SANITARY
REGULATION
oftheFLUID MILK
INDUSTRY
INSPECTION, COST, AND BARRIERS
TO MARKET EXPANSION
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MARKETING RESEARCH REPORT N0.889»U.S. DEPARTMENT OF AGRICULTURE^ECONOMIC RESEARCH SERVICE
Historic, archived document
Do not assume content reflects current
scientific knowledge, policies, or practices.
ABSTRACT
This study, based on an industry survey, shows that regulation by
sanitary authorities cost fluid milk plants an estimated $3,895,637 in 1967. Of
this total cost, $3,382,449 was for plant fees and $513,188 for other
expenditures associated with plant inspections. Regulation by primary
authorities accounted for 83.7 percent of the total cost and regulations by
other authorities, 16.3 percent. The 1,249 plants reporting were regulated by an
average of 4.8 sanitary authorities — one primary and 3.8 other. Plant
inspections by these authorities averaged 23.9, of which three-fourths were
primary. Significant differences existed between the sanitary requirements of
authorities regulating many plants. These tended to restrict the flow of milk
between markets, and lead to excessive duplication in plant inspections.
Greater use of reciprocal agreements between sanitary authorities would reduce
the amount and cost of duplicative regulation.
Keywords: Milk, marketing costs, health, marketing, plants.
For sole by the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C., 20402
PREFACE
This study is designed to provide producers, processors, legislators,
Government officials, and others interested in the dairy industry with
heretofore unavailable information concerning costs of duplication in the
sanitary regulation of fluid milk plants and milk producers.
The study was initiated and conducted in cooperation with industry
personnel. Two preliminary reports covering this investigation have been given
to the industry: Sanitary Regulation — Once? Twice? Thrice? by Alden C.
Manchester, Floyd A. Lasley, and W. Webster Jones; and The Costs of
Duplication in Sanitary Regulations by Alden C. Manchester. Slight differences
may appear between certain cost estimates presented in those preliminary"
manuscripts and this final report.
CONTENTS
Page
Highlights iii
Introduction 1
Financing Sanitation Control Programs 2
Purpose of Study 2
Scope and Method 3
Some Operating Characteristics of Survey Plants 5
Sanitary Regulation of Plants 5
Kind of Sanitation Authorities 8
Plant Inspections 10
Fees Paid by Plants 13
Other Costs Associated with Plant Inspections 15
Cost of Sanitary Regulation by Primary and Other Authorities 15
Estimated Total Cost of Sanitary Regulation 18
Variations in Sanitary Requirements of Regulatory Authorities 18
Difficulties in Obtaining Plant Licenses or Permits 22
Other Comments Relating to Sanitary Regulation 22
Expansion of Milk Sales Territory 22
Problems Encountered in Entering New Markets 22
Methods Used to Enter New Markets 26
Sanitation Requirements as Barriers to Market Entry 26
Sanitation Barriers Preventing or Discouraging Sales of Milk in Other Markets 26
Additional Comments on Problems and Suggested Solutions 31
Aid Given to Producers by Plants 31
Producer Permit Fees Paid by Plants 31
Other Aid 32
Difficulties Encountered by Plants in Obtaining Producer Permits 32
Sanitary Regulation of Milk Producers 32
Selected Characteristics of the Dairy Cooperatives 32
Number and Type of Authorities Regulating Producers 34
Fees Paid by Producers to Sanitation Authorities 37
Estimated Expenditures by Dairy Cooperatives on Producer Inspections 37
Aid Given Producers by Dairy Cooperatives to Obtain Permits 37
Farm Inspections 37
Difficulties Encountered by Cooperatives in Obtaining Producer Permits 42
Variation in Sanitary Requirements 43
Farm Sanitation Requirements as Barriers to Milk Sales 43
Examples of Recent Progress 43
Washington, D. C. 20250 June 1970
11
HIGHLIGHTS
Fluid milk plants in the United States paid regulatory sanitation authorities an estimated
$3,382,449 in plant fees in 1967. Other expenditures associated with plant inspection by these
authorities cost an additional $513,188. Of the total cost of $3,895,637, sanitary regulation by
primary authorities accounted for $3,259,001 and regulation by other authorities, $637,636. (A
primary authority is one having primary jurisdiction over the plant; all remaining authorities are
included under "other.")
The 1,249 fluid milk plants reporting paid an average of $1,308 in fees to regulatory sanitation
authorities in 1967. Primary authorities were paid $1,134 and other authorities $174.
Total fees paid per plant varied considerably. About 25.8 percent of the plants paid no fees
and 57.5 percent paid less than $1,000. An additional 10.3 percent paid $1,000 to $4,999; total fees
paid by the remaining 6.4 percent ranged from $5,000 to slightly over $85,000.
Cost to the plants for expenditures associated with plant inspections averaged $183 per plant
in 1967. About $122 of this was for inspections by primary authorities and $61 was for inspections
by other authorities. Assistance given inspectors by plant employees accounted for 86.9 percent of
the total associated cost, with the remaining cost about equally divided between (1) meals, lodging,
and transportation, and (2) other miscellaneous expenses.
The 1,249 plants were regulated by an average of 4.8 sanitation authorities. Each plant was
regulated by one primary authority and an average of 3.8 other authorities, one of which was from
out-of-State. About 64.6 percent of all regulatory authorities were city, county, or city-county
health departments, 27.1 percent were State, and 8.3 percent were Federal military agencies.
During 1967, each plant was inspected an average of 23.9 times. Maximum number of
inspections for any one month varied widely. About 35.6 percent of the plants were inspected only
once a month. Maximum number of monthly inspections for an additional 47.1 percent of the
plants was two to three, and the remaining 17.3 percent were inspected 4 to 31 times. However,
several of the plants reporting a large number of monthly inspections indicated that some were
"walk-thru" inspections, with official inspections usually occurring only once a month.
Eight percent of the plants reported conflicting or significantly different sanitary
requirements of sanitation authorities. Differences in requirements for processed or raw milk
accounted for 70.7 percent of all comments. An additional 16.3 percent concerned differences in
plant layout, construction, and equipment.
About 17 percent of the plants made additional comments on sanitary regulation of milk
plants. Almost 90 percent of these comments related to the excessive amount of duplication of
plant inspections, the lack of uniformity in requirements and differences in interpretation of
requirements, and satisfaction with existing regulations.
During 1963-67, about 13.5 percent of the plants entered an average of 2.9 new markets of
which 2.3 were intrastate and 0.6 interstate. Entry to new intrastate markets was much easier than
entry to interstate markets, although the methods used were similar. About 82.1 percent of the new
intrastate markets and 52.3 percent of the new interstate markets were entered with little or no
difficulty. However, entry to the other markets was judged to be of moderate or major difficulty.
