When Brad Feuerhelm, a dairy farmer in Le Mars, Iowa, wanted to go into the dairy business, he turned to the local milk buyer, Wells' Dairy, maker of "Blue Bunny" ice cream. With a mutually agreeable, long-term forward price contract in place, Feuerhelm was able to get a fair, stable price for his milk, avoiding volatile price swings in the market, and obtain favorable financing. While many dairy farmers in Iowa were unable to sustain their dairy operations, Feuerhelm's "Plymouth Dairy" flourished. In 2000, when Congress authorized a Dairy Forward Contracting Pilot Program, many milk sellers and buyers, like Feuerhelm's Plymouth Dairy farm and Wells' Dairy ice cream plant, entered into voluntary and mutually agreeable long-term forward contracts. Today a similar arrangement would be impossible, because the dairy forward contracting authority expired in 2004.

"As a dairy farmer, I contend with the volatility and uncertainty of the dairy industry on a daily basis. There is simply no reason not to implement tools that allow us to plan effectively, manage risk and price fluctuations, and increase efficiency."
- Brad Feuerhelm

In 2002, DairiConcepts became the first U.S. commercial operation producing milk protein concentrates (MPC) in the United States. This 50/50 partnership between the world's top dairy exporter, Fonterra, and the largest U.S. farmer-owned cooperative, Dairy Farmers of America (DFA), combines Fonterra's marketing services and protein technology with DFA's stable supply of high quality fluid milk. The plant was converted from a nonfat dry milk "balancing" plant that sold exclusively to the USDA government purchase program to allow production of dairy products in commercial demand. This plant and another new MPC plant, both in New Mexico, are poised to replace imports during seasonal supply differences between the Northern and Southern Hemisphere to match rapidly growing customer demand. Producing these products without government subsidies or support, the plant has a capacity to capture up to 40% of U.S. domestic MPC demand as well as growing value added export opportunities.

Expanding markets for whey in recent years – including greatly increased exports – serve as a model for industry growth without government intervention. Whey has never been dependent on government purchases under the Milk Price Support Program. Whey is a co-product of cheese production that at one time was thought to have little use in the food industry. Now whey products are valuable ingredients for myriad food processing and industrial purposes, and exports have taken off. In 2005, whey exports represented 40% of all U.S. whey product production. They continue to rise. Increased whey exports have had a positive impact on farmers’ prices. It is no surprise that Minnesota-based Davisco Foods International recently won the Exporter of the Year Award, given by the U.S. Dairy Export Council and Dairy Field magazine. Davisco is the world's largest manufacturer of whey protein ingredients, which are increasingly in demand as ingredients in food, beverage, and pharmaceutical products.

In the Spring of 2006, construction of a regional methane digester began in Cayuga County, NY. The New York State Energy Research and Development Authority and U.S. Department of Agriculture provided $1.5 million to fund the facility, which will use manure from area farms and food processing waste to power several county office buildings. Energy costs are expected to be reduced by about 20 percent for the locations powered by the methane processing facility. This pilot project is an excellent example of how potentially polluting dairy farm wastes can be transformed into something valued by non-farmers in the area. Government payments could be used to create additional incentives for dairy farmers to invest in and/or supply methane digester plants that convert manure into biogas, a renewable fuel that can be used to generate electricity.