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An article on Federal Milk Marketing Order make allowances, the assumed processing costs used in milk pricing formulas, says these allowances have not changed in 17 years despite rising costs. The industry is working to update them.
The article notes that higher make allowances lower the minimum milk prices farmers receive.
Raising make allowances would lower the regulated minimum milk price, so farm milk income is at stake in the rulemaking. Any change would be a structural shift in how milk prices are calculated.
dairyprocessing.comNate DonnayNov 28, 2023After 24 past bearish policy events, Milk (Class III) moved a median -0.1% over 5 sessions (33% higher; middle half -1.8% to +0.5%), and -4.6% over 20.
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.
