fluid milk led to fewer fluid making cheddar cheese from 1950 A National Conference of processors of greater size. pasteurized milk. (W/sconsin) Interstate Milk Shipments was Greater size tends to provide established to assist in economies of scale or lower cost 1945- Substantial soft frozen product establishing and interpreting per unit of product. 55 and rindless block cheese grading of milk moving across (Manchester, 1983) developments occurred. The State boundaries. This packaging of cheese for retail conference makes recommendations for changes in The development of paper sale was also increasing. containers, clean-in-place (Williams and others) the Pasteurized Milk Ordinance, the instrument by which rules systems, stackers and are enforced. (Sauber, 1991; destackers, high-temperature 1946 Vacuum pasteurization was Jones, W.) short-time pasteurization, perfected. (Wisconsin) bottle-casing equipment, , and conveyors all 1950 Milk vending machines became helped to make fluid bottiers 1948 Ultrahigh-temperature (UHT) a more important distribution larger and more efficient. pasteurization was introduced. outiet. (Wisconsin) (Manchester, 1983) National recognition of UHT

10 Over time, increased efficiency 1965- Substantial technological effects 1971 Rules of the Cheese Exchange and productivity in the fluid were apparent in butter (the modified eliminating State of milk processing sector increased continuous churn) and cheese origin requirements for cheese the derived demand for fluid (continuous processes) offered for sale or bid. Became products. (Gruebele) production, including National Cheese Exchange, the techniques to assure taste. only open cheese market in the (Williams and others) United States, operating in 1955- Substantial product develop- Green Bay, Wisconsin. (Gould) 60 ments were apparent in instant nonfat dry milk. (Williams and 1968- Midwestern chainstores were 1974 Nutrition labeling of fluid milk others) 69 using central purchasing plans, which meant fluid processors products began. (Wisconsin) had to change their operations. 1955 Flavor control equipment for (Fallert) milk is inhroduced. {Wisconsin) 1976 Establishment of the Cheese Research Instihite. (Wisconsin) 1968 Official acceptance of electronic 1960- Many small cooperatives testing for milkfat content. 1978 Development of polyurethane 70 merged into large regional milk (Wisconsin) cooperatives. AMPI, Mid-Am, foam from may provide a and Dairymen, Inc., for viable economic use for whey, example, were all organized 1969 Dairy Research, Inc., was which had been viewed as a during the period. (Knutson) formed. (Wisconsin) waste product. (Wisconsin)

1960- Substantial product 1970 By 1970, only 27 percent of milk 1979 Development of a milk development was made using was home-delivered, whereas in concentrate, using ultrafiltra- sterile milk. (Williams and 1940,70 percent of milk was tion and electrodialysis. Ultrafiltration, in particular, others) home-delivered. (Manchester, 1983) is important for whey manufacture. (Wisconsin) 1963 Development of process for making frozen concentrated 1970- Central milk purchasing dairy starter cultures. {Wisconsin) 75 programs were found to be 1979 Butter trading was discontinued important in southern food on the New York Mercantile chains. (Lough and Fallert) Exchange after 107 years. Along 1964 The was with the establishment of the introduced commercially. National Cheese Exchange, the (Wisconsin) 1971 The United Dairy Industry national scope of manufactured Association was formed. dairy product markets was (Wisconsin) recognized. (USDA, AMS, SB-633)

1983 The National Dairy Promotion and Research Board was authorized by the 1983 Dairy and Tobacco Adjustment Act. Promotion and research activities were to be paid for by a nonrefundable assessment of 15 cents per hundredweight on milk marketings. (Fallert and others)

1993 Futures tiading of nonfat dry milk and cheddar cheese began on the New York Coffee, Sugar, and Cocoa Exchange. (CSCE)

11 Public Policy

Public dairy policy in the United States is closely identified with the economic history of the industry. While Federal dairy policies have often received the most attention, there are a significant number of State policies as well Four eras of the economic history of the U.S. dairy industry have been identified (Novakovic, 1992): DSmall-scale competition (late 1700's-1880), 2)Price domination by dealers (circa 1880-1916), 3)Collective bargaining (circa 1916-1933), and 4)Public regulation (circa 1933-present),

Most of the current major public dairy policies stem from legislation enacted since 1933, but several important public policy decisions prior to 1933 have had important effects on the industry. Many of the major public policies are directed toward milk pricing, but milk quality and safety have also been major public policy targets.

