Food safety authorities impose more regulations on dairy than almost any other food product. Multiple and intertwined federal and state laws and regulations impose very high standards on anyone handling dairy products. Consequently, dairy farmers must work very closely with regulators to ensure compliance with complex regulations. This section provides an overview of the various regulatory entities and dairy-specific issues, but it cannot serve as a substitute for contacting the local Illinois Department of Public Health (IDPH) office to discuss plans before starting.
- Federal Regulation
Federal law technically only applies to dairy products that move in interstate commerce. However, Illinois law incorporates many of the federal regulations, and various federal services—such as the USDA grading system—are available to dairy farmers regardless of whether they sell across state lines.
A. The Food and Drug Administration
The Food and Drug Administration (FDA) administers the Federal Food, Drug and Cosmetic Act, which prohibits adulterated or misbranded food from entering interstate commerce (21 U.S.C. §331). Understanding the nuances of the legal definitions of “adulterated” and “misbranded” is tricky, but it should be sufficient to know that FDA considers a food adulterated if it contains any “poisonous or deleterious substance” or if it is “filthy, putrid, decomposed” or otherwise unfit for food (21 U.S.C. § 342), and misbranded if it does not comply with FDA labeling standards (21 U.S.C. § 343). For dairy farmers, this means that all milk and milk products that will be shipped across state lines must comply with FDA standards of identity, which generally require pasteurization unless the product is a cheese that is exempt (21 C.F.R. § 1240.61; parts 131; 133). Further, all milk and milk products must also adhere to the Grade A Pasteurized Milk Ordinance (PMO), which is available on the FDA’s website.
The PMO is a 300-page model regulation published by the FDA. Many states, including Illinois, use the PMO as their standard for sanitation of all milk products (77 IAC § 775.30), whether the products ship in state or out of state. Farmers who are interested in starting a dairy direct farm business, including processing or production of milk products (cheese, ice cream, etc.), should read the PMO carefully. If a dairy wants to be on the Interstate Milk Shippers (IMS) list, the National Conference of Interstate Milk Shippers requires the State Milk Sanitation Rating Authorities to certify that the dairy attains the milk sanitation compliance and enforcement ratings in the PMO. More information about inclusion on the IMS list is available on the FDA’s website.
The PMO prohibits the misbranding and adulteration of milk and milk products, requires permits and inspection of milk production and processing (including transportation), and prescribes labeling rules. The PMO also sets forth specific standards for production and processing. Grocery stores, restaurants, and other similar establishments that sell milk and milk products at retail are exempt from PMO requirements as long as no processing occurs and a permitted establishment supplies the milk. Brokers, agents, and distributors that purchase milk and milk products from permitted establishments are also exempt from permitting requirements.
B. United States Department of Agriculture (USDA)
The USDA administers a variety of programs for promoting or benefiting dairy. A full listing of USDA dairy programs can be found online on the AMS website. This section addresses only grading and standards, milk marketing orders, and mandatory reporting.
Grading and Standards
The USDA provides grading and standards services to certify that products are of a certain quality (7 C.F.R. Part 58). To qualify for the grading and standards service, the USDA must first inspect a dairy plant and approve it as being in compliance with USDA’s sanitary standards. A producer can then request grading services. Use of the program is voluntary, but it is important for producers who want to market to schools and other institutions that require foods to meet certain standards. For more information on the benefits of the grading and standards program, as well as information on how to apply for inspection and certification, visit the USDA's website.
