(Washington, D.C.) – Citizens Against Government Waste (CAGW) today released a special report that exposes the folly of federal government intervention in the nation’s dairy industry. Milk Marketing Order Reform: Watered Down or Real? is an in-depth look at the 60-year-old federal dairy program, and how it hinders an evolving industry, artificially inflates the price of dairy products, and costs consumers and taxpayers billions of dollars per year.

“When the milk marketing order program began in 1937, the objective was to ensure that each region of the country had an ample supply of fresh milk,” said CAGW President Thomas A. Schatz.  “But a lot has changed in 60 years.  Advancements in production, refrigeration, transportation and marketing have rendered the program obsolete. 

“The industry is stuck in the past and unable to adjust to changes in the marketplace.  The government establishes differing values for milk based on whether it’s used as a beverage or to make ice cream, butter or cheese.  So instead of producing what consumers want, the industry produces whatever will bring more profit from the government program.  It makes no sense,” Schatz added.

The report is also critical of the marketing order reform options currently being considered by the U.S. Department of Agriculture (USDA).  The 1996 Farm Bill required USDA to implement a reduction of the federal milk marketing orders from 31 to between 10 and 14 by April, 1999.  While this is being done, none of USDA’s options would eliminate minimum pricing, milk classing, or pricing differentials, all policies which increase the price of milk to consumers by at least $1.5 billion annually.

“The milk marketing order program is nothing more than an unfair milk tax on consumers.”  Schatz stated. “Congress missed a golden opportunity to reform the program when it passed the buck to USDA in the 1996 Farm Bill.  There is no reason for the government to establish a minimum price for milk.  It does not do so for cars, computers, steaks, apples, or soft drinks, and those industries continue to thrive.”

CAGW is a nonpartisan, nonprofit 600,000-member organization dedicated to eliminating waste, inefficiency, mismanagement, and abuse in the federal government.