An ag economist says the high Class Three milk prices have created an unusual problem leading to lower milk checks for producers. John Newton with American Farm Bureau says producer price differentials or PPD’s have gone negative because Class Three manufacturing milk is currently priced higher than Class One fluid milk and it is part of the Federal Milk Marketing Order accounting rules. Newton tells Brownfield, “The classified value of the milk in the pool is not enough to pay the minimum producer value, so they have to reduce the minimum producer value so you’ve got enough money in the pool to cover it.”
John Newton
Newton says to correct this, the Class One milk price has to get above the component value of the milk, and that might take three months or more to happen.