Dairy policies, at least at the Federal level, have evolved over time through a process of periodic reauthorization of legislative provisions. Tracking changes in dairy policy is made doubly difficult in that administrative changes in programs may he made without legislative action. The setting of butter, cheese, and nonfat dry milk purchase prices by the ASCS, and AMS's use of hearings to bring about changes in the Federal milk marketing orders, are examples.

1840 The U.S. Census first included Act (1877) which gave fee 1881 Pure food laws were enacted in questions (totaling 37) related to simple title to 640-acre tracts of Illinois, Michigan, New York, agriculture. (Ebling) arid lands in the West, on and New Jersey. (Weber) condition that the land be reclaimed "by conducting water 1856 Massachusetts passed the first 1884 The New York Dairy on it;" the Carey Act of 1894, law in the United States Commission was established to whereby States received prohibiting the adulteration of landgrants of 1 million acres on regulate and establish standards milk. (Manchester, 1983; Bartlett) for milk in New York State. condition that they provide for (Colman) its reclamation (States usually 1862 Abraham Lincoln signed sold water rights to recover legislation creating the United reclamation costs and sold land 1886 The Oleomargarine Act, a States Department of at nominal cost, but only to Federal statute that was to be Agriculture (USDA). (Baker those who contracted to buy amended several times in the and others). water rights); the 1902 Land future, was passed. This Reclamation Act which legislation began 65 years of authorized funds from sale of regulations against margarine in 1862 The Homestead Act, designed to public lands to be used to some form. The law that was spur expansion into the West, construct storage and power was signed. It was the first of passed included definitions of dams and canal systems for both butter and margarine. several public regulations that irrigable lands in the West formalized agricultural and Other regulations of the same (settlers got the land free but resource policies in the West. type followed, partly to support had to pay for structures built Included are: the Desert Land the dairy industry and partly to on it over 10 years); and the prevent consumer fraud Pope-Jones Water Facilities Act concerning product content. of 1937, which authorized the Examples are the Filled Cheese Secretary of Agriculture to Act of 1896, which taxed provide water facilities in arid made with any fats other than and semiarid areas. (Hallberg) butterfat and the Act of 1923, prohibiting substitution of any fat or oil for milkfat in milk and cream (certain excep- tions were made for infant foods). (Manchester, 1983: McLaughlin; Mickle: Riepma)

12 1887 The Hatch Experiment Station 1920- The U.S. Public Health Service Act was approved. The Act 30*S recommended a model standard provided States with Federal milk ordinance for voluntary grants to be used for State and local adoption and agricultural experimentation. later published a code to foster (True) uniform interpretation. (Jones, W.)

1888 Office of Experiment Stations was established. (Bakerand 1922 The Capper-Volstead Act was others) approved. The Act dealt with unforeseen problems for agricultural cooperatives which 1889 The USDA was raised to had arisen with passage of the Cabinet status. (Hathaway) 1908 An ordinance was passed Sherman Antitrust Act in 18^. requiring that all milk sold as Specifically, agricultural raw milk in the Chicago market 1890 The Sherman Antitrust Act was cooperatives were granted a had to come from tuberculin- approved. The Act prohibited limited exemption from rules tested cows. (Williams and price fixing and caused which prevented them from others; Winn) problems for dairy cooperatives, bargaining for prices on behalf which were bargaining for milk of their members. (Manchester, prices on behalf of farmers. 1914 The Clayton Act was approved. 1982) (Hallberg) The Act permitted nonstock cooperatives to bargain 1927 Federal Import Milk Act passed collectively for prices on behalf 1892 Certified milk originated by Dr. limiting the importation of fluid of their members. (Hallberg) Henry L. Coit in Essex County, milk and cream. (USDHEW) New Jersey. Certification meant that raw milk produced on the 1914 The Smith-Lever Act was 1927 The Food, Drug, and Insecticide farm met some established set of passed, which formalized Administration was established sanitary standards. (Bartiett; cooperative agricultural in USDA. It was redesignated Beal and Bakken) extension work. (Hallberg) the Food and Drug Admin- istration in 1930. (USDA, Misc. 1895 A Dairy Division was created in 1917 The Lever Act was passed. Pub. 48) the Bureau of Animal Industry, Price-fixing of some USDA. (Baker and others) commodities was authorized 1928 The Boulder Canyon Project Act by the legislation. Licensing of was passed, which resulted in producers and distributors and 1897 The Tea Importation Act was the first major multipurpose prohibiting unfair trade passed. This was the first U.S. river system project in the West practices were also enacted law to establish a procedure for (Hoover Dam). Followed by under the law. Part of the actually determining the quality Columbia River Basin Project in package of wartime legislation of food products. (Grange) Washington State, units of the associated with World War I. California Water Plan, and (Surface) others. (Thorne) 1902 A Federal tax on "colored" margarine higher than on 1919 In cooperation with dairy uncolored margarine was 1929 The Great Depression began. industry representatives, the instituted. (Mickle) (Bean) first standards for grades of creamery butter and cheddar 1906 The Pure Food and Drug Act cheese were developed and 1929 The State of Utah placed an was approved. The Act promulgated by USDA. Grades excise tax on margarine to established Federal standards for other products have been discourage its consumption. By for purity of food and drugs established since, for example, 1939, half the States were taxing reaching consumers. (Hallberg) for Swiss cheese, nonfat dry the sale of margarine. (Burtis milk solids, and dry whole milk. and Waugh) (Baker)