Federal Milk Marketing Orders
Milk Marketing Orders are the USDA’s means of stabilizing supply for consumers and providing uniform prices for producers. The Agricultural Marketing Service (AMS, a department of the USDA) uses the orders to routinely set the minimum price that dairy farmers must be paid for fluid milk within a given geographic area (7 U.S.C. § 608c(5)). AMS establishes its orders using formal rulemaking procedures, and the regulations are in 7 C.F.R. Parts 1000-1170. The orders apply to “handlers” (7 C.F.R. §§ 1030.30, 1032.30), which are anyone operating pool or non-pool plants, anyone receiving milk for processing and redistribution, or anyone brokering milk for processing (7 C.F.R. § 1000.9). AMS also considers cooperatives to be handlers, although they have a slightly different structure for determining payment amounts to their producers (Id.). Most direct-to-consumer dairies are producer-handlers, which are producers who also process and distribute their own milk (7 C.F.R. §§ 1030.10; 1032.10). In order to be a producer-handler, a producer must be able to (1) demonstrate ownership of the animals and control over their care, (2) demonstrate ownership of the production and processing equipment, and (3) show that the operation is entirely at the owner’s risk (7 C.F.R. §§ 1030.10(e); 1032.10(e)).
Prior to June 1, 2010, producer-handlers were not subject to the minimum price orders. However, on April 23, 2010, the USDA issued a final rule that subjects producer-handlers who distribute over 3 million pounds a month to the marketing orders (75 Fed. Reg. 21157). The effect of this new rule is that exceptionally large dairies must now comply with the Milk Marketing Orders. More information on this change to the law is available on the AMS website.
There are currently 11 Federal Milk Marketing Order Areas. Most of Illinois falls within the Central Order (7 C.F.R. Part 1032; http://www.fmmacentral.com/), although parts of Northern Illinois fall within the Upper Midwest Order (7 C.F.R. Part 1030, http://www.fmma30.com/). Each Order provides the minimum price a fluid milk handler must pay producers in that region. The intended use of the milk determines the “class,” which in turn determines the price. (7 C.F.R. § 1000.40). Class I, which covers milk intended for consumption as milk, is the most valuable. Class II includes, but is not limited to, milk that will be cottage cheese, frozen desserts, sour cream, custards, pancake mixes, and buttermilk biscuits. Class III is milk for products such as cream cheese and cheeses that may be grated, shredded or crumbled. Class IV, the least valuable, is milk for butter, sweetened condensed milk, and dried milk. Each month, the Milk Market Administrator will issue price orders which then adjust based on the value of the components of the milk (butterfat, protein and other solids) and the price differential for the county where the product is delivered. The calculations are somewhat confusing, although the AMS attempts to explain the method on its website. Dairy farmers who believe that their handler is not paying the mandated minimum price for milk should contact the director of the applicable Milk Marketing Order region.
Mandatory Price and Storage Reporting
Mandatory price and storage reporting requirements are authorized by amendments to the Agricultural Marketing Act (7 U.S.C. § 1637b). Mandatory reporting provides reliable information to calculate the pricing factors used in the Milk Marketing Order formulas. Even if a producer-handler is not subject to the Milk Marketing Order, he or she is likely still subject to some reporting requirements.
Price reporting requires manufacturers of cheddar cheese, butter, nonfat dry milk, and dry whey to submit weekly reports including the price, quantity, and moisture content, where applicable (7 C.F.R. §§ 1170.7, 1170.8). Manufacturers that process and market less than 1 million pounds of dairy products (cheese, butter and other items that are not fluid milk) per year are exempt (7 C.F.R. § 1170.9). Dairy products with a higher value than the basic commodity (for instance, kosher butter produced with a rabbi on site or organic milks) are also exempt from price reporting requirements (7 C.F.R. § 1170.8). It is the obligation of the producer to track annual production and report if they exceed the 1 million pound exemption. Reports must include the “name, address, plant location(s), quantities sold, total sales dollars or dollars per pound for the applicable products, and the moisture content where applicable.” (7 U.S.C. § 1170.4(a)). A weekly price report must be submitted to the National Agricultural Statistics Service (NASS) by noon every Wednesday using the appropriate form. The forms are available on the NASS website.
Storage reporting requires those who store butter, anhydrous milk fat (AMF), butter oil, and natural cheeses to submit monthly reports on quantity (7 C.F.R. §§ 1170.7(b), 1170.10)). There is no exemption based on quantity for the storage report requirement. Manufacturing plants must make monthly storage reports of the dairy products that they have on hand (7 C.F.R. § 1170.7(b)). Dairy products are those used to set prices for Class III and Class IV milk under the Milk Marketing Orders (7 C.F.R. § 1170.4). This includes cream cheese, cheeses that can be shredded, grated or crumbled, butter, evaporated and sweetened condensed milk, and any dried form of milk (7 C.F.R. § 1000.40). The report must indicate the name, address, and stocks on hand at the end of the month for each storage location.