Many plants gave various sorts of aid to their producers in 1967. About one-fourth of the
plants paid an average of $745 in producer permit fees. Fieldmen were hired to help producers meet
and maintain sanitary requirements of regulatory authorities.
iii
Information regarding milk producers was obtained from 123 dairy cooperatives supplying
milk to the plants cooperating in the study. These organizations had an average producer
membership of 564.
Forty-four percent of the producer-members paid an average fee of $14.46 to sanitation
authorities regulating their farms in 1967. Farms were inspected an average of 3.3 times by
sanitation authorities during the year. Ninety-seven percent of these inspections were made by
primary authorities.
About two-thirds of the dairy cooperatives aided producers in obtaining permits to sell milk
for fluid use. The most common assistance was that given by fieldmen to producers to meet and
maintain sanitation requirements.
One-fifth of the cooperatives cited 49 instances where differences in farm sanitation
requirements acted as barriers to milk sales, especially in interstate markets. Differences in barn
construction and equipment requirements and refusal to recognize or accept certification under the
Interstate Milk Shippers program were most common.
Total fees paid for sanitary regulation in 1967 by fluid milk plants surveyed varied
considerably. However, with some exceptions, the cost to plants did not appear to be unduly
excessive. The number of duplicate plant inspections by authorities other than the primary
authority did appear to be excessive, especially for plants in the South Atlantic Region. Greater use
of reciprocity agreements and uniform application of standard codes could reduce the cost of
sanitary regulation of fluid milk plants.
IV
SANITARY REGULATION OF THE FLUID MILK INDUSTRY
Inspection, Cost, and Barriers to Market Expansion
by
W. Webster Jones, Agricultural Economist
Marketing Economics Division
Economic Research Service
INTRODUCTION
During the last 25 years, the U.S. Department of Agriculture has conducted and financially
supported studies of the sanitary control of milk production and distribution. During the late 1940's
and early 1950's, the Department supported two studies by the National Research Council-National
Academy of Sciences. One summarized State sanitary laws and municipal ordinances of 92 cities of
over 100,000 population. 1 The other study reported on the sanitary control and milk quality in
eight large cities and set forth the basic requirements needed to ensure a wholesome milk supply. 2
In 1955, the Department comprehensively studied the impact of sanitary requirements and other
types of regulation on milk marketing. 3
Milk marketed commercially in fluid form is subject to sanitation requirements more rigid
than those for other food products because of public insistance upon strict sanitary control in milk
production, processing, and distribution. Besides noting the importance of milk in the diet, the
public early recognized the danger that milk can serve as a growth medium for certain types of
diseases.
The 10th amendment to the Constitution delegates to the individual States the power to
protect and promote public health. 4 The States, in turn, have often delegated this power to local
city and county governments.
The first exercise of this police power by a State occurred in 1856, when Massachusetts passed
a law prohibiting the sale of adulterated milk. 5 Since then, numerous laws have been passed by
State legislatures prescribing the powers and duties of State and municipal administrative agencies
regarding the sanitary control of milk.
Although the primary aim of sanitary laws was to produce safe, wholesome milk, a number of
differences were written into the numerous codes and ordinances as they developed. Many
municipalities copied the primary features of ordinances of other municipalities, merely writing in
special features to meet their own needs. Many of these features turned out to be barriers to the
free movement of milk however. 6
In earlier years, there was little or no movement of milk between communities. Since all milk
for the then small communities came from nearby farms, the marketing area for milk processors was
about the same as the supply area. However, as the communities grew in size, the supply area also
1 A. C. Dahlberg and H. S. Adams, Sanitary Milk and Ice Cream Legislation in the United States, National Research
Council — National Academy of Sciences, Bui. No. 121, July 1950.
2 A. C. Dahlberg, H. S. Adams, and M. E. Held, Sanitary Milk Control and Its Relation to the Sanitary, Nutritive, and Other
Qualities of Milk, National Research Council — National Academy of Sciences, Pub. 250, 1953.
Regulations Affecting the Movement and Merchandising of Milk, U.S. Dept. Agr., Mktg. Res. Rpt. No. 98, June 1955.
4 Francis W. Laurent, Production and Marketing Regulation for Milk and Milk Products in Wisconsin, University of Wisconsin, Law
School and College of Agriculture Cooperating, Unnumbered Pub., January 1957, p. 3.
s James A. Tobey, The Legal Aspects of Milk Control, International Association of Milk Dealers, Chicago, Illinois, 1936, p. 1.
6 J. C. Olson, Jr., J. C. White, H. M. Bosch, and J. W. Hanlon, A Study of Organization, Operation, and Cost Aspects of the
Minneapolis-St. Paul Milk Regulatory and Quality Control Program, University of Minnesota, Unnumbered Pub., December 1964, p. 1.
grew. Technological changes in plant processing and distribution resulted in fewer but larger and
more efficient plants with wider distribution areas. Often these changes caused an overlapping of
the supply and distribution areas of previously separate communities. Because of the nonuniform
sanitation ordinances in these communities, many plants and producers were subject to inspection
by a multitude of agencies, and sometimes barred from entering certain markets.
Much has been done to assist States and municipalities in making their ordinances more
uniform. In 1924, the U.S. Public Health Service (USPHS) developed a model sanitation regulation
for voluntary adoption by State and municipal authorities. In 1927, a code was published to assist
these authorities in the uniform interpretation of the model regulation. 7 In 1950, a voluntary
State-USPHS Interstate Milk Shipper program was developed by a national conference on interstate
milk shipments. 8 The 3-A Sanitary Standards Committee and the 3-A Symbol Council have
developed standards for the sanitary design, construction, and identification of dairy equipment. In
addition, a milk laboratory certification program has been coordinated by the USPHS through the
individual State milk sanitation control programs. Finally, extensive short course training programs
for laboratory and inspection personnel has been provided by the USPHS and various universities. 9
The 1924 model sanitation regulation of the USPHS has been revised 13 times — the last in
1965. At that time, the regulation was changed from the "Milk Ordinance and Code — 1953
Recommendations of the Public Health Service" to the "Grade A Pasteurized Milk Ordinance - 1965
Recommendations of the United States Public Health Service." As of 1969, about 2,000 municipal
and county health departments used sanitary regulations based wholly or in part on the 1953 or
1965 revisions of the model regulation; about 1,800 use regulations based on the 1953 revision and
203 use regulations based on the 1965 revision. Thirty-nine States have milk sanitation control
programs patterned after the USPHS model ordinance. Of these, 14 are based on the 1953 revision
and 25 on the 1965 revision. 1 °
Financing Sanitation Control Programs
Two ideas exist as to how milk sanitation control programs should be financed. One is that
the dairy industry should bear the cost burden; the other is that the public should. Because of these
differences in approach, the methods used to collect funds vary. Some programs are financed
wholly from public funds, others from fees assessed plants and producers, and others partially from
both sources.
