This
report covers the period of the operation of the compact price regulation from
July, 1997 – December 2000. For
the period, the compact price regulation worked to
incrementally increase and to stabilize the Federal Milk Market Order #1 Class I
price (federal price), which establishes the underlying regulated minimum
procurement price for beverage milk in the New England market paid by processors
for their raw milk supply.
The
price regulation’s over-order obligation is set as the monthly difference
between the federally established Class 1 price and $16.94 per hundredweight
($1.46 per gallon), when the federal price is below $16.94. When the federal
price exceeds $16.94, there is no over-order obligation.
When applicable, the obligation is collected monthly from all fluid
processors with Class I sales in the regulated area, or the territorial region
of
the six New England states.
Producers receive payment, also monthly, from the pooled
proceeds of the
over-obligation collected from the processors. In contrast to the over-order
obligation which is imposed only on Class I milk sales in the region, farmers received
payment based on their total milk production, or that utilized for all purposes in the
New England market.