The Agriculture Department will delay implementation of a new dairy pricing system at least until early next year while judges consider court challenges.

A federal judge in Vermont blocked the USDA on Oct. 1 from putting the new policy into effect. Court hearings are scheduled in December in both the Vermont case and a separate set of lawsuits being considered by a judge in Washington.

"Even if all the court decisions were in the department's favor, it wouldn't take effect until next year," Kathleen Merrigan, administrator of the USDA's Agricultural Marketing Service, said yesterday.

The USDA plan, intended to narrow regional disparities in pricing, is supported by consumer groups and farmers in the upper Midwest but opposed by producers elsewhere because they fear they would lose money.

The House voted overwhelmingly in September for an alternative plan that is closer to the existing system. The Senate has taken no action, and the Clinton administration has threatened to veto the House-passed version.

Under the existing system, guaranteed minimum prices for fluid milk are lowest in the upper Midwest and highest in the South and West, depending on their distance from Eau Claire, Wis.

New England states have a separate system for determining what farmers in that region are paid for milk. It was to have ended Oct. 1 but will remain in effect at least until the USDA plan is overhauled.