Kilman Byzantine Milk Price

Food: Inside the Byzantine World of Milk Prices[1]

Scott Kilman

Milk drinkers got some good news earlier this month, when a federal judge threw out one of the strangest federal regulations on the books. Known as the Eau Claire rule, it allowed dairy farmers to collect a bonus for their milk based on how far their cows were from the Wisconsin city.

But consumers haven't won yet. Dairy farmers in about half the country are trying to outmaneuver the judge, and the U.S. Agriculture Department has requested a stay of the order while it appeals. "There will be chaos here if the judge's order stands," says Tom Thompson, a dairy farmer who is president of Georgia Milk Producers Inc.

In most of the country, prices for milk have been more heavily regulated than those for any other U.S. farm product. (Some states, such as California, opted out of the federal price scheme years ago.)

|The Eau Claire Rule |

|The lowest price the Agriculture Department will allow processors in these cities to pay|

|farmers for beverage-grade milk in December: |

|City |Min. Price Per |City |Min. Price Per |

| |Gallon | |Gallon |

|Eau Claire |$1.19 |New York |$1.37 |

|Minneapolis |1.21 |Charlotte |1.37 |

|Chicago |1.22 |Atlanta |1.37 |

|Kansas City |1.27 |Boston |1.38 |

|Denver |1.34 |Tallahassee |1.41 |

|Dallas |1.37 |Miami |1.46 |

|Source: U.S. Department of Agriculture |...