# October bringing negative PPDs; cow slaughter falls - Progressive Dairy | Ag Proud

> The USDA set the October 2020 Federal Milk Marketing Order Class I base price at $15.20/cwt, down more than $3 from September. Dairy cow slaughter hit a four-year low in August. Rising block cheddar prices from a USDA food box purchase approval are creating the potential for depooling and negative producer price differentials in October.

- Date: 2020-09-28 · published 2020-09-28T12:00:00.000Z
- Category: report · region US · magnitude medium
- Page: https://feedsoft.ai/events/51261-october-bringing-negative-ppds-cow-slaughter-falls-progressive-dairy-ag-proud
- Commodities: [Milk (Class III)](https://feedsoft.ai/c/MILK.md)

## Why it matters

Lower Class I pricing and a cheese-driven rally in Class III futures shift milk value between classes and regions. Tighter cow slaughter supports milk supply and feed demand over the coming months.

## Read by commodity

- MILK: neutral

## Linked price moves

| Commodity | Date | Window | Change % | z-score | Why linked |
| --- | --- | --- | --- | --- | --- |
| MILK | 2020-09-29 | 1 | +19.4% | 5.0 | USDA food box purchase approval lifted block cheddar prices and raised depooling and negative PPD risk, a demand-driven bullish factor for Class III futures. |
| MILK | 2020-10-04 | 5 | +26.2% | 2.8 | Rising block cheddar prices tied to the USDA food box purchase approval point to a demand-driven cheese rally and depooling, which tightens milk supply to Class III and supports futures. |

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| MILK | 2021-10-15 | [September FMMO numbers follow summer trends - Progressive Dairy \| Ag Proud](https://feedsoft.ai/events/44536-september-fmmo-numbers-follow-summer-trends-progressive-dairy-ag-proud.md) | -0.1% | +1.5% |
| MILK | 2019-05-07 | [Digging deeper into 2018 milk supply and demand numbers - Progressive Dairy \| Ag Proud](https://feedsoft.ai/events/59081-digging-deeper-into-2018-milk-supply-and-demand-numbers-progressive-dairy-ag.md) | -1.2% | -0.7% |
| MILK | 2018-05-24 | [2017 milk value fell short of expectations - Progressive Dairy \| Ag Proud](https://feedsoft.ai/events/65018-2017-milk-value-fell-short-of-expectations-progressive-dairy-ag-proud.md) | +2.2% | +0.1% |
| MILK | 2021-04-14 | [March negative PPDs continue to climb out of 2020 depths \| Ag Proud](https://feedsoft.ai/events/47769-march-negative-ppds-continue-to-climb-out-of-2020-depths-ag-proud.md) | +0.5% | +7.3% |
| MILK | 2019-07-01 | [Mailbox milk prices: What do they tell us? - Progressive Dairy \| Ag Proud](https://feedsoft.ai/events/4203-mailbox-milk-prices-what-do-they-tell-us-progressive-dairy-ag-proud.md) | +6.5% | +7.4% |

## Sources

- agproud.com: https://www.agproud.com/articles/36361-october-bringing-negative-ppds-cow-slaughter-falls

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Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.