Recent changes in dairy industry structure and policy have brought the role of cooperatives into question. Analysis of milk marketing institutions and their association with cooperative marketing functions sheds light the interdependency of government involvement in milk marketing. We examine the role of cooperatives to determine whether cooperative market power can substitute for public policy power. The ability of cooperatives to maintain membership and balancing services depends critically on the dairy policies in place today. In absence of milk marketing orders, we find it likely that cooperatives will be unable to maintain these services.