Purpose of Study
The purpose of the study was to determine: (1) the cost of licenses and permit fees charged
fluid milk plants and milk producers by regulatory sanitation authorities, (2) additional plant costs
associated with plant and farm inspections, (3) the extent and cost of duplicatory plant regulation,
and (4) the extent that differences in sanitation requirements of sanitation authorities affect the
movement of milk among markets.
7 John D. Faulkner, Darold W. Taylor, and Irving H. Schlafman, The USPHS Method of Rating Milk Supplies and Its Use in the
Interstate Milk Shipper Program, Journal of Milk and Food Technology, Vol. 25, No. 9., September 1962, p. 277.
8 Ibid, p. 279.
9 01son, White, Bosch, and Harilon, Op. Cit., p. 2.
1 information obtained from U.S. Public Health Service, July 8, 1969.
SCOPE AND METHOD
Since fluid milk plants and producer cooperatives supplying milk to fluid milk plants were to
be included, two different surveys had to be taken. In the first survey, questionnaires were mailed
to about 5,000 addresses of fluid milk plants, although the estimated number of commercial fluid
milk plants at the end of 1967 was only 3,200 (excluding producer distributors). 1 1 Complete data
were obtained from 1,249 fluid milk plants and partial data from 21 others. The 1,249 plants
represent 39 percent of the 1967 estimated 3,200 commercial plants and 46.9 percent of all fluid
grade milk sold to plants and dealers in the continental United States (table 1).
Table 1. — Fluid grade milk receipts by reporting plants compared with total
milk of fluid grade sold to plants and dealers by regions, 1967
Total milk sold to plants
Fluid milk plants
reporting
and dealers
1/
in study
Region :
All milk
Percent
of fluid
Volume
fluid
Number
of
Fluid grade
milk receipts
:Percent of
grade
grade
plants
2/
Volume
: regional
: total
Mil. lbs.
Percent
100
Mil. lbs.
4,146
Number
129
Mil. lbs.
1,891
Percent
4,146
45.6
17,267
99
17,138
272
6,001
35.0
East North Central
32,400
61
19,720
235
9,094
46.1
West North Central
: 22,070
29
6,386
139
3,112
48.7
• 7,666
94
7,278
129
4,701
64.6
: 11,455
81
9,267
153
4,894
52.8
: 14,736
84
12,378
192
6,134
49.6
Total
:109,740
69
76,313
1,249
35,827
46.9
1/ U.S. Department of Agriculture. Milk Production, Disposition and Income,
1966-67.
2/ The 1,249 plants reporting represent 39 percent of the estimated 3,200
commercial fluid milk plants in the United States in 1967.
Survey questionnaires then were sent to 251 producer cooperatives supplying milk to the fluid
milk plants that returned questionnaires from the first survey. Complete data were obtained from
123 of the 251 dairy cooperatives contacted.
1 ' Alden C. Manchester, The Structure of Fluid Milk Markets: Two Decades of Change, U.S. Dept. Agr., Agr. Econ. Rpt. No. 137,
July 1968, p. 6.
The State data were grouped into regions so as to reduce the distortion attributable to the
interstate flow of milk. The regional groupings are:
New England
Connecticut
South Atlantic
Delaware
Maine
Florida
Massachusetts
Georgia
New Hampshire
Maryland
Rhode Island
North Carolina
Vermont
South Carolina
Mid-Atlantic
Virginia
West Virginia
New Jersey
New York
South Central
Pennsylvania
Alabama
Arkansas
East North Central
Kentucky
Illinois
Louisiana
Indiana
Mississippi
Michigan
Oklahoma
Ohio
Tennessee
Wisconsin
Texas
West North Central
Western
Iowa
Arizona
Kansas
California
Minnesota
Colorado
Missouri
Idaho
Nebraska
Montana
North Dakota
Nevada
South Dakota
New Mexico
Oregon
Utah
Washington
Total costs of fees and other expenses associated with plant inspections were estimated for
the United States by expanding the regional totals for plants in the survey. Thus,
T
(i>
where T is the estimated total cost of fees and other expenses associated with plant inspections for
all plants, A is the total volume of fluid grade milk sold to all plants, B is the total volume of fluid
grade milk sold to survey plants, and C is the cost of fees and other expenses associated with plant
inspections for survey plants.
Throughout the report the term"primary" sanitation authority is used to indicate the primary
jurisdictional authority — be it city, county, or State. "Other" sanitation authorities, which are
secondary to the primary one, usually become involved when local milk is shipped to other markets
or when milk is sold to the Department of Defense. Therefore, "other" authorities may be city,
county, State or Federal.
Many of the questions asked respondents were open-end, that is, comments were requested.
The replies were summarized and presented in tables. The different categories of replies shown in
the tables were not preselected, but were chosen to fit the replies of the respondents.
SOME OPERATING CHARACTERISTICS OF SURVEY PLANTS
Although many changes have occurred in recent years in the distribution of bottled milk,
most fluid milk-bottling plants still distribute the milk they bottle. About 97.8 percent of the
survey plants delivered milk to sales outlets in 1967. The remaining 2.2 percent bottled milk but
made no deliveries. On a regional basis, the proportion of survey plants distributing bottled milk
varied from 100 percent in the South Central Region to 94.5 percent of the plants in the East North
Central Region (table 2).
Less than one-half (47.5 percent) of the survey plants were on the Interstate Milk Shippers
program of the U.S. Public Health Service. Regionally, the proportion varied from 22.5 percent for
the New England plants to 72.4 percent for the South Atlantic plants (table 2).
Table 2. — Fluid milk plants in survey by type of business; affiliation with
the U.S. Public Health Service Interstate Milk Shippers program, 1967
Region
New England
Mid-Atlantic
East North Central
West North Central
South Atlantic. . . .
South Central
Western
Total
Percentage breakdown of milk
plants by type of business
Bottling and : Bottling
distributing : only
Percent of plants
on Interstate Milk
Shippers list
Percent
98.4
98.9
94.5
95.7
99.2
100.0
98.4
Percent
1.6
1.1
5.5
4.3
.8
1.6
Percent
22.5
24.3
58.3
48.2
72.1
70.6
48.4
97.8
2.2
47.5
In 1967, the 1,249 plants received slightly over 35.8 billion pounds of grade A or fluid grade
milk from producers — a plant average of 28.7 million pounds. Thus, the average volume of these
plants was about 20 percent larger than the estimated average of 23.8 million pounds for all plants.
The plants also purchased about 1.3 billion pounds of milk from other plants (table 3).
SANITARY REGULATION OF PLANTS
The 1,249 fluid milk plants were regulated by an average of 4.8 sanitation authorities in 1967
(table 4). The authorities were of three kinds: (1) those which inspect the plant and charge fees; (2)
those which inspect the plant but do not charge fees; and (3) those which charge fees but do not
inspect the plant. However, many of the authorities charging fees without inspecting the plant did
pick up samples of the plant's products for quality testing.
