LATD Staff perform biennial on-site laboratory reviews for the Milk Market Administrators' laboratories and the resident dairy grading laboratories for AMS Dairy Programs. LATD Staff also coordinates and manages monthly check sample programs for butter and non-fat dry milk for the dairy grading laboratories.

There are 10 Federal milk marketing orders in the United States, as authorized by the Agricultural Marketing Agreement Act of 1937. Nine Milk Market Administrators' laboratories are in operation (some orders share laboratories). These laboratories provide milk component testing (on samples taken from farm bulk tanks and over-the-road truck tanks) and marketing services to dairy farmers who are not members of cooperative associations. Also, the Milk Market Administrators’ laboratories oversee the milk component testing and milk pricing activities of commercial laboratories and milk marketing cooperatives in each marketing order. Milk testing performed by the Milk Market Administrators' laboratories is used to establish or verify the price that is paid to dairy farmers for the milk that they market. All of the work is performed to ensure that the price paid to individual dairy farmers reflects the composition of milk that each dairy farmer markets commercially. Overall, the price received by a dairy farmer in a particular order is dependent on how the milk is utilized within that milk marketing order.

Dairy farmers get paid based on the weight and composition of their milk. Four of the Federal milk marketing orders pay dairy farmers for their milk based on fat only, two of the Federal milk marketing orders pay dairy farmers for their milk based on multiple components (fat, true protein, and other solids), and four of the Federal milk marketing orders pay dairy farmers for their milk based on multiple components plus an adjustment for somatic cell count.

The Milk Market Administrators' laboratories also analyze samples of finished fluid milk products and manufactured dairy products to determine how milk components are utilized in a Federal milk marketing order. Also, the testing of finished dairy products ensures that all milk received by a processing plant is accounted for in the plant’s finished product output. Two private laboratories also perform milk component testing services for the Federal milk order system.

There are eight resident dairy grading laboratories that are located at dairy manufacturing facilities throughout the United States. The agricultural commodity graders work at these facilities on a full-time basis and perform the sampling, grading, and laboratory testing on-site. The analytical results from the laboratory analysis of manufactured dairy products are compared to published U.S. standards to determine if a product meets the requirements to be assigned a particular grade.

In addition to the laboratory analysis, organoleptic and visual evaluations are also used by the agricultural commodity graders to assign U.S. grades to manufactured dairy products. The dairy industry pays for this voluntary service through a user-fee and the service provides a third-party evaluation of the dairy products traded in commerce. Non-fat dry milk is graded at four of the eight locations, and butter is graded at seven of the eight locations. For more information, go to Dairy Grading Branch and Dairy Standardization Branch Web sites.