Federal Dairy Programs

Pursuant to a congressional request, GAO provided information on how retail and farm-level prices have changed since 1984 for: (1) milk, cheese, and processed dairy products nationwide; and (2) milk in 29 selected U.S. cities.

GAO found that: (1) milk prices at the farm level declined steadily nationwide from August 1990 through April 1991, but retail prices for milk, cheese, and processed dairy products actually increased from August through October 1990 before slightly decreasing through May 1991; (2) during this 10-month period, the national index for milk prices at the farm level declined by about 21.5 percent, whereas the national retail price indexes for the three dairy products decreased slightly, resulting in an increased difference between farm and retail prices; (3) in May 1991 farm milk prices began to rise slightly and seasonal price increases for farm milk are expected through the end of 1991; (4) in the 29 cities studied, announced dairy farm-level milk prices decreased an average of 19.5 percent and retail milk prices decreased an average of 8.2 percent for this 10-month period, varying greatly among the 29 cities; and (5) retail prices for dairy products increased nationwide by about 1 to 2 percent annually for most of the 1980s and compared with other food products, dairy retail prices were relatively stable and increased by a smaller percentage than most other foods' retail prices during this period.