L. Issue: The Potential Impact of a Flat, Combined, Regulated Federal
Order and Compact Over-Order Price on Retail Prices for Fluid Milk
Products

    The Compact Commission sought comment on the critical issue of the
potential impact, if any, of a flat, combined, regulated Federal Order
and Compact Over-order price on retail prices for fluid milk products.
    After reviewing all of the comments and testimony submitted, the
Compact Commission concludes that the price regulation will have a
positive impact on retail prices. The Commission determines that
preventing further erosion of the milkshed through price regulation
will itself have a positive impact on retail prices, in large part
because of the avoidance of increased transportation costs. The
Commission concludes that the further benefits of price stability will
trace through the farm and wholesale markets to the end-point, retail
market, and have a further, positive impact on retail prices.
    The Commission bases its conclusion on the following analysis: