◂ Event Timeline

Nov 5, 2020POLICYUS

Change in Class I milk pricing proves costly

A change made in May 2019 to the Class I skim milk mover, setting it at the average of Class III and Class IV plus 74 cents/cwt, backfired in 2020 as Class III prices rose sharply on government cheese purchases for food boxes. From May 2019 to June 2020 producers gained about $29 million from the change.

NMPF's Peter Vitaliano discussed the issue at a virtual town hall.

WHY IT MATTERS

The pricing formula change is a technical milk-pricing issue with little direct effect on feed grain or meal prices, so its impact on feed markets is minor.

AFFECTSMilk (Class III)

SOURCE
capitalpress.comStaff ReportsNov 5, 2020

Price reaction & history

Milk (Class III)no directional readSO FAR1d -0.8%5d -1.1%20d -35.4%

After 147 past policy events, Milk (Class III) moved a median -0.1% over 5 sessions (46% higher; middle half -1.0% to +0.6%), and -0.2% over 20.

May 31, 2022Dairy group seeks clarification on milk pricing changes | Capital Press-2.9%
Apr 6, 2021Dairy group wants inclusive discussions on milk pricing | Capital Press+1.5%
Apr 20, 2021Industry mulls improvements to milk marketing orders | Capital Press-0.1%
Apr 10, 2018USDA: California milk prices higher in federal system | Capital Press-0.3%
May 6, 2021Dairy farmer groups propose Class III Plus for better milk pricing-0.4%

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.

Milk (Class III) MILK · GP ▸

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