The reporting requirement applies to “all warehouses or facilities, artificially cooled to a temperature of 50 degrees Fahrenheit or lower, where dairy products generally are placed and held for 30 days or more” (7 C.F.R. § 1170.10(a)(1)). Stocks in refrigerated space maintained by wholesalers, jobbers, distributors, and chain stores are exempt, but a direct farm business maintaining stocks of its own products would not be exempt from reporting. Reportable products include salted and unsalted butter, anhydrous milk fat (AMF), butter oil, and natural cheese including: barrel and cheese to be processed, American type cheeses (cheddar, Monterey, Colby, etc.), Swiss cheese, and other natural cheese types (brick, mozzarella, Muenster, Parmesan, etc.). Processed cheese is excluded (7 C.F.R. § 1170.10(a)(2)(i)). All manufacturers of nonfat dry milk and dry whey must report all stocks on hand (7 C.F.R. § 1170.10(b)). NASS mails the monthly reporting forms to producers (73 Fed. Reg. 34175, 34176 (June 17, 2008)).
- State Regulation
It is imperative to contact the Illinois Department of Public Health (IDPH) as early as possible in the planning stages of a dairy operation, because the regulations are complex and exacting. IDPH should work closely with a farmer to ensure the dairy operation will operate legally. Regional inspectors oversee the bulk of the dairy inspection and permitting process, so start by contacting the regional IDPH office.
A. Inspections & Permitting
The Illinois Food, Drug, and Cosmetics Act (IFDCA) (410 ILCS 620) and the Grade A Pasteurized Milk and Milk Products Act (PMMPA) (410 ILCS 635/3) govern dairy producers in Illinois. Regulations for licensing and subsequent inspection of dairy farms and dairy plants are found in two places: Grade A Pasteurized Milk and Milk Products regulations (77 IAC Part 775), and Regulations for Manufactured Dairy Products (77 IAC Part 785).
The Illinois Food Drug and Cosmetic Act (410 ILCS 6120)
The IFDCA is similar to the federal FDCA (FFDCA) in that it prohibits misbranded or adulterated food from entering the marketplace, and it incorporates the federal standards of identity and definitions as the state standards except insofar as they are modified or rejected by the Illinois Department of Public Health (410 ILCS 620/9). The IDPH has not modified or rejected the federal standards of identity. Instead, the Illinois Pasteurized Milk and Milk Product Regulations explicitly incorporate the federal standard of identity for milk (77 IAC § 775.20(3)(a), 21 C.F.R. 131.110) and the Manufactured Dairy Products regulations specifically adopt the federal standard of identity for cheeses and related products (77 IAC § 785.120(a)(12), 21 C.F.R. Part 133).
The Illinois Grade A Pasteurized Milk and Milk Products Act (PMMPA) (410 ILCS 635)
The PMMPA regulates construction and operation of dairies and dairy handlers to ensure cleanliness and safe manufacturing practices. The Act also prohibits the sale of unpasteurized milk for human consumption, unless it is sold on the farm (410 ILCS 635/8). As discussed above, the Illinois PMMPA regulations incorporate the latest federal Grade A PMO for all aspects of dairy production, processing and handling (77 IAC § 775.20-775.30). However, some of the Illinois regulations differ slightly from the federal Grade A PMO.
The Illinois PMMPA requires prospective dairy farmers and/or dairy plants that produce milk to submit construction, reconstruction, or alteration plans to IDPH for approval before beginning any work (410 ILCS 635/7). IDPH will conduct a plan review to ensure that the pipeline design, equipment, barns, etc. are likely to pass inspection. This review should be completed within 30 days (77 IAC 775.80). IDPH will work with farmers to ensure that their plans meet the specific requirements for the type of dairy farm or plant that they will operate, but they will not guarantee that any construction will meet the permitting standards. This could mean that, after construction has been completed, further modifications and further inspections may be needed before a permit can be obtained. To minimize risk, farmers should get a guarantee from the manufacturer that they will accept a return or work to make modifications that the IDPH may subsequently require.
