Audit: Montana milk regulations do not reflect market trends, could hurt dairy farmers

How Montana regulates milk production in its already declining dairy industry is outdated and does not reflect the current demand for milk, which may be costing dairy producers money, a new legislative audit found.

“The disparity between the current quota system and recent production decreases the value of owning quota and negatively affects producers,” the report found. Basically, Montana milk farmers “own” a certain amount of pounds of milk they can produce each day.

Montana uses a quota system to regulate how much milk each producer in the state may produce; however, the amount of milk being produced is outpacing demand. The situation forces producers to sell their milk out-of-state at a lower price, the audit found. And when that milk is sold at the lower out-of-state price, it drives down how much producers get paid.

“The Board of Milk Control’s quota system is outdated and ineffective for maintaining Montana’s milk supply,” the report said. “If producers keep producing in excess of state demand, due to high quota balances, and surplus becomes a larger percentage of the uniform price calculations, there could be a negative impact on the entire industry as producers may not receive funds to continue operating their farms.”

Read more: https://dailymontanan.com/2021/10/18/audit-montana-milk-regulations-do-not-reflect-market-trends-could-hurt-dairy-farmers/