More Negative PPDs and De-Pooling Reignite Federal Milk Marketing Order Debate

The price of Class III milk (milk used to produce cheese) rose to near-record highs in 2020 on the back of increased cheese demand, tighter cheese supplies and USDA’s Farmers to Families Food Box Program. Meanwhile, the price of Class IV milk (milk used to produce butter and dry milk powders) remained at multi-year lows due to COVID-19-related market disruptions and price volatility. As a result, the difference between the Class III milk price and other prices of milk rose to record-highs. In June, 2020, the Class III milk price was more than $9.60 per hundredweight higher than the base Class I milk price. Similarly, in July, the price difference between Class III and IV rose to nearly $11 per hundredweight. Source

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