Each month, fluid milk processors (handlers) who are regulated under the Federal milk order (FMO) program are required to file a report of milk receipts and utilization (R & U Report) with the order’s market administrator (MA). The R & U Report shows, for the month, the quantities of milk and milk products received by the handler and how this milk was used in the handler’s plant. The R & U Report is used by the MA to determine the pool obligations of the handler. The MA also uses the report to generate summary market statistics for the order, which are filed with the Market Information Branch (MIB) in Dairy Programs. The MIB compiles a summary report of the individual order statistics and disseminates this information.

Following is a brief description of some terms used in FMO statistics. For a detailed description of these and other terms, see the specific FMO provisions in the Code of Federal Regulations.

A marketing area is an area designated in a Federal milk order’s provisions within which the handling of milk is regulated by the order. Generally, the size of the marketing area is determined by the sales territory of competing handlers. The recent consolidation of orders also looked at overlapping areas of milk supply, the number of handlers within the area, natural boundaries, cooperative association service areas, common regulatory provisions, and milk utilization in common dairy products.

Handlers regulated under Federal milk orders process about 75 percent of all the milk marketed in the U.S. Given this, and the claim that FMO market statistics are both comprehensive and accurate, one common use of these monthly statistics is to gauge milk marketing trends in the U.S. by making year-to-year comparisons of specific statistics. The following should be kept in mind in making these comparisons. First, the reform and consolidation of Federal milk orders that occurred on January 1, 2000, resulted in significant changes to the marketing areas of some orders, and thus the handlers regulated by the new order. In some cases, previously unregulated area and thus unregulated handlers were added to an order’s purview. Second, in some months, significant amounts of milk, normally associated with some orders, may not be pooled due to disadvantageous class and uniform price relationships. This has not occurred to as large an extent in recent years.