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Stephenson explains that negative producer price differentials this year came from very high protein prices, which reached record levels in June and July. Protein values are calculated from cheese prices, and butterfat prices have been lower than in recent years.
The result is high Class III values relative to other classes.
High cheese-driven protein values raise the Class III price and distort federal order pool payments. This reflects existing strength in dairy markets rather than a new shock.
hoards.comMark Stephenson, CenterOct 8, 2020Not 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.
