THE VIRGINIA DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES
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What are your current Rules and Regulations?
Milk Commission Publications and Announcements
Why is milk regulated in Virginia?
Milk regulation exists in most developed countries of the world due to the complexities associated with the milk industry. Among all farm commodities, milk is unique due to the highly perishable nature requiring continual refrigeration. It must move through marketing channels within a few days of production. It is not possible for dairy farmers to withhold production in the anticipation of a more attractive price. Storage, transportation and handling are problematic due to the bulky nature of the product and its strict sanitary handling requirements. It is in daily demand as a universally accepted food product. Production and distribution of milk are primarily local in nature. Milk production, once commenced, cannot be stopped due to unfavorable marketing conditions. Once stopped it takes a period of approximately three years to bring production back to required levels.
A stable market is required to avoid dramatic shifts in the supply of milk due to the attractiveness of price in one market over another. This process is known as dumping. It results in creating surpluses in one market and shortages in another. The price of milk is controlled to maintain an orderly market and avoid disruptions in supply. Milk is a product without discernable differences and when producers are paid for their milk, they are paid based upon its end use. Accordingly, milk regulation serves to verify the equitable payment of producer milk. Milk production is capital intensive and generates a low profit margin based on equity. Therefore, wide fluctuations in the cost of milk positions profitability at considerable risk. Milk is produced twice a day, 365 days of the year and is subject to seasonal production fluctuations. Consumer demand, however, remains relatively constant. Therefore, it is essential that a constant and reliable market exists to encourage production at levels sufficient to satisfy consumer demand. Milk is purchased frequently and, therefore, marketed by retailers at price levels to build customer traffic. Thus, it is extremely price sensitive and subject to abrupt and destructive competitive merchandising practices resulting in market disruption. Consumer demand varies inversely in relation to production on a seasonal and day-to-day basis. Accordingly, a surplus of milk must be produced to meet fluctuations in demand. The necessity of surplus milk production, unless regulated, leads to widespread disruption in the market, undermining the viability of the industry and resulting in questionable availability of supply at uncertain prices.
The legislature and the courts have consistently held that milk is affected with the public interest and thus subject to the police power of the state. If the Commonwealth did not regulate its milk industry it is almost certain that the federal government would. Federal control would preclude the citizens of Virginia from having a direct voice in its milk industry. The Virginia dairy farmer has the right under existing federal law to choose which system of milk control that will govern. State and federal systems are funded through industry assessments without general fund support. By not exercising their right to request a federal milk marketing order the Virginia dairy farmer has elected the Commonwealth of Virginia as their choice to regulate and control the milk industry.
The Virginia State Milk Commission exists to ensure that the citizens of Virginia have a constant, available and reasonably priced source of fluid milk. The agency achieves this mandate through the application of the regulations promulgated to regulate, control and supervise the dairy industry in Virginia. The Commission's narrowly focused legislative mandate limits agency programs to those directly affecting the production, storage, transportation, and marketing of milk. The agency can and should always identify and pursue more effective and efficient processes of service delivery. Activities of the Commission, although narrowly focused in scope, parallel those of the Governor in that they are managed to be as least intrusive as possible, limited in size and reach, and effective management of the program avoids federal intervention into state economic agricultural matters.
In order to achieve the mission, a viable dairy industry must exist. The key element to a viable dairy industry is a known competitive producer price and an effective audit program which determines that all processors pay the same price for the same class of milk, and the producers of milk receive an equitable payment for the utilization of their production.
What are your current Rules and Regulations?
The Milk Commission was established in 1934 by Virginia Code. The current rules and regulations for the Milk Commission are part of the Virginia Administrative Code. Both can be found online:
Division of Food & General Environmental Health Services
Virginia Regulatory Townhall
Mideast Marketing Area F. O. 33