GLICKMAN ANNOUNCES MILK MARKETING ORDER REFORMS
                                                               
                                                               
                                            Release No. 0144.99
                                                               
                                    Andy Solomon (202) 720-4623
                                          andy.solomon@usda.gov
                                 Becky Unkenholz (202) 720-8998
                                            runkenholz@usda.gov


GLICKMAN ANNOUNCES MILK MARKETING ORDER REFORMS

     WASHINGTON, March 31, 1999 -- Agriculture Secretary Dan Glickman today
announced a major overhaul of the 60-year old federal milk marketing order
program that will significantly streamline and improve the nation's wholesale
milk pricing system. 

     "These reforms will help make sure that America's dairy farmers receive
a fair price and that American consumers continue to enjoy an abundant,
affordable supply of milk," said Glickman.  "Our changes will also simplify
the wholesale milk pricing system, making it more market-oriented and more
equitable."    

     The milk marketing order program ensures the fair marketing and pricing
of milk.  It is not a dairy support program.  The current dairy support
program expires on December 31, 1999, unless Congress chooses to extend it.  

     Milk marketing orders classify milk by use, set minimum prices that
handlers must pay for each class of milk, and provide for paying average
prices to all dairy farmers who supply a particular region. 

     Though the program does not set retail prices, these reforms are
expected to reduce the average price of drinking milk by about two cents per
gallon.  

     The reforms announced today include -- 

          Consolidating the current 31 federal milk marketing orders into 11.  

          Replacing the basic formula price (BFP), which is currently used to
     establish minimum prices for milk used in nearly all dairy products,
     with a Class III price for cheese and a Class IV price for butter and
     dry milk products.  These new prices will be determined monthly and will
     be the same in all markets.  This change better reflects the value of
     milk components (protein, butterfat, nonfat solids) used in manufactured
     dairy products.  

          Setting monthly prices for drinking milk (Class I) by using either the
     Class III or IV price (whichever is higher) plus a differential that
     varies by location.  

          Adopting a national system of class I prices that is based, in part, on
     market distribution costs.  

          Determining monthly prices for milk used for soft products (Class II),
     such as yogurt and ice cream, by adding 70 cents to the Class IV price. 

          Standardizing and consolidating certain details in the orders to provide
     consistent definitions of key terms and reporting requirements. 

     The newly consolidated orders must be approved by either two-thirds of
producers in a marketing area or by producers who supply two-thirds of the
milk in a marketing area.  USDA will conduct producer referendums later this
year.  If approved by referendum, the changes will take effect on October 1,
1999.  

     The Secretary's final decision will appear in the Federal Register on
April 2, 1999.  The decision and additional background information can be
accessed on the web at www.ams.usda.gov/dairy/reform.  

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