After receiving preconstruction approval and completing construction, all dairy farms, plants, and receiving and transfer stations that produce and market milk must apply for a permit from IDPH (410 ILCS 635/5). IDPH does not have any written guidance on the application process, but multiple authorities explained to the authors that IDPH first inspects the plant to ensure the facility, equipment, and manufacturing process (and any labels, if it is a processing plant) comply with the requirements of the acts and regulations. If the facility passes inspection, the inspector will provide the owner with an application form to submit to the central IDPH office. IDPH then approves the permit when the regional office that conducted the inspection confirms that the dairy complies with all rules and regulations. Operators must conspicuously display their permits at the dairy farm (410 ILCS 635/9).
The law defines a “dairy farm” as where the cows and goats are kept and the milk is produced (410 ILCS 635/3(b)(1))., There is no fee for a dairy farm permit (410 ILCS 635/5.1). For a dairy farm to receive a permit, the milking facility will need to meet cleanliness requirements and the herd will need to meet certain health requirements. The farmer must be able to demonstrate the herd is free of and protected from tuberculosis (PMO §8(1)), 77 IAC 785.300(b)) and free from or under an eradication program for brucellosis (PMO §§8(2) and (3); 77 IAC 785.300(c)). Finally, the farmer cannot sell milk from cows known to be infected with mastitis or milk containing prohibited drug residues or pesticides (77 IAC 384.300(d), citing 21 CFR 193 and 40 CFR 180).
A “milk plant” is anywhere the milk is collected, handled, processed, stored, pasteurized, aseptically processed, bottled or prepared for distribution (410 ILCS § 635/3(b)(3)). There is a $100 fee for processing plant permits, which must be renewed annually (410 ILCS 635/5.1). Once permitted, a facility must frequently test its products and undergo ongoing inspections and testing by IDPH (410 ILCS 635/10). The regulations also require processors to maintain records of tests and submit monthly raw producer samples and quality counts (77 IAC §§ 785.220(b); 785.230(b), 785.270). Generally, these tests and samples are submitted to IDPH by large dairy cooperatives that receive milk from dairy farmers. Representatives from milk plants must visit producers that do not meet the requirements to inspect the facilities and offer assistance (77 Ill. Adm. Code 785.280). Some smaller farms and all farms that produce their own milk and dairy products must submit these tests directly to approved milk laboratories. The FDA maintains a list of milk laboratories approved by federal and state agencies on its website.
The Butter and Cheese Factories Act (410 ILCS 610)
This law requires butter and cheese manufacturers who are organized as a cooperative or using a dividend plan to post a $6,000 bond with the Secretary of State before beginning manufacturing. It also imposes reporting requirements of production quantities, sales, prices, and dividends paid.
B. Organic Milk
Farmers interested in producing and marketing certified organic milk must follow USDA’s Agricultural Marketing Service (AMS) organic standards (7 CFR Part 205). The regulations generally require the dairy to manage the animals according to certain standards and obtain certification from an accredited certifying entity. For more information on organic management and certification, see the “Organic Marketing” chapter of this Guide.
C. Animal Welfare
Illinois dairy farmers should also be aware of regulations concerning livestock, such as animal health laws and land use/siting laws, administered by IDOA. The “Meat and Poultry” chapter of this Guide covers the Illinois Livestock Facilities Management Act (505 ILCS 77) and other environmental concerns; it also provides further information on various livestock welfare and health laws.
