Because of the importance of milk products in American diets, the dairy industry occupies a special place in the national economy. Since the mid-nineteenth century, the government has played a growing role in policing and supporting the industry, which has been largely removed from the dynamics of normal market forces. At the same time, government price supports of the industry have placed a growing burden on taxpayers that has become increasingly controversial.
Milk products have been important nutritional staples of human diets for thousands of years. As early as 9000
The early years of European settlement in North America found most colonists living in small towns or on rural farms. Small dairy farms supplied the needs of towns, and many individual families owned their own dairy cows. After the colonies became independent to form the United States, urban centers grew in size, and the new nation needed more efficient methods to increase food supplies and improve distribution of agricultural and dairy products. The American Industrial Revolution of the nineteenth century changed the social and economic fabric of the country and advanced centralized and industrialized methods of food production. As new factories and mills were built, increasing numbers of people worked in large cities. By the mid-nineteenth century, large numbers of cattle were raised specifically for dairy production. As urban demand for milk and dairy products increased, small, family-owned dairy farms that had been the main sources of commercially supplied milk, were replaced by large dairy enterprises that functioned much like factories.
Although American dairy farms were increasingly operated as large businesses, the dairy herds supplying milk were still based in rural areas that provided the space for cattle to be raised and fed. Many dairy herds were considerable distances from cities. Because milk and dairy products are highly perishable commodities, reliable methods to preserve and transport milk and dairy foods over long distances were needed.
Through the nineteenth century, as the dairy industry became more complex, new demands arose for standardizing milk and dairy foods and agricultural produce to make them safe for humans to consume. In response to these demands, the federal government created the U.S. Department of
Cheeses have been made from cattle and goat milk products for millennia, but the first American cheese factory came into existence in the United States only in 1851, in Rome, New York, a small town northwest of Utica. Other advances in the manufacture of milk products soon followed. In 1856, for example, the first dried and condensed milks were developed and patented. In 1878, a process to separate cream from milk was developed. Milk bottles were invented in 1884, and tuberculin testing of all dairy cows, to prevent the spread of tuberculosis, began in 1890.
The Mehring milking machine, which was developed during the 1890’s, made it possible to extract milk from cows more efficiently and to reduce milk contamination. Around this same time period, the French microbiologist Louis
Meanwhile, methods of transporting milk products to markets were advancing. In 1841, the first regular shipments of milk by railcar began. By the second decade of the twentieth century, refrigerated tanker trucks were being used to carry milk. At the same time, continued innovations in breeding methods substantially increased milk production. Packaging methods were also improving, using vacuum and ultra-high-temperature pasteurization techniques. Refrigerated transportation and automatic bottling machines permitted distribution of fresh milk and dairy products to all regions of the United States and to other countries.
By the mid-1920’s, the United States had 21.5 million dairy cows that each produced an average of 4,218 pounds of milk per year. By 2007, the number of dairy cows had dropped to only 9.1 million, but their average milk production was more than 20,000 pounds of milk per year (a gallon of milk is about 8 pounds).
In 1922, passage of the federal
Originally designed as a temporary measure, the federal government’s
State milk price controls also began around the same time as the federal controls. These programs have operated essentially the same as the federal program. California is an example of a state that uses state milk price controls to establish raw milk prices. Federal and state agencies work together to establish the minimum prices paid to farmers for four tiers of raw Grade A milk based on weight and fat content. These tiers include the following:
Class I (fluid milk)
Class II (ice cream and soft products)
Class III (cheeses)
Class IV (butterfat and dairy powder)
Under the market order pricing system, dairy farmers are paid for raw milk in two parts–they are paid for the class value of the raw milk sold and given a price differential for the difference in value of the milk on the open market. A differential price adjustment is made for raw milk used in the other classes of raw milk use and a location differential is added to represent the manufacturing value of the milk in the state it is produced in. Dairy cooperatives are allowed to negotiate higher prices.
Computerized milking allows two employees to milk about 160 cows per hour at this Cleveland, Minnesota, farm.
The 1980’s brought the implementation of the federal government’s
Growing frustration with the dairy support programs led to the
In 2007, American dairy farms produced 186 billion pounds of raw milk. The continued
Controversy continues to surround the continued dairy farm economic supports. Research studies show that U.S. consumers pay more for their milk and dairy products than other countries with open market pricing. During the early twenty-first century, Americans have tended to buy less milk because of high retail prices and their increased use of milk substitutes, such as soy milk. At the same time, cheese consumption in the United States has continued to rise. However, cheese prices are affected by raw milk prices, so cheese consumption could yet decline.
Another twenty-first century change in the landscape of the dairy industry has been increased consumer demand for milk products free of pesticides and the hormones and drugs used to increase dairy production in cows. The production of organic milk and dairy products has also changed. Organic milk and dairy products are mainly produced by dairy cooperatives, but these small farms are struggling financially because of increased farming costs and raw milk price restrictions. Continued subsidization of dairy farms removes farmers from supply-and-demand market forces in the economy, ultimately creating a drain on taxpayers and a negative impact on the national economy and foreign exports.
Apps, Jerry. Cheese: The Making of a Wisconsin Tradition. Amherst, Wis.: Amherst Press, 1998. Folksy history of the cheese industry in Wisconsin from the early 1940’s through the end of the twentieth century, when Wisconsin was the leading producer of cheese among American states. Bailey, Kenneth W. Marketing and Pricing of Milk and Dairy Products in the United States. Ames: Iowa State University Press, 1997. Useful survey of all aspects of marketing dairy products of all types, with attention to dairy cooperatives, federal milk marketing orders, price supports, and international trade. Dupuis, E. Melanie. Nature’s Perfect Food: How Milk Became America’s Drink. New York: New York University Press, 2002. Lively and authoritative study that provides a balanced history of American milk production and consumption that considers changing public perceptions of the benefits of drinking milk. Fuquay, John W., Patrick F. Fox, and Hubert Roginski, eds. Encyclopedia of Dairy Sciences. 4 vols. New York: Academic Press, 2002. Perhaps the single-most comprehensive reference source available on the dairy industry, this 2,500-page work addresses almost every imaginable topic in the field. Includes an article by Daniel A. Sumner and Joseph V. Balagtas titled “United States’ Agricultural Systems: An Overview of U.S. Dairy Policy.” Schwarzweller, Harry K., and Andrew P. Davidson, eds. Dairy Industry Restructuring. New York: JAI Press, 2000. Collection of articles examining the special problems of the dairy industries of Western nations including the United States. Among the problems considered are changing technologies, withdrawals of government price supports, globalization of markets, and impact of food processing industries. Turkey Hill Dairy. Turkey Hill: A Family Vision. Lincoln: Schiffer Publishing, 2006. Brief but entertaining and informative history of a small Pennsylvania dairy’s growth from a family farm to a major manufacturer of ice cream and refrigerated teas. Includes many details on how dairies operate.
U.S. Department of Agriculture
Food and Drug Administration