A U.S. Department of Agriculture market administrator establishes each month’s basic minimum milk price paid to the nation’s farmers. In December, the blend price in Maine was $15.06 for each 100 pounds of milk shipped to a processing plant. A year ago, the basic price was $21.59.

In a complex pricing formula, the blend price of milk represents prices for fluid milk besides that used for other products like cheese, butter and ice cream. Processing plants also test each farmer’s milk and payments are adjusted according to butterfat and protein content of the milk.

A state subsidy, which industry leaders call a “safety net,” boosts the total money farmers receive. Small Maine farmers in December were guaranteed $20.70 per hundred pounds of milk; a middle group of farmers, $18.07; and large farmers, $17.29.

The subsidy money comes from the state’s general fund, which also receives revenue from milk handling fees collected from the distribution and retailing process. For 2008, the state subsidy paid to farmers was $4.7 million.