D. Milk Promotion Board
The Illinois Milk Promotion Act (505 ILCS 95) established the Illinois Milk Promotion Board to develop milk promotion programs for the Illinois dairy industry. Generally, the first purchaser of milk (the cooperative or processor) collects “checkoff” contributions from the dairy farm operator. This fee is mandatory for all producers of Grade A and Grade B milk, whether they are selling it as fluid milk or producing it into dairy products and selling directly to consumers. Dairy farmers that produce and distribute their own dairy products must submit the checkoffs directly. Ten cents per hundred weight (100 pounds) is collected for the Illinois Board and five cents per hundred weight is collected for the National Dairy Council. These rates are authorized by the Dairy and Tobacco Adjustment Act of 1983, Pub. L. 98-180, 97 Stat. 1128 and Section 1150.152 of the Dairy Promotion Order promulgated pursuant to the Act. The order is available on the AMS’s website. Dairy producers have a strong culture of enforcement of the checkoff program, and the National Dairy Board audits co-ops and other producers to ensure compliance with the Act. More information on activities of the National Dairy Council is available on the Dairy Checkoff website.
- Raw Milk
Raw milk is milk that has not been pasteurized. Some consumers believe raw milk strengthens the immune system, and pasteurization eliminates valuable bacteria and proteins. However, raw milk can be a source of dangerous pathogens such as salmonella, E. coli, and listeria. Although the FDA requires pasteurization of milk sold in interstate commerce, (21 C.F.R. §1240.61) states regulate the sale of raw milk within the state. Illinois law requires pasteurization of milk for human consumption unless the consumer buys the milk on the farm and the milk complies with IDPH’s other regulations (410 ILCS 635/8). The following list summarizes how IDPH interprets this exception for raw milk sales.
1) The farm must have an IDPH dairy farm permit, which is free (410 ILCS 635/5).
2) Consumers must provide their own container for the milk. Dairy farmers can (and should) transfer the raw milk to a bulk tank for cooling and storage, but consumers must provide their own container to be filled in a sanitary fashion with the raw milk from the tank. This is because a bottling operation is a “milk plant,” which is distinct from a “dairy farm" where the animals are kept and milked (410 ILCS 635/3(b)(3) & (1)). The language of the exception does not include “plants,”so IDPH requires all “milk plants” to pasteurize their milk (410 ILCS 635/5).
3) The farm cannot process the raw milk into any raw milk products. This follows the same logic as the previous rule—because processing removes the facility from the definition of a “dairy farm” it no longer qualifies for the exemption. Farmers interested in producing raw milk cheese should be aware that the federal standards of identity allow “alternative pasteurization” process for certain cheeses (21 C.F.R. 1240.61), such as Parmesan (21 C.F.R. 133.165) and Roquefort (21 CFR 133.184). All raw milk cheeses must be aged at least 60 days. Producers must go through the IDPH inspection and permitting process and should expect that the regulators are going to be very particular about ensuring the safety of the product.
4) The IDPH prohibits advertising that raw milk is for sale, including any kind of signage on the premises of the farm indicating the sale of raw milk for human consumption, any announcement on the farm’s website and any other standard forms of advertising. This means all information must be spread by word of mouth. Some consumers post information on online directories to let other raw milk consumers know what farms have raw milk available for purchase. IDPH does not prohibit this so long as the farmers are not affiliated with those directories. The likely rationale for this restriction is that the section of the Act which prohibits the actual sale of raw milk also prohibits “offering for sale” raw milk (410 ILCS 635/8). However, the provision that exempts dairy farms from pasteurizing milk “sold or distributed” on the farm does not exempt “offering for sale.”
Another way producers in other states distribute milk to customers is through a cow-share program, in which consumers sign a contract to purchase a “share” in a cow or herd and pay the farmer to care for and milk the cows. The consumer then receives milk from “their” cow without technically “purchasing” raw milk. This business model has two drawbacks. First, drafting a legally sound contract may be prohibitively difficult or expensive. Second, there is no clear authority on the legality of cow-share programs in Illinois. Although some states recognize and regulate cow-share programs, they have come under attack in several neighboring states. Given their tenuous legal validity and the political and regulatory opposition to raw milk, they may not be an ideal business model for farmers in Illinois.
Selling raw milk exposes the farmers who provide it to potential lawsuits for illnesses. Although there are no recent cases in Illinois concerning liability for illness as a result of drinking contaminated raw milk, farmers should take all precautions possible to make sure the milk is clean in order to protect against liability. This is true regardless of whether the farmer is selling directly to consumers on the farm or is providing milk through a cow share program.