13 1929 The Agricultural Marketing Act 1934 Marketing agreements were animal drugs, milk testing, and became law. This legislation terminated but licenses other food safety concerns. under Hoover presaged the continued in effect. (Manchester, (Crawford) massive Government programs 1983) of the Roosevelt years. 1939 Major expansion of the School (Hamilton) 1935 The Agricultural Adjustment Lunch Program was Act of 1933 was rewritten. undertaken. (Baker and others) 1930- Substantial changes to and Section 32 and an amendment to 40 greater adoption of the U.S. provide for marketing agree- 1939 A Food Stamp program was Public Health Service milk ments and orders for milk, considered and a pilot program ordinance and code were rather than licenses, were was put in place. Food stamp occurring. (Williams and others) included. Classified pricing programs were tried until 1943 and market-wide pooling were but were not to become part of specifically allowed. Section 22 The legality of the rules in many permanent agricultural related to imports of com- States governing milk markets legislation until the 1960's. modities that might undercut was challenged in several court (Baker and others) price support activities of the cases and/ in general, upheld. U.S. Government, Government California adopted a State plan purchases for food aid and 1939 The first Agricultural Marketing that is still in effect, which is not industry support were also Service was established in the linked to some key Federal included in the 1935 legislation. USDA. (Baker and others) regulations, particularly the (Hallberg) Federal milk marketing orders. Rules in several States are still in 1940 A school penny-milk program effect but have become 1935 Federal assistance for School under Section 32 of somewhat less important. Lunch Programs began. amendments to the Agricultural (USDA, April 1986) (Southworth and Klaymen) Adjustment Act was approved. (Moffett and others.) 1931 Federal tax on colored mar- 1936 The Supreme Court invalidated garine was applied to all slightly the Agricultural Adjustment 1941 The price of milk paid to yellow margarine. (Mickle) Act (Murphy) farmers was supported by purchases of manufactured dairy products. The Steagall 1933 The Agricultural Adjustment The Rural Electrification Act Amendment set parity at 85 Act, under which the (REA) was approved. (Ellis) percent for nonbasic com- Agricultural Adjustment modities for which increased Administration was established, 1937 The Agricultural Marketing production was needed to was approved. The Act Agreement Act was passed^ satisfy the war effort. Dairy authorized marketing reenacting 1935 legislation; basis was one of these products. The agreements and licenses for for Federal milk marketing support price was raised to 90 milk. The first marketing orders. (Rubel and Holt) percent of parity in 1942. agreement issued under the Act (Hallberg; Manchester, 1983) was for fluid milk in Chicago. (Manchester, 1983; Nourse) 1938 The Agricultural Adjustment Act of 1938, which was based on 1942 Every-other-day milk the "ever normal granary" required as a war conservation 1933 Pan ty, an idea based on "fair concept, was approved. One of measure. (Wisconsin) exchange" that had been the four legislative acts developed during the 1920's, commonly considered as part of was used as a general goal for 1946 The National School Lunch Act the "permanent" legislation for assistance to farmers. Later, was approved. It established agricultural price and income parity was used explicitly in grants-in-aid to promote policy, (Hallberg) setting support prices and loan nonprofit school lunch rates. (Teigen) programs. (Sandstrom) 1938 The Food, Drug, and Cosmetic Act was approved. This 1933 The Commodity Credit legislation authorizes the FDA Corporation was established. to act on food labeling, new (Hamilton)

