Dairy farmers hit with double whammy

America’s dairy industry is being ravaged by bird flu, leading to a significant decline in milk production in many states – including California, the nation’s largest dairy-producing state that hit a 20-year low in 2024. But unlike eggs, which spiked in price due to the bird flu’s impact on poultry flocks, consumers aren’t likely to see a similar increase in milk prices because of federal price-control laws.

However, while those price controls save grocery store shoppers money, dairy farmers say it’s pushing them out of business.

“I can’t see how any dairy farm is going to sustain this,” said Brenda Cochren, a Pennsylvania dairy farmer and agricultural reform advocate.

Dairy farms have for decades shrunk under the pressure of corporate consolidation and price caps lobbied for by large milk processors. Now, with bird flu spreading through dairy herds across the country and recent updates to how milk is priced taking effect this year, Cochren said small dairy farmers are facing a crisis.

Most of the nation’s dairy farmers are paid through the Federal Milk Marketing Orders, an almost-90-year-old pricing formula that creates daily minimum prices a milk processor can pay a dairy farmer for their milk. Fluid milk is an extremely perishable and time-sensitive product that needs to be processed quickly before expiring, which processors could use to their advantage in buying milk, according to a 2017 report by the Congressional Research Service. The Federal Milk Marketing Orders were created in 1937 to prevent those unfair buying practices. The Federal Milk Marketing Orders also establish standards for how much money is taken from a farmer’s pay to turn milk into products such as cheese, yogurt and butter – often referred to as a “make allowance.”