Northeast Interstate Dairy Compact

New England USA

Northeast Interstate Dairy Compact was a multi-state agreement in the United States designed to stabilize milk prices and support dairy farmers in the Northeast region. This compact was a unique approach to dairy policy, differing from federal milk marketing orders by allowing states within the compact to set minimum prices for milk sold for fluid consumption. The compact aimed to ensure that dairy farmers in the participating states received a fair price for their milk, which was often subject to volatile market conditions.

Background

The dairy industry in the United States has historically been subject to significant price fluctuations due to changes in supply and demand, weather conditions, and other factors. To address these challenges and support the dairy sector, various policies and programs have been implemented over the years, including federal milk marketing orders. The Northeast Interstate Dairy Compact was established as a regional effort to provide additional support to dairy farmers in the Northeast, where dairy farming is a critical component of the agricultural economy.

Formation and Membership

The compact was formed in the 1990s, with initial discussions leading to the creation of the compact involving several Northeastern states. The compact officially came into effect with the consent of the U.S. Congress, as required by the United States Constitution for interstate compacts. Member states included Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont, and later, New Jersey joined the compact. Each member state had representation on the Compact's Commission, which was responsible for overseeing the implementation of the compact's provisions and setting the regional minimum milk price.

Objectives and Operations

The primary objective of the Northeast Interstate Dairy Compact was to ensure that dairy farmers in the member states received a fair and stable price for milk, thereby supporting the economic viability of dairy farming in the region. The compact sought to achieve this by establishing a minimum price for fluid milk sold in the region, which was often higher than the federal minimum price set by milk marketing orders.

The Compact Commission, comprising representatives from each member state, played a crucial role in determining the minimum price, taking into account factors such as production costs, market conditions, and the need to ensure a stable supply of milk. The commission also had the authority to implement other measures to support the dairy industry, including research and promotion activities.

Impact and Controversy

The Northeast Interstate Dairy Compact had a significant impact on the dairy industry in the Northeast, with many farmers experiencing increased income stability due to the higher minimum milk prices. However, the compact also faced criticism and controversy. Critics argued that it led to higher milk prices for consumers in the region and was challenged by entities outside the compact area, including milk processors and retailers, who contended that it interfered with free market principles.

Conclusion and Legacy

The Northeast Interstate Dairy Compact was a temporary measure, with its authorization by Congress expiring in the early 2000s. Despite its expiration, the compact remains a notable example of regional cooperation to support agriculture and has been studied as a model for addressing agricultural economic challenges through interstate collaboration. The compact's legacy continues to influence discussions on dairy policy and the broader agricultural policy landscape in the United States.