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The average number of sanitation authorities regulating the plants varied considerably among
regions. Plants in the New England Region had the highest number of authorities at 8.1 and plants
in the Western Region had the lowest at 2.4. New England plants paid fees to sanitation authorities
in the many small towns in which they distributed milk. The health departments in these
communities may or may not have been active in quality testing of the milk sold. Similar situations
existed in parts of the Mid-Atlantic Region.
Kind of Sanitation Authorities
Each plant had a primary sanitation authority whose sanitation requirements had to be met
before milk could be sold. In addition to the primary authority, the plants had to meet the often
varying requirements of an average of 3.8 "other" sanitation authorities. Regionally, the New
England plants averaged 5.7 more "other" sanitary authorities than the Western plants, which had
the fewest (table 4).
The plants were regulated by an average of one out-of-State authority. Plants in the East
North Central Region were regulated by the fewest (0.5) and the Mid- Atlantic the most (1.6).
Federal authorities, representing various Department of Defense agencies were the most
common out-of-State sanitation authorities regulating the plants (table 5).
City health authorities had the dominant role in plant regulation. Of all regulating authorities,
54.2 percent were classified city, 27.1 percent State, 10.4 percent county, and 8.3 percent Federal.
City authorities predominated in all regions except in the South Atlantic and Western Regions,
where State authorities were more common (table 4).
Table 5. — Average number of out-of-State sanitation authorities per plant
and breakdown of authorities by type, 1967
Region
Percentage breakdown of
authorities by
out-of-State
type
Plai
aver;
it
City
: County 1/ :
State :
Federal
:Total 2/
ige
Percent
31
59
17
34
15
: 11
4
Percent
5
2
4
2
1
Percent
40
21
27
17
29
9
15
Percent
29
14
54
45
55
78
81
Percent
100
100
100
100
100
100
100
Numt
0.
1
1
1
1
)er
7
Mid-Atlantic
6
East North Central
West North Central
South Atlantic. . .
South Central. . . .
5
3
4
7
Total
: 32
3
22
44
100
1
1/ Also includes city-county, district, parish, and township.
2/ Totals may not equal sum of parts because of rounding.
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Local city and county health departments had the primary responsibility for regulating 63.5
percent of the plants. Either the Department of Health or the Department of Agriculture of the
State had the primary responsibility for regulating the remaining plants. Only in the New England
Region did State authorities predominate as the primary regulating authority (table 6). State
authorities did, however, regulate and supervise the operations of local health authorities.
Of the 3.8 other sanitary authorities regulating the plants, 65.2 percent were city and county
health departments. This percentage was especially high in the New England and Mid-Atlantic
Regions and low in South Atlantic and Western (table 6).
Plant Inspections
The fluid milk plants surveyed were inspected an average of 23.9 times during 1967. Plants in
the South Central and South Atlantic Regions were inspected more than 2.5 times as often as plants
in the Mid-Atlantic Region (table 7).
The frequency of plant inspection by primary authorities was about 3 times greater than by
other authorities. Inspections by primary authorities averaged 17.8 per plant; those by 7 other
authorities averaged 6.1. South Atlantic plants were inspected most often by other authorities — 3.7
more times than the East North Central plants (table 7).
Table 7. — Plant inspections by sanitation authorities regulating survey-
plants: Average number of inspections by primary and other authorities
and percent of other authorities inspecting the plants, 1967
Primary
authorities
1/
Other au
thorities
: Ave
: c
:insp
sail
rage number
Region
Average numb
of plant
: inspections
er
: Percent
: inspecting
: plants
f plant
Average number of
plant inspections
ections by
authorities
Number
12.6
Number
6.6
Percent
21.0
Number
19.2
10.1
3.9
27.0
14.0
East North Central
18.8
3.7
33.9
22.5
West North Central
14.8
4.8
39.2
19.6
21.5
13.8
84.5
35.3
27.0
8.8
41.6
35.8
22.8
5.8
79.2
28.6
Total
17.8
6.1
37.2
23.9
1/ All primary authorities inspected the plants in their jurisdiction.
10
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The maximum number of inspections during any one month in 1967 varied greatly. About
35.6 percent of the plants were inspected only once a month; 31.4 percent, no more than twice; 15.7
percent, no more than 3 times; 5.5 percent, no more than 4 times-, and 4.5 percent, no more than 5
times. The other 7.3 percent of the plants were inspected 6 to 31 times (table 8). The number of
these inspections appears to be excessive. However, many were "walk thru" inspections by primary
authorities with no written report made, unless some unsatisfactory condition was noted. A plant
may have only one written official inspection a month, but the inspector may perform an unofficial
inspection each day.
The survey plants were inspected an average of 2.7 times by out-of-State sanitation authorities
during 1967. Federal authorities made 74 percent of these inspections, State authorities 13 percent,
city authorities 12 percent, and county 1 percent. 1 2 Plants in the South Atlantic Region were
inspected the most by out-of-State authorities and plants in the East North Central Region the least
(table 9).
Not all the authorities regulating plants inspected the processing facilities. Each plant was
inspected by the primary authority, but only 37.2 percent of the other authorities performed plant
inspections (table 7).
Most of the inspection activities of other authorities were considered duplicates of inspections
by primary authorities and could possibly have been eliminated by reciprocal agreements between
the agencies. Many of the other authorities not inspecting processing facilities operated quality
control programs however, and performed quality checks on milk sold in their jurisdictions.
Table 9. — Plant inspections by out-of-State sanitation authorities: Average
number of inspections per plant and percentage breakdown of inspections
by type of authority, 1967
Region
Percentage bre
type of out-
.akdown of
■of-State
inspections by
authority
Plant
average
City
: County ±J :
State
: Federal :
Total
2J:
Percent
Percent
Percent
Percent
Percent
Number
2
56
43
100
2.0
25
3
28
44
100
1.3
East North Central.
26
1
5
68
100
1.1
West North Central.
5
12
83
100
2.1
28
2
10
60
100
6.2
i */
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2
98
100
3.8
►
6
94
100
3.9
: 12
1
13
74
100
2.7
1/ Also includes city-county, district, parish, and township.
2/ Totals may not equal sum of parts because of rounding.
V Less than one-half of one percent.
Since these data were gathered, the Department of Defense has agreed to accept the certified rating of the U.S. Public Health
Service under the Interstate Milk Shippers program.
12
Fees Paid by Plants
The 1,249 plants paid sanitary regulator)' authorities fees totaling $1,634,207 in 1967. Fees
paid to primary authorities accounted for 86.7 percent of this and fees paid to other authorities 13.3
percent (table 10).
Table 10. — Fees paid to primary and other sanitation authorities as reported
by plants: Total and average fees paid by region, 1967
Region
New England
Mid-Atlantic
East North Central
West North Central
South Atlantic. . . .
