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Record-high butter prices are distorting the Federal Milk Marketing Order Class III formula, which raises the cheese-based milk price by 10 cents per cwt for every 25 cents butter rises. Cheesemakers are therefore struggling to pay Class III prices and need to reblend when butter is high.
The formula quirk means cheesemakers face higher milk pay prices even when cheese values are flat, pressuring margins and reblending decisions that affect milk and dairy product flows.
hoards.comCorey GeigerDec 26, 2022Not enough comparable past events yet for a historical read.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
