CA Reforms Would Help Consumers, Farmers, Says Study

August 10, 1999

Another study from a group seeking the repeal of California's milk marketing policies finds both consumers and farmers would benefit if repeal became a reality. Repeal would mean the end of the state's mandatory mark-up law and allow imports of milk from outside California. That would bring more competition in retail pricing.

The report was prepared by Schnittker Associates and concludes that milk prices would decline while dairy revenue increased if California repealed milk marketing policies that limit competition and consumer choice.

An alliance of organizations to end state barriers to milk, Mad About Milk, commissioned the study. The reforms MAM proposes would allow milk meeting federal standards to be sold in California along with milk meeting California standards and end state policing of retail milk prices. That would lead to a reduction in retail milk prices.

Consumers would benefit from lower retail milk prices, and farmers would benefit from the increased revenue from higher per-capita consumption. "Farmers would actually make more money if consumers started drinking more milk as a result of changes in the state's milk marketing policies," said John A. and John M. Schnittker, a father and son team of agricultural economists who form the company that conducted the study. "That's because dairy farmers are paid a higher price for milk processed for drinking than for milk processed for dairy products, such as cheese or butter."