- rBGH Free Labeling
Recombinant Bovine Growth Hormone (rBGH, commercially sold as Posilac) is a genetically engineered hormone that is designed to increase milk production by dairy cattle. Although the FDA has approved the use of the hormone and takes the position that there is no difference between milk from cows treated with rBGH and those not treated with it, many consumers (and therefore retailers) have a strong preference for milk that comes from untreated cattle. To address this consumer demand, some milk producers wish to label their milk as “rBGH free.” Such labels were banned in Illinois in the 1990s; however, Stonyfield Farm, Organic Valley, Ben & Jerry’s, and Whole Foods challenged the Illinois law on First Amendment grounds. In a subsequent out-of-court settlement, the plaintiffs and IDPH agreed that labels could state that the milk is “from cows not treated with artificial growth hormones.” However, labels cannot use the term “rBGH free,” and they must state that the FDA has found no difference between milk from rBGH-treated cows and milk from untreated cows. These rules are consistent with FDA’s national labeling standards. As part of the permitting process for dairy plants, the IDPH evaluates any labeling that the plant will be using, so plants should work with their local permitting authority in order to develop a non-misleading label. Additionally, the Illinois Food, Drug and Cosmetic Act (IFDCA) prohibits “false advertisement” (410 ILCS 620/3.5), which seems to give IDPH authority over a dairy’s advertising. Thus, advertisements will need to be consistent with the agreed upon labeling.
Contacted the Dairy Division of the Illinois Department of Public Health to discuss what is necessary to produce the product you wish to sell?
Followed all steps in the IDPH/PMMPA dairy farm and dairy handler permitting and inspection process?
submitted construction, reconstruction, or alteration plans to IDPH for approval
applied for a permit from IDPH
complied with ongoing IDPH product testing and inspection
Chosen a recordkeeping system for tracking, reporting, and remitting fees for the price and storage reporting and milk checkoff program?
developed labeling and marketing strategies?
Key Contact Information
Illinois Division of Public Health, Division of Foods, Drugs, and Dairies
Ph: 217-785-2439 (main)
Regional office contact search: http://www.idph.state.il.us/local/map.htm
 21 C.F.R. § 240.61 exempts certain cheeses from pasteurization if they are subject to alternative pasteurization procedures that are defined in the cheese’s standard of identity, for instance aged for at least 60 days (21 C.F.R. part 133).
 77 IAC §§ 775.20, 775.30 incorporate and modify the Federal Grade A PMO for all dairy product; 77 IAC 785 subpart C establishes standards for dairy farms; 77 IAC 785 subpart D establishes standards for dairy manufactures; 77 IAC 785 subpart E has additional standards for dry milk products; 77 IAC 785 subpart F has additional standards for butter and similar products; 77 IAC 785 subparts G & H cover manufacturing and packaging of cheeses.
 The exact definition states “a place or premise where one or more cows or goats are kept, and from which a part or all of the milk or milk products are provided, sold or offered for sale to a milk plant, transfer station, or receiving station” (410 ILCS 635/3(b)(1)).
 This is one of the instances where the Illinois definition differs from the Federal Grade A PMO, which defines a “dairy farm” as “any place or premises where one (1) or more lactating animals (cows, goats, sheep, water buffalo, or other hooved mammal) are kept for milking purposes, and from which a part or all of the milk or milk product(s) is provided, sold or offered for sale to a milk plant, receiving station or transfer station” (PMO §1L). Although the Illinois definition only covers cows and goats, it is probably safest to assume the IDPH will still assert jurisdiction and impose the PMO standards on operations raising other animals, such as sheep.
 The Illinois regulations also state that “when ‘plant’ is used in connection with the production, transportation, grading, or use of milk, it means any plant that handles or purchases milk for manufacturing purposes; when used in connection with requirements for plants or licensing of plants, it means only those plants that manufacture dairy products” (77 IAC 785.110).
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