South Central
Western
Total
Total fees paid by
type of authority
Primary : Other : Total
Average fees per plant paid
by type of authority
Primary : Other : Total
Dollars Dollars Dollars Dollars Dollars Dollars
1,689 2,186
40,519 36,300
3,875 13
76,819 149
453,642 41,713 495,355 1,930
353,171 62,712 415,883 2,541
20,372 11,030 31,402 158
365,516 51,831 417,347 2,389
181,415 12,111 193,526 945_
1,416,324 217,883 1,634,207
1,134
17
133
178
451
85
339
63
174
30
282
2,108
2,992
243
2,728
1,008
1,308
Total fees paid by surveyed plants in 1967 were $1,308 per plant. Fees paid varied from
$2,992 to $30 for plants located in the West North Central and New England Regions, respectively
(table 11).
Fees paid to primary authorities averaged $1,134, compared with only $174 paid to other
authorities. Although fewer primary authorities charged fees, the average fee charged was much
higher than that charged by other authorities (table 10). This apparently was an effort by some
primary authorities to obtain funds to help offset the higher cost of primary regulation.
Total fees paid varied greatly among plants. About 25.8 percent of the plants paid no fees.
Fees paid by 57.6 percent of the plants were less than $1,000, and those by another 5.1 percent less
than $2,000. However, slightly over 1.0 percent reported paying over $20,000 in fees; the extreme
amount exceeded $85,000 (table 11).
Fees paid to sanitation authorities by all plants averaged 0.44 cents per hundredweight (cwt.)
of milk handled in 1967. Among regions, fees per cwt. varied from 1.33 cents for the West North
Central Region to 0.02 cents for the New England Region. Fees for individual plants within the
regions ranged from 9.21 cents per cwt. to zero. The average plant cost of fees for States within the
regions ranged from 2.83 cents to zero per cwt. (table 12).
13
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Table 12. — Variation in average fees paid per hundredweight of milk receipts
High and low average fees paid by State, plant and region, 1967
Region
New England
Mid-Atlantic
East North Central
West North Central
South Atlantic. . . .
South Central
Western
Total
Range of State average
fees paid
High
Low
Range of average fees
paid by plants
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44
Other Costs Associated with Plant Inspections
Besides paying fees for permits and licenses, most plants incurred other expenses associated
with plant inspections. Some plant managers consider the time an employee spends with an
inspector a necessary business expenditures rather than an additional expense. Also some managers
welcome plant inspectors because such visits help keep employees alert and aware of the need for
good sanitation practices. However, since plant inspections did require a certain amount of
cooperation and assistance, they have been considered an expense.
Plant employees assisted or accompanied plant inspectors an average of 12.0 times or in 50.2
percent of all inspections in 1967. Among regions, the percent of inspections in which plant
employees assisted varied from 59.8 percent for the South Central Region to only 37.5 percent for
the New England Region, even though the South Central plants had 86.5 percent more inspections
(table 13).
Additional expenditures associated with sanitary regulations cost the plants $228,217 in
1967 — an average of $183 per plant. Use of employee labor in assisting plant inspectors accounted
for $198,278 or 86.9 percent of all expenditures. The remainder was divided about equally between
(1) meals, lodging, and transportation and (2) other miscellaneous costs (table 13).
Cost of Sanitary Regulation by Primary and Other Authorities
Regulation by sanitary authorities cost the survey plants an average of $1,491 in fees and other
expenses in 1967. Costs were highly variable among plants as well as among regions. Plants in the
West North Central Region had the highest average costs at $3,101 and plants in New England the
lowest at $129 (table 14).
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17
Plant cost of regulation by primary authorities accounted for 84.2 percent and regulator} 7 cost
by other authorities 15.8 percent of the total. Both primary and other regulatory costs were higher
in the West North Central Region than elsewhere; both were lowest in the New England Region
(table 14).
Estimated Total Cost of Sanitary Regulation
Expenditures in 1967 by all fluid milk plants in the United States for sanitary regulation are
estimated at $3,895,637. In addition, the plants paid $32,697 for sanitary fees assessed on milk
obtained from other plants and $528,351 in fees assessed producers by sanitary authorities (table
15).
These total cost figures were obtained by expanding the regional totals for the 1,249 plants in
the survey. Factors used to expand the regional totals represented the proportions of each region's
share of total sales of fluid-grade milk to all plants and dealers in each region.
Primary authority regulation cost fluid milk plants an estimated $3,259,001 in 1967. Fees paid
for permits and licenses accounted for 89.3 percent of the total and costs associated with plant
inspections 10.7 percent (table 15).
Regulation by other authorities cost fluid milk plants an estimated $636,636. Fees paid for
licenses and permits accounted for 73.3 percent and costs associated with plant inspections 26.7
percent (table 15).
Variations in Sanitary Requirements of Regulatory Authorities
Much has been done in recent years to minimize the differences in sanitary requirements of
the many health authorities regulating the quality of milk sold for fluid consumption in the United
States. As noted previously, probably the most important factor has been the trend toward greater
usage of the Milk Ordinance and Code of the U.S. Public Health Service in the formulation of State
and local municipal health ordinances.
Only 8.5 percent of the reporting plants reported problems with conflicting or significantly
different sanitary requirements of regulating authorities. A total of 147 were reported — an average
of 1.4 per plant reporting. Among regions, a greater proportion of the plants in the Mid-Atlantic
Region reported differences followed closely by plants in the South Atlantic. The fewest number of
comments were made by plants in New England (table 16).
Differences in sanitary requirements by authorities for milk accounted for 70.7 percent of all
comments. These were about equally divided between processed milk and raw milk. Most comments
about processed milk concerned differing requirements for labeling, dating, and butterfat content.
Differences in bacterial count requirements accounted for 80 percent of the comments on raw milk
(table 16).
Differences in requirements relating to plant facilities constituted 16.3 percent of all
comments. Most of these concerned differences in plant layout, construction requirements, and
type of equipment. A few plants had problems with authorities concerning differences in various
aspects of plant sanitation practices (table 16).
Two other aspects of sanitary regulation caused problems for a number of plants: the
differing sanitary requirements of military and local health authorities and differences in
interpretation, application, and enforcement.
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21
Difficulties in Obtaining Plant Licenses or Permits
Approximately 3.3 percent of the plants reported 42 incidents of difficulties or delays in
attempts to obtain permits or licenses. About 40.5 percent of these incidents concerned differences
in sanitation requirements among health agencies. These problems arose when the survey plants
attempted to sell milk in markets under the jurisdiction of other health agencies. Delays in
inspecting plants and outright refusal to inspect or approve plants accounted for 31.0 percent of the
incidents reported (table 17).