14 1946 The Agricultiiral Research and developed in 1948. Flexibility 1954 The Special School Milk Marketing Act was approved. refers to the discretion of the Program was established under Federal Standards for grading Secretary of Agriculture to set the Agricultural Act of 1954 to and inspection were deter- the minimum support price use Commodity Credit mined. Authority for the level for milk within a band {75 Corporation (CCC) funds to Agricultural Marketing Service percent to 90 percent of parity). increase fluid milk use in to engage in transportation From 1949 to 1981, the schools. (Benson) niatters before regulatory minimum support price was agencies was broadened. raised above the minimum 75 1956 The Special Milk Program was (Banfield) percent of parity level four extended to include nonprotit times by Congress, in 1960, summer camps, orphanages, 1973,1977, and 1979, and in 1946 All foods except sugar, syrup, and other child-care institutions. other times it was raised by and rice were removed from (Smith and Roth) USD A. The current milk price price controls, (Baker and support program began. Rasmussen) Section 416 provided for the 1956 The CCC Export Credit Sales domestic disposition through program was established. (Dean) 1946 Presidential proclamation of donations of surplus products to cessation of World War II U.S. voluntary relief organ- 1957 The Treaty of Rome was signed. hostilities resulted in price izations. One of the four This treaty laid the groundwork supports ending 2 years later legislative acts commonly for today's European Economic unless they were reauthorized considered as part of the Community (EEC or EC) and its under new legislation. (Smith permanent legislation for Common Agricultural Policy and Roth) agricultural price and income (CAP). The dairy program policy. (USDA, 1967; Hallberg; provisions of the CAP were not Manchester, 1983) 1947 The General Agreement on finalized until 1968. Since Tariffs and Trade was November 1,1993, the group negotiated and signed, 1950 The Federal tax on colored has been called the European becoming effective in 1948. margarine was repealed with Union (EU). (Blayney and (Johnson) enactment of the Federal Fallert) Margarine Act. (Manchester, 1983; Riepma) 1948 Obligations under the Steagall 1959 The Food for Peace program Amendment were terminated, was inaugurated and legislation which would result in lowering 1953 Section 22 Authority to restrict authorizing a Food Stamp the parity level of support for dairy product imports was first program was passed. (Barlow) dairy. However, the applied, by Presidential Agricultural Act of 1948 proclamation. (USDA, FAS, 1960'S Changes made in the Federal approved extending dairy price 1988) milk marketing orders that supports at 90 percent of parity transformed the regulations through 1949. (Manchester, 1983) 1954 The Agricultural Trade from a series of loosely linked Development and Assistance separate orders to an integrated 1948 The Commodity Credit Act of 1954 (Public Law 480) system. (Manchester, 1983) Corporation Charter Act was revised Section 416 to encourage passed. One of the four export of price-supported Legal actions to draw attention legislative acts commonly products to nations unable to to compensatory pricing and considered as part of the buy on the world market. One down allocation differences permanent legislation for of the four legislative acts among orders. Seen as barriers agricultural price and income commonly considered as part of to milk movements. policy. (Hallberg) the permanent legislation for agricultural price and income Movement toward a common policy. (Toma) base for minimum class prices— 1949 The Agricultural Act of 1949 the Minnesota- Wisconsin (M-W) became the foundation of many price. current farm programs. It incorf>orated the flexible price Setting Class I differentials support and the "modern" on an Eau Claire-plus trans- parity formula that had been portation base imposed

15 geographical price alignments 1963 The beginning of the Kennedy 1974 Uniform milk classifica tion plan in orders east of the Rocky Round of GATT multilateral established in seven markets. Mountains. trade negotiations that initiated Definitions of products included long-term phasing out of cheese in each classification. (39 FR Orders adopting the M-W tariffs. The Round was 8202) price as the basis for pricing completed in 1967. (Pearce) became linked to national supply-demand movements 1975 The M-W price became the basic and the price support program, 1964 A national Food Stamp program formula price (minimum Class I which supported manu- was approved. The Food Stamp and 11 price mover) in all facturing grade milk prices. Act made the program a part of Federal milk marketing orders. the permanent agricultural (USDA, AMS) Adaptation of order rules to the legislation. (Hallberg) conversion of Grade B to Grade 1977 The Food and Agriculture Act of A milk production. 1970 The Agricultural Act of 1970 1977 was passed. The Act set a suspended the obligation to minimum of 80 percent of parity Establishment of new orders, support prices of farm- for milk. It also required that many in the Upp«r Midwest, separated cream. Thus, CCC the support price be adjusted later merged in large regional could lower the purchase price semiannually to reflect changes orders. for butter and raise the price for in prices paid by farmers. These Changes in pool plant nonfat dry milk. (Miller and provisions were to be in effect requirements. Short; Fallert and others) for 2 years. (Fallert and others)

