Component levels are growing in every Federal Order. Butterfat levels are growing twice as fast as protein levels. Data in this post are based on 12-Month moving averages to reduce annual volatility. Higher component levels translate to higher revenue per cwt. of milk.
BUTERFAT
Table I shows the current butterfat levels for every Federal Order. All 11 Federal Orders are paid for butterfat. The four Orders paid on the advanced system have the lowest butterfat levels averaging 3.94%. The Northwest continues to hold the top spot with butterfat levels of 4.39%. The other seven Orders paid on the Class and Component system range from 4.17% to 4.28%. All Orders combined are averaging 4.21% butterfat.

The increase in butterfat per cwt. has a consistent increase as shown in Chart I. That indicates the trend will likely continue.
Some of the Federal Orders are increasing butterfat levels faster than others. Table II compares the four largest Federal Order’s growth in percent butterfat. All four are increasing butterfat levels significantly. The Southwest was the only Order above 4% in 2019. Now all Class and Component Federal Orders average over 4% butterfat. The Southwest Order has a smaller increase over the last five-years but remains as one of the highest butterfat levels of any Order.
The Florida and Appalachian Federal Orders have the lowest butterfat levels and are increasing butterfat slower than average at just .25% over five-years.
Below are four charts plotting the gains of the four largest Federal Orders. Most have very consistent gains. The Southwest is unique in seeing very little improvement in 2023 but is currently quickly catching up. The Southwest Order milk per cow numbers covered in the prior post had a similar Profile.
PROTEIN
Gains in protein levels (Table III) are much smaller than the butterfat gains, increasing over five years at .14% overall compared to .31% for butterfat. However, the overall gains have been steady as shown in Chart VI.
Only Class III milk for cheese pays specifically for protein. The gains of the largest Federal Orders below are all steady except for the Southwest which is again showing issues in 2023 with significant gains in 2024.
SUMMARY
What’s important for increasing producer revenue? Clearly, butterfat levels are the biggest target for increasing producer revenue. With changes soon to be implemented in the formulas for pricing producer milk, producer revenue will decrease, and producers will need to make changes to just break even. (See the prior post for details on the changing USDA pricing formulas.)
Increasing butterfat should be one of the highest priorities for producers. Increasing butterfat, protein, and milk per cow all contribute to increased revenue.
For Federal Orders like the Upper Midwest, where most of the milk goes to cheese, more protein is necessary to match the increases in butterfat. Cheesemakers should be assisting producers in increasing both butterfat and protein in the Upper Midwest.