Among regions, the proportion of plants reporting incidents of delays or difficulties varied
from 6.2 percent for the Mid-Atlantic Region to 1.3 percent for the East North Central.
Other Comments Relating to Sanitary Regulation
Seventeen percent of the survey plants made additional comments on various aspects of
sanitary milk regulation (table 18). Almost 90 percent of the 237 comments made fell within three
categories. The first category, consisting of comments on the amount of unnecessary duplicatory
plant inspection, accounted for 31.2 percent. Duplication of plant inspection appeared to be more
of a problem in the Mid-Atlantic and South Central Regions and less so in the East North Central
Region. The second category of comments (30.2 percent) pertained to the lack of uniformity in
requirements, conflicting requirements, and differences in interpretation of requirements. These
factors appeared to be of greatest importance in the South Atlantic Region and of least importance
in the South Central Region. The third category, representing 28.3 percent, expressed satisfaction
with current inspection service. Among regions, approximately 41 percent of the plants in the West
North Central, South Central and Western Regions expressed satisfaction compared to only 8.9
percent in the Mid-Atlantic (table 18).
EXPANSION OF MILK SALES TERRITORY
Problems Encountered in Entering New Markets
During 1963-67, 13.5 percent of the survey plants entered 494 new markets to sell milk.
Among regions, 19.1 percent of the South Atlantic plants reported entering new markets, compared
with only 8.7 percent for the Western Region plants (table 19).
The reporting plants entered an average of 2.9 new markets of which 2.3 were intrastate and
0.6 interstate markets. Plants in the Mid-Atlantic Region entered the greatest number of markets
(4.2 per plant) and plants in the Western Region the least (2.1 per plant). Among regions, the
number of interstate markets entered varied from 1.2 for the Mid-Atlantic Region to 0.3 for the
Western Region. The number of intrastate markets entered varied from 3.2 for the New England
Region to 1.4 for the South Atlantic Region (table 19).
The respondents were asked to rate the degree of difficulty they experienced in entering new
markets. This was done on a rating basis of negligible, moderate, and major. Breakdown of the
replies on this basis shows that the plants experienced much more difficulty entering interstate
markets than intrastate markets (table 19).
Although the degree of difficulty to market entry varied among regions, plants in the South
Central Region encountered the most difficulty entering both new interstate and new intrastate
markets. Plants in the New England Region had the least difficulty entering both intrastate and
interstate markets (table 19).
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25
The plants apparently encountered few problems entering intrastate markets since 82.1
percent of the markets were entered with little or no difficulty (table 20). Conflict with State trade
practice regulations was the most serious problem. Entry into the interstate markets presented the
plants with many more problems. Only 52.3 percent of these markets were entered with little or no
difficulty. The major problems of entry into these markets were labeling, reluctance to grant
permits, and differing sanitation requirements (table 21).
Methods Used to Enter New Markets
The plants used a variety of methods to gain entry to new markets. The methods used to
enter intrastate markets were similar to those for interstate markets although the effectiveness of
the methods apparently differed.
The most common means used to enter intrastate markets was the purchase of new
business — 29.2 percent of the markets were entered this way. Two other commonly used methods,
the extension of wholesale and retail routes, accounted for 21.3 and 12.2 percent, respectively, of
the markets entered (table 20).
The method used most often to gain entry to new intrastate markets varied among regions.
Purchase of business was used to enter 58.7 percent of the New England markets; extension of
wholesale routes for 46.8 percent of the South Atlantic markets; and purchase of business for 42.2
percent of the Mid-Atlantic markets (table 21).
Acquisition of major wholesale accounts was the method most commonly used by the plants
to gain entry into interstate markets, accounting, however, for only 20.2 percent of the markets
entered. Following closely in importance were the extension of wholesale routes and contracts with
subdealers, accounting for 17.7 and 16.9 percent, respectively, of the markets entered (table 21).
Considerable variation occurred among regions; however, except for the Western Region, no
particular method was responsible for entry to more than 40.0 percent of the markets. In the
Western Region, contracts with subdealers were used to enter two-thirds of the markets (table 21).
Sanitation Requirements as Barriers to Market Entry
Only 7.5 percent of the plants reported encountering sanitation barriers in the new markets
entered during 1963-67. Among regions, the proportion of the plants reporting encountering
sanitation barriers varied from 13 percent for the South Atlantic Region to 3.6 percent for the
Western Region. These plants specified 52 such barriers encountered in entering intrastate markets,
and 102 for interstate markets (table 22).
Sanitation Barriers Preventing or Discouraging Sales of Milk in Other Markets
About 9.4 percent of the plants reported on the kinds of requirements (mostly sanitary)
constituting barriers to sales of milk in 159 markets. The proportion of plants reporting barriers
varied among regions from 14.3 percent for West North Central Region to only 4.0 percent for the
Western Region (table 23).
The kind of barrier most frequently reported (23.9 percent of the total) was that created by
differences in plant requirements for sanitation, construction, and equipment. Other barriers
mentioned frequently were: high permit fees; carton, labeling, and dating requirements; and failure
to recognize U.S. Public Health Service's Interstate Milk Shippers certification (table 23).
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The kind of barrier reported most frequently varied among regions. Plant requirements
predominated in the Mid-Atlantic and South Atlantic Regions, and high permit fees was reported
more often in the West North Central and South Central Regions (table 23).
Additional Comments on Problems and Suggested Solutions
The plants were asked to give any additional comments they might have regarding problems
or means used to overcome problems involved in the expansion of milk sales territories. Of the
plants reporting, 69.7 percent made no response, 22.2 percent said "no comment," and only 8.1
percent submitted comments. Among regions the proportion of plants submitting comments varied
from 14.3 percent in New England to 2.6 percent in the Western Region. These comments generally
referred to problems other than sanitary regulation.
AID GIVEN TO PRODUCERS BY PLANTS
Producer Permit Fees Paid by Plants
An average of $745 in producer permit fees was paid to sanitation authorities in 1967 by the
24.4 percent of all plants which reported paying these fees. Payment of producer fees was a more
common practice of plants in the Mid-Atlantic Region than in the other regions. Around 60.3
percent of the plants in this Region paid some producer fees compared with only 0.8 percent of the
plants in the New England Region (table 24). However, most producers in the New England Region
were not charged any fees for permits.
Table 24. — Producer permit fees paid by plants: Percent of reporting plants
paying fees and average fees paid by type, 1967
Region
Percent of plants .
paying fees
Average
type
. fees paid
of authori
by
ty
Primary :
Other
Total
Percent
Dollars
Dollars
Dollars
0.8
60.3
33.6
1/
436
372
16
74
1/
452
East North Central..
446
West North Central. .
17.1
587
587
2.3
56
152
208
1.3
97
97
: 17.6
2,859
202
3,061
Total
24.4
693
52
745
1/ Only one plant reporting,
31
The average cost of producer fees paid by Western Region plants was considerably higher than
that paid by plants in the other regions. Total fees paid in the Western Region averaged $3,061 per
plant, compared with fees ranging from $452 to $97 elsewhere (table 24).
