The Milk Regulatory Equity Act has been signed into law by President George W. Bush, effectively closing a loophole that had allowed regulatory inequities between federal and state milk marketing orders in Arizona, California and Nevada.

The bill, which passed the US Senate in December and the US House of Representatives late last month, represents a victory for the US dairy industry which had been lobbying for the change in legislation. "We commend the President for signing this piece of legislation," said Chip Kunde, senior vice president of the International Dairy Foods Association (IDFA). "His action today brings this long-fought battle to a close."

IDFA formed part of a nationwide coalition of milk producers and processors who petitioned for the change in the law. The coalition also included the National Milk Producers Federation, the Dairy Institute of California, Western United Dairymen and the Dairy Farmers of America.

The new law makes it illegal for plants in southwestern states to sell milk from a federally regulated milk marketing area into a state milk marketing area, without complying with either state or federal pricing regulations. This means that milk processors in Arizona, including producer-handlers that sell more than 3m pounds of fluid milk per month, will now be required to comply with federal regulations. The legislation also clarifies that plants in Nevada selling into a federal milk marketing area must now abide by federal pricing regulations.