Elimination of local 1970 The National School Lunch 1979 The support price provisions of supply-demand adjusters. Program was extended to more the 1977 Food and Agriculture needy children. (Smith and Roth) Act were extended for 2 years. 1960* Minnesota-Wisconsin (M-W) (Fallert and others) 61 price series for manufacturing 1973 The Tokyo Round of the GATT grade milk developed. It is trade negotiations began. More 1981 The Agriculture and Food Act of a market pay price for countries participate and non- 1981 marked an important manufacturing grade (Grade B) tariff barriers to trade, particu- change in the dairy price milk resulting from competition larly agricultural trade, were support program. Minimum among the Grade B plants. A emphasized in the discussions. support prices were legislatively widely accepted indicator of Essentially established the U.S. set for the years 1982-85 in milk value in manufacturing quota for dairy products at the dollars per hundredweight, not uses, the M-W became the basis level it has held since. The as a percentage of parity. Only for classified pricing in the Round was completed in 1979. under special circumstances did Chicago order. (USDA, AMS) (Pearce) the parity standard of milk support pricing come into play. 1961 The Agricultural Act of 1961 The adjustment need no longer 1973 The Agriculture and Consumer authorized the Special Milk be made on a semiannual basis, Protection Act approved. The Program and extended Public as in previous legislation. Act set a minimum level of (Johnson and others) Law 480. (Hadwiger and Talbot) support at 80 percent of parity. (Fallert and others) 1962" The Federal Trade Commission 1981 - The support price was frozen a t 65 (FTC) reached final decisions on 82 $13.10 per hundredweight. 1974- Support prices adjusted (Fallert and others) complaints filed against large 77 frequentiy because of rapid fluid processors in the inflation. No support price mid-1950's related to their lasted more than 9 months. 1981 - The Omnibus Budget merger and acquisition (Fallert and others) 83 Reconciliation Act of 1982 activities. The processors were authorized a 50-cent deduction either found in violation or per hundredweight on all milk entered into consent decrees. marketed. It was first collected (Manchester, 1983; FTC) in April 1983. An additional 50-cent deduction, implemented on September 1,1983, was

16 refundable to producers who reduced marketings by a specified amount. (Fallert and others)