Fees paid to primary sanitation authorities regulating producers accounted for $693 of the
$745 paid by the plants. The remaining $52 was paid to other authorities. Fees paid by plants to
both primary and other authorities averaged higher in the Western Region. Only in the South
Atlantic Region, however, did the cost of fees paid to other authorities average higher than for
primary authorities (table 24).
Other Aid
In addition to payment of fees for producer permits, some plants gave other assistance to
producers. Most of the aid was given to producers who were not members of dairy cooperatives.
About one-fourth of all plants furnished producers some kind of aid. Among regions, the
proportion of plants giving aid varied from 37.3 percent for the East North Central to 15.8 percent
for the Mid- Atlantic (table 25).
Nearly four-fifths of the plants reported giving advice and other assistance to producers to
help them meet sanitary requirements of regulatory authorities. Most of these plants employed
fieldmen to work with producers. Fieldmen of a few plants accompanied inspectors during farm
inspections. Much of the aid given producers not only benefited producers but helped to assure the
plants of a supply of high quality milk.
Difficulties Encountered by Plants in Obtaining Producer Permits
Only 9 plants reported delays or other difficulties in obtaining producer permits. Difficulty in
trying to get farms inspected was the reason given by 6 of the plants for delays in obtaining permits.
The response to this part of the questionnaire was so incomplete that it was not feasible to make
comparisons.
SANITARY REGULATION OF MILK PRODUCERS
Information presented in this section pertaining to the sanitary regulation of fluid grade milk
producers was obtained by mail questionnaires from dairy cooperatives supplying milk to the fluid
milk plants participating in the study. (Sanitary regulation of fluid processing done by these
cooperatives was considered in those sections dealing with fluid milk plants). Useable questionnaires
were returned by 123 dairy cooperatives with a membership of 69,393 producers. Milk sold by these
producers amounted to 23.1 billion pounds or approximately 30.3 percent of all fluid grade milk
sold to plants and dealers in the United States (table 26).
Selected Characteristics of the Dairy Cooperatives
1 3
The cooperatives performed many services for their producer-members in 1967. Almost
three-fourths operated plant facilities of various kinds: About 46 percent had facilities for
manufacturing various dairy products from surplus graded milk; another 11 percent processed and
bottled fluid milk; and some operated country receiving stations. Other major activities of the
cooperatives were price bargaining and participation in the Interstate Milk Shippers program of the
U.S. Public Health S ervice (table 27).
These are not by any means a complete listing of all services and/or benefits given to producer members.
32
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Table 26. — Number of dairy cooperatives, number of producers, volume of milk
sold, and percentage of milk sales to total milk sold to fluid milk plants
and dealers , 1967
Number of
dairy
cooperatives
Number of
producer-
members
Fluid
Pli
grade milk sale;
ants and dealers
3 tO
1/
Region :
Total
: Survey
: cooperatives
: total
: Survey total
: as a percent
:of U.S. total
Number
8
Number
1,212
Mil. lbs.
4,146
Mil. lbs.
323
]
'ercent
7.8
12
4,983
17,138
1,396
8.1
East North Central
39
35,370
19,720
10,421
52.8
West North Central
19
13,422
6,386
3,284
51.4
11
4,596
7,278
2,272
31.2
16
5,958
9,267
2,483
26.8
18
3,852
12,378
2,934
23.7
Total
123
69,393
76,313
23,113
30. 3
1/ See table 1, page 3.
Number and Type of Authorities Regulating Producers
Dairy cooperatives had an average of 2.6 sanitation authorities regulating their
producer-members in 1967. Most individual producers were regulated by just one authority.
However, most cooperatives had members regulated by different sanitation authorities.
Primary authorities accounted for 2.0 of the 2.6 authorities regulating producer-members of
the cooperatives. Reciprocal arrangements were made between some authorities so that only one
inspected any given farm (table 28).
The authorities were classified as being either city, county, or State. Certification under the
Interstate Milk Shippers program of the U.S. Public Health Service was done by a State agency
under agreement with the U.S. Public Health Service. This regulatory activity was classed as State
rather than Federal. About 41.5 percent of the authorities were classed as State — usually State
health or agriculture agencies. The rest were about equally divided between city and county 7
authorities. The primary authorities were almost equally divided between city, county, and State
with county agencies predominating slightly (table 28).
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36
Fees Paid by Producers to Sanitation Authorities
Producers paid only a part of the cost of sanitary regulation of fluid grade milk production.
The rest of the cost was borne by fluid milk plants and by subsidies from local, State, and Federal
tax monies.
Forty-four percent of the producers in the study paid a total of $441,671 in fees to sanitation
authorities in 1967. Regionally, the proportion of producers paying fees varied from 62.4 percent
for the West North Central to none in New England (table 29).
Those producers paying fees paid an average of $14.46. The average was highest in the South
Central and Western Regions where the amount paid was $49.61 and $39.61, respectively. No
producer fees were paid in the New England Region (table 29).
Except for the 0.4 percent paid to other authorities, all of the fees were paid to primary-
regulatory authorities. Over 98 percent of the fees paid to other authorities was paid by producers
in the East North Central Region (table 29).
The fees assessed producers were classified as variable or fixed. Authorities assessed variable
fees on the basis of travel cost of inspector, number of milk cows, volume of milk produced, and
mileage zones. Fixed fees were usually minimal and paid anually. The two most common fees paid
were 1 cent per hundredweight of milk produced, and annual fixed fees of $1-$10. Each of these
accounted for 19.7 percent of all fees paid (table 30).
Estimated Expenditures by Dairy Cooperatives on Producer Inspections
Sanitary inspection of producers' farms cost the dairy cooperatives an estimated $9,938 per
organization in 1967. Time spent by fieldmen making preinspections, assisting inspectors, followup
inspections, free inspections by licensed inspectors, and other assistance to help producers meet
sanitary requirements accounted for 76.4 percent of these costs. The remaining costs were mostly
associated with travel expenses of fieldmen and inspectors (table 31).
Estimated cost per producer was $16. Among regions, the cost varied from $37 for the
Western Region to $4 for the Mid-Atlantic Region (table 31).
Aid Given Producers by Dairy Cooperatives to Obtain Permits
About two-thirds of all the dairy cooperatives reporting aided producers in obtaining permits
to sell fluid grade milk. Regionally, only 38.9 percent of the Western Region organizations reported
giving aid; all of the organizations in the New England Region did so (table 32).
The most common form of aid was assistance given by fieldmen to help producers meet and
maintain appropriate sanitation requirements. Slightly over 58 percent of all cooperatives supplied
this kind of aid. In addition, some fieldmen made preinspections of farms, accompanied inspectors,
and made followup inspections (table 32).
