Milk Market Regulation
and the Evolution of the Regional Market
The
formal, interstate legislative process that led to establishment of the Compact
was
spurred
by a national crisis in dairy farm prices in 1987.
In the fall of 1987, national dairy farm
floor prices as established by federal regulation dipped and stayed well below
costs of
production. Throughout New England and New York, concerns were raised
with regard to
the impact of depressed prices on rural economies and the regions' milk
supplies, and state
government policy makers were called upon to respond in the public interest.
In response,
these policy makers first looked to the traditional avenue of individual state
regulation
to correct imperfections in the federal pricing structure