1983 The Dairy and Tobacco Adjustment Act of 1983 provided a diversion program for dairy producers and froze price supports. The diversion operated between January 1984 and March 1985. The Act also lowered support to $12.60 per hundredweight on December 1, 1983. The $0.50 deduction per hundredweight was continued through March 1985. The National Dairy Promotion and Research Board was authorized. Promotion and research 1985 A Dairy Export Incentive 1986 The Uruguay Round of the activities were to be paid for by Program (DEIP) was authorized General Agreement on Tariffs a nonrefundable assessment of by the Food Security Act. This and Trade (GATT) began. 15 cents per hundredweight on program was designed to assist Eliminating agricultural trade milk marketings. (Fallert and U.S. exporters of dairy products barriers was made a keystone of others) to enter foreign markets. The the talks, eventually gaining the program has been extended and status as a measure of success or 1984 The FDA ruled that milk and revised by 1990 agricultural failure of the Round. (Blayney meat from cows given legislation. (Glaser) and Fallert) supplemental doses of rbST were safe for human 1986 The Food Security Act of 1985 1988 The Agricultural Biotechnology consumption. The decision was established a whole herd buyout Research Advisory Committee based on data provided by program for dairy farmers. first met, recognizing the sponsoring companies and other Cows and heifers of farmers potential importance of investigators. Safety of the milk exiting dairying under the biotechnological issues for and meat is only one of the program were exported or agriculture in the future. safety criteria the products must slaughtered. The Act also set (USDA, Minutes of ABRAC) meet prior to approval for the support price at $11.60 per commercial sale. (Sechan) hundredweight for calendar 1989 Drought relief legislation in 1986, $11.34 for January- 1988 prohibited a support price 1985 Because purchases were September 1987, and $11.00 reduction on January 1,1989. expected to exceed trigger levels thereafter. On January 1 of The legislation also required a set under the Dairy and Tobacco 1988,1989, and 1990, the $0.50 increase in the support Adjustment Act of 1983, the support price had to be price on April 1,1989, followed support price was reduced decreased by $0.50 if projected by a $0.50 reduction in price on twice, once each on April 1 and removals exceeded 5 billion July 1,1989. (Fallert and others) July 1. (Fallert and others) pounds milk equivalent (ME) or increased $0.50 if removals were projected to be less than 2.5 1989 The USDA announced stricter 1985 The Food Security Act of 1985 billion pounds ME. (Fallert and guidelines in defining the 1985 set the Class I differentials in others) Animal Welfare Act. The new Federal milk marketing orders, guidelines affected the pro- increasing most differentials. duction of veal, an activity that The effective date was May 1, has been criticized by many 1986. This was the first time the arumal rights or animal welfare Congress had legislated pricing groups. (USDA News, Aug. 30, in the Federal orders. (Fallert 1989) and others) 17 1990'S Several States, seeing no Federal 1993 Butter and nonfat dry milk 1993 The FDA approved a recom- pricing changes^ have purchase prices were adjusted binantly produced bST product implemented regulations that in July in a way that represented for commercial sale. Only the ultimately translate into higher a shift of $0.50 in the value of product produced by Monsanto, milk prices to the producers 100 pounds of milk from milkfat one of the companies devel- within their State. Some court to skim milk. (Dairy S&O, 1993) oping such products, was cases have been filed to consider approved. However, a 90-day their legality. (Sauber, 1992) moratorium went into effect on 1993 The final decision of the USDA sales the day of the approval, on the national hearing on November 5,1993. (HHS; 1990 The support price was lowered Federal milk marketing orders Schwartz) to $10.10 per hundredweight was published- It called for effective January 1. (USDA, uniform establishment of three ASGS, 1990) classes of milk in all orders and Endnote modified pricing of recon- stituted milk. The changes were It should be obvious that milk 1990 A national hearing on Federal viewed by many as very minor. production and the dairy industry in milk market orders was held The changes became effective on the United States have undergone rather Sept-Nov. 1990. The hearing July 1. (58 FR12634) dramatic changes during the course of was held in response to an fime. The various events we have announcement by Secretary of identified are by no means all that have Agriculture Clayton Yeutter. 1993 The Omnibus Budget had some effects. It is also likely that {USDA News, March 2% 1990) Reconciliation Act of 1993 some of the events we have chosen contained several features would not be considered landmarks in directly related to the dairy 1990 The Food, Agriculture, the minds of many. It is, however, a list price support program. Most Conservation and Trade Act that offers those persons interested in of the provisions of the 1990 (FACTA) established a schedule the U.S. dairy industry some insights legislation were extended to of support price changes related into the many forces that have played 1996. Butter and nonfat dry to surpluses but contained a roles in its development and its current milk prices were defined, floor for the dairy support price structure, performance, and conduct. budget reconciliation assess- at $10.10 per hundredweight. ment rates were specified, and The Act also contained issues related to a ban on the provisions for a study of milk sale of recombinant bST were inventory management presented. (Dairy S&O, 1993) programs, the replacement of the M-W price series (which had been previously announced in 1993 In a vote disputed by many 1990), "make allowances," using farmers, the National Dairy total solids for milk accounting Promotion and Research Board purposes, and implementing remained in existence, with results of the national milk funding from a 15 cent per order hearing. (Pollack and hundredweight assessment on Lynch) all milk marketings. The modified bloc-voting pro- cedures used by USDA came 1992 The North American Free Trade under fire. The concerns raised Agreement (NAFTA) was about voting procedures in this signed by the U.S., Canadian, may affect how voting is and Mexican heads of state. handled in other matters (USDA, OE) requiring producer referen- dums. (Dairy Profit Weekly, Oct. 25,1993)

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23 U.S. Department of Agriculture Economic Research Service 1301 New York Avenue, NW. Washington, DC 20005-4788