Over the past 125 years, a complex system of both public and private pricing institutions has evolved to deal with milk production, assembly, and distribution. The pricing of milk in the United States is part market-determined, and part publicly administered through a wide variety of pricing regulations. (Source: USDA)
National agriculture policy forces the implementation of a 1949 system for pricing milk if the country does not have an active farm bill. That antiquated policy uses a complex formula — based on costs of producing milk by hand and including inflation and other adjustments — that will force the U.S. Department of Agriculture to buy milk at nearly double the recent market price.