Missouri Dairy Business Update  
Volume 8, Number 3
March 2008

Changes in Milk Pricing for Southern Missouri

The U. S. Department of Agriculture (USDA) has issued an interim order that temporarily adjusts the Class I pricing surface for dairy producers in southern Missouri who ship into the Southeast Federal Milk Marketing Order. See:  http://www.fmmatlanta.com/Historical%20Bulletins/2008/SE03.pdf


Question: What does that mean?

Answer: Class I price differentials in southern Missouri are going to go up May 1 from $0.20 to $0.50 per cwt, depending upon the location of where your milk is pooled.  You can see the list by county at:  http://www.ams.usda.gov/dairy/ap_se_fl/se_app_fl_interim_final_rule.htm


Question: Does this rule do anything else?

Answer: This order amends certain features of the touch-base, diversion limit standards and transportation credit provisions for the Appalachian and Southeast Federal milk marketing orders. According to testimony in the federal register, “In estimating the impact on minimum prices paid to dairy farmers, blend prices will increase by approximately approximately $0.64 per cwt higher for the Southeast order,


Question: How much does the class I price differential vary across the country?


Answer: For a map of the current price differential between Class I or fluid milk and the (higher of Class III or Class IV) milk go to: http://www.fmmatlanta.com/images/National%20Class%20I%20Diff.pdf


Question: What percentage of our milk is considered Class I?


Answer:
For southern Missouri producers within the Southeast Milk Marketing Order, around 55% to 70% of the milk within the SE Order goes for Class I purposes, depending upon the season of the year.


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