Market Administration & Industry Report
Fiscal Year 2025
MONTANA POOL MARKETING SYSTEM
EXPLANATION OF POOLING & QUOTA SYSTEM
Montana Pool System
Montana's pool marketing system enables producers to receive uniform milk prices (for milk of equivalent butterfat content) based on the overall utilization of pool milk received by all of Montana's pool handlers. Without the pool marketing system, an individual dairy's milk price would be completely dependent upon how the receiving plant utilized the milk. By having a pool marketing system, variation in blend prices (for milk of identical butterfat content) for producers delivering to different plants does not occur. Because of the statewide pooling arrangement, producers supplying an individual plant are not exposed to the volatility of that plant's marketing "wins" and "losses."
Quota System
Montana’s quota system was established in an effort to discourage overproduction that would depress statewide pool blend prices. Montana’s quota system establishes a $1.50/cwt differential in the price of milk produced “in quota” over the price of milk produced “in excess” of quota. Excess production accounted for 0.91% of production in Fiscal Year 2025, a 0.22% increase from Fiscal Year 2024 excess production.
POOL PRODUCTION
During Fiscal Year 2025, 35 pool dairies produced and delivered milk to three pool handlers. The following table shows that in Fiscal Year 2025 the Montana milk pool's annual production decreased by 12,457,817 pounds, the average butterfat content increased by 0.02%, the average pool price increased by $1.59, and the annual gross receipts increased by $848,421 from Fiscal Year 2024. In terms of percentages, production decreased by 6.32%; the average price increased by 7.53%; and annual gross receipts increased by 2.05%. While Fiscal Year 2025 saw a decrease in production pounds, there was a slight increase in the butterfat percent and an increase in the average pool price which resulted in an increase in the Annual Gross Receipts from Fiscal Year 2025.