Farm Inspections
Farms of producer-members of the cooperatives were inspected by sanitation authorities an
average of 3.3 times in 1967. Farms in the West North Central Region were inspected only 2.1 times,
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41
compared with 7.9 times for farms in the Western Region. Considerable conformity occurred among
the New England, Mid-Atlantic, and East North Central Regions, as the number of inspections per
farm averaged 2.5 for each region (table 33).
Ninety-seven percent of all farm inspections were made by primary authorities. The remaining
3 percent were made by other authorities and were mostly duplicatory in nature. Some inspections
by other authorities were for the purpose of certification to the Interstate Milk Shippers program.
Duplicate inspections appeared to be somewhat more common in the South Atlantic, South
Central, and Western Regions than elsewhere. However, the average number of inspections per farm
by other authorities was no greater than 0.4, indicating that duplication of inspection at the farm
level has become rather insignificant (table 33).
Fieldmen or other cooperative employees accompanied farm inspectors one-third of the time.
Of these inspections, 1.0 was by primary authorities, and 0.1 by other authorities (table 33).
Difficulties Encountered by Cooperatives in Obtaining Producer Permits
Only 10 dairy cooperatives reported any difficulties or delays in obtaining producer permits.
Most delays reported were in getting farms inspected and approved. Time lost by these delays
ranged up to 6 months. These few instances do not represent the complete situation, however, since
only those cases where permits were sought and obtained were considered.
Table 33. — Farm inspections by sanitation authorities as reported by 123
dairy cooperatives: Average number farm inspections per producer by kind
of authority and average number of inspections in which inspector was
accompanied by cooperative employee by kind of authority, 1967
Region
: Farm :
Inspections
of authori
by kind
ty:
: Farm inspections in
: employee accompanied
: Primary : Other :
which
inspector
Primary
: Other
: Total
Total
Number
2.2
: 2.4
2.5
2.1
4.1
7.3
7.5
Number
0.3
.1
1/
.4
.4
.4
Number
2.5
2.5
2.5
2.1
4.5
7.7
7.9
Number
1.2
1.4
1.4
.1
.7
.1
1.1
Number
0.2
.2
.1
.3
.2
.1
Number
1 4
1 6
East North Cent
West North Cent
South Atlantic.
ral
ral
1.5
.1
1.0
South Central
.3
1.2
Total
3.2
.1
3.3
1.0
.1
1.1
1/ Less than 0.05 percent.
42
Variation in Sanitary Requirements
The cooperatives reported 43 instances of either conflicting or significantly different
sanitation requirements. The proportion of cooperatives reporting varied from slightly over 36
percent of the South Atlantic associations to none in the New England and Western Regions.
The biggest problem (30 percent of total) arose from the differences among sanitation
authorities as to the bacteria count permissible in raw milk. Two other requirements frequently
reported as troublesome were the differences in (1) farm water requirements and (2) milk house and
equipment. Each of these accounted for about one-sixth of the total.
FARM SANITATION REQUIREMENTS AS BARRIERS TO MILK SALES
Differences in farm sanitation requirements at times have created barriers to the movement of
fluid milk between markets regulated by different sanitation authorities. Such barriers may be
created not only by differences in requirements but also by differences in the interpretation of
basically similar requirements or by differential application of standards.
About one-fifth of the dairy cooperatives cited 49 incidents where differences in sanitation
requirements acted to obstruct sales of milk in other markets. Most involved interstate markets. Of
the 42 interstate barriers reportedly encountered, no specific barrier was named in 31 percent of the
cases. The two interstate barriers most frequently cited were the differences in barn construction
and equipment requirements and the refusal to recognize Interstate Milk Shippers certification.
These accounted for almost 43 percent of all interstate barriers (table 34).
Apparently, considerably fewer barriers existed between intrastate markets, because these
accounted for only one-seventh of all barriers reported. All of these concerned differences in barn
construction and equipment requirements (table 34).
EXAMPLES OF RECENT PROGRESS
Several significant changes have occurred at State and Federal levels which affect the sanitary
regulation of fluid milk. Changes in State laws permit greater freedom in the movement of milk
within States and reduce the cost to fluid milk plants for sanitary regulation. Changes in Federal
regulation reduced the number of duplicate plant inspections and plant costs associated with these
inspections.
During the last 5 years the legislatures in at least two States — Ohio and Indiana — have
enacted new laws regulating the production and marketing of fluid milk. Ohio's law, which became
effective November 1, 1965, established guidelines for determining inspection fees charged fluid milk
processors by sanitary authorities. The law also provides for the free movement within the State of
milk produced under the regulation of any approved State sanitary authority, provided that at the
time it is offered for sale it meets the quality and health standards prescribed by applicable laws and
regulation. 14 The new Indiana law, which became effective January 1, 1968, moved the sanitary
regulation of fluid milk plants out of the jurisdiction of local health authorities and placed it with
14 Ohio State milk law to amend sections 925.01, 3707.33, and 3717.01, to enact sections 3707.351 to 3707.376, inclusive, and
to repeal section 3717.05 of the revised code. Effective November 1, 1965.
43
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*U.S. GOVERNMENT PRINTING OFFICE: 1 970-39U-383/ERS-99
the State Board of Health. The Board, however, was given the power to delegate this regulatorv
authority to approved local health departments. 1 s
The Department of Defense (DOD) has made two changes which significantly affect the fluid
milk plants from which they obtain fresh fluid milk products. On July 27, 1966, the DOD began to
recognize the USPHS Interstate Milk Shippers program by accepting products from plants with
USPHS pasteurization ratings of 90 and above without requiring any additional plant inspection.
New rules were established in October 1969 concerning the procurement of fresh fluid milk
products from plants not on the Interstate Milk Shippers program that allowed the DOD to reduce
the number of times these plants were inspected from once a month to once even" 3 cr 6 months,
depending on the quality control and product testing history of the plants. ' 6
Changes such as these encourage efficiency in milk production, processing, and distribution.
Costs are lowered by eliminating duplication of sanitary regulation and bv reducing the aspects of
regulations which in the past may have functioned as impediments to trade.
15 Grade A Milk Plant Inspection Law, Chapter 301, Acts of 1967, Indiana General Assembly. Indiana State Board of Health,
Indianapolis, Indiana.
16 Quality and Re
Office of the Assistant Secretary of Defense (Installations and Logistics). Washington, D.C
Quality and Reliability Assurance Handbook, Supplement A,H-57-Procurement Quality, Assurance for Fresh Dairy Products,
45
UNITED STATES DEPARTMENT OF AGRICULTURE
WASHINGTON, D.C. 20250
OFFICIAL BUSINESS
PENALTY FOR PRIVATE USE, $300
POSTAGE & FEES PA©
United Statu Department of Aa/icultur*
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