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  • Producers are Making Money with $22.05 per cwt.

Producers are Making Money with $22.05 per cwt.

Producers are Making Money with $22.05 per cwt.

The August 18 post covered the pricing trends of the commodities used to price produce milk.  The Agricultural Marketing Service (AMS) calculates and publishes data for all Classes of milk.  For Class III, the largest Class, the protein value is calculated as an index based on 3.0% and butterfat is based on 3.5% in total milk.  The resulting Class prices are quoted in many published articles. The 2024 YTD actual levels of milk protein and butterfat are 3.3% and 4.2%.

 

The Agricultural Marketing Service (AMS) calculates and publishes data for all Classes of milk.  For Class III, the largest Class, the protein value is calculated based on 3.0% and butterfat is based on 3.5%.  The resulting Class III prices are quoted in many published articles. The 2024 YTD actual levels of milk protein and butterfat are 3.3% and 4.2%.   

 

 

The actual percent varies within each Federal Order and each herd.  In 2024, the actual milk protein levels have varied from 3.2% to 3.40% within the Federal Orders and butterfat has varied from 3.9% to 4.4%. Herd level data is not available, but the variance would be much wider.

 

This post will compare the producer revenue based on actual component levels and the AMS index prices used currently (the USDA has proposed changing many of the formulas).

 

 

This post will compare the producer revenue based on actual component levels and the current AMS index prices (the USDA has proposed changing many of the formulas).

 

Chart I plots the AMS values based on the current formulas.  Over the last three years, butterfat prices have increased significantly, and milk protein prices have dropped.  (See this post for a review of the pricing formulas.)  The values in Chart I are based on 3% protein and 3.5% butterfat.  The current spread between the value of butterfat and milk protein is a huge $5.21 per cwt.  These are indexes and no one is paid by these values.  They represent the movement of commodity prices with a constant level of components

Chart I - AMS Index Prices for Butterfat and Milk Protein

Chart II lists the real average butterfat and protein values based on the most recent component levels.  The spread between butterfat revenue and milk protein revenue per cwt. is $6.87.   Clearly, butterfat alone is keeping producer milk prices at reasonable levels.  Butterfat provides nearly 200% more revenue in Class III milk than milk protein.  Butterfat is paid in all Classes of milk and all Federal Orders.

Chart II - Producer Revenue Based on Actual Component Levels

The final chart in this post compares the Class III prices based on the AMS index value and the actual producer revenue.  The most important number on the chart is the current Class III actual prices based on actual component levels (the blue line).  The average actual Class III revenue is currently $22.05 per cwt.  The AMS Class III value is $19.87 per cwt.  

This chart shows the increasing spread between the index price and the actual price as component levels have increased.  The current spread is $2.18 per cwt.
Chart III - Class III Prices at Index Formulas and Actual Component Levels
SUMMARY
 
Once again, the same conclusion is reached.  If producers want to stay in business, they need to make higher component levels a priority.  Butterfat is really keeping milk prices at reasonable levels.  The risk is,  how long butterfat prices will remain at record highs?  Enhancing protein levels improves revenue and provides a more balanced revenue as component prices vary.

130 Responses

  59. А кто-нибудь знает, какие товары они чаще всего доставляют?
    Есть ли ограничения?
    Спасибо за совет! Попробую связаться
    с ними, может, получится сэкономить на закупках

    https://femocargo.ru/

    Reply

  83. Everything published made a lot of sense. However, think on this, what if you were to create a killer post title?
    I mean, I don’t want to tell you how to run your
    website, however suppose you added a headline that
    makes people desire more? I mean Producers
    are Making Money with $22.05 per cwt. – Milk Pay is a little vanilla.
    You could glance at Yahoo’s front page and watch how they create article
    titles to get people to open the links. You might add a related video or a
    related pic or two to grab readers interested about what you’ve written. Just my opinion, it would make your
    posts a little bit more interesting.

    Reply

  95. Здравствуйте!
    Когда заблокировали KRAKEN — держите свежий линк ??
    KRAKEN
    С любого устройства.
    Если основное зеркало недоступно — вот запасной вариант: https://kristi.su/threads/37
    Добавьте в закладки.

    Reply

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The August 18 post covered the pricing trends of the commodities used to price produce milk.  The Agricultural Marketing Service (AMS) calculates and publishes data for all Classes of milk.  For Class III, the largest Class, the protein value is calculated as an index based on 3.0% and butterfat is based on 3.5% in total milk.  The resulting Class prices are quoted in many published articles. The 2024 YTD actual levels of milk protein and butterfat are 3.3% and 4.2%.

 

The Agricultural Marketing Service (AMS) calculates and publishes data for all Classes of milk.  For Class III, the largest Class, the protein value is calculated based on 3.0% and butterfat is based on 3.5%.  The resulting Class III prices are quoted in many published articles. The 2024 YTD actual levels of milk protein and butterfat are 3.3% and 4.2%.   

 

 

The actual percent varies within each Federal Order and each herd.  In 2024, the actual milk protein levels have varied from 3.2% to 3.40% within the Federal Orders and butterfat has varied from 3.9% to 4.4%. Herd level data is not available, but the variance would be much wider.

 

This post will compare the producer revenue based on actual component levels and the AMS index prices used currently (the USDA has proposed changing many of the formulas).

 

 

This post will compare the producer revenue based on actual component levels and the current AMS index prices (the USDA has proposed changing many of the formulas).

 

Chart I plots the AMS values based on the current formulas.  Over the last three years, butterfat prices have increased significantly, and milk protein prices have dropped.  (See this post for a review of the pricing formulas.)  The values in Chart I are based on 3% protein and 3.5% butterfat.  The current spread between the value of butterfat and milk protein is a huge $5.21 per cwt.  These are indexes and no one is paid by these values.  They represent the movement of commodity prices with a constant level of components

Chart I - AMS Index Prices for Butterfat and Milk Protein

Chart II lists the real average butterfat and protein values based on the most recent component levels.  The spread between butterfat revenue and milk protein revenue per cwt. is $6.87.   Clearly, butterfat alone is keeping producer milk prices at reasonable levels.  Butterfat provides nearly 200% more revenue in Class III milk than milk protein.  Butterfat is paid in all Classes of milk and all Federal Orders.

Chart II - Producer Revenue Based on Actual Component Levels

The final chart in this post compares the Class III prices based on the AMS index value and the actual producer revenue.  The most important number on the chart is the current Class III actual prices based on actual component levels (the blue line).  The average actual Class III revenue is currently $22.05 per cwt.  The AMS Class III value is $19.87 per cwt.  

This chart shows the increasing spread between the index price and the actual price as component levels have increased.  The current spread is $2.18 per cwt.
Chart III - Class III Prices at Index Formulas and Actual Component Levels
SUMMARY
 
Once again, the same conclusion is reached.  If producers want to stay in business, they need to make higher component levels a priority.  Butterfat is really keeping milk prices at reasonable levels.  The risk is,  how long butterfat prices will remain at record highs?  Enhancing protein levels improves revenue and provides a more balanced revenue as component prices vary.

130 Responses

  59. А кто-нибудь знает, какие товары они чаще всего доставляют?
    Есть ли ограничения?
    Спасибо за совет! Попробую связаться
    с ними, может, получится сэкономить на закупках

    https://femocargo.ru/

    Reply

  83. Everything published made a lot of sense. However, think on this, what if you were to create a killer post title?
    I mean, I don’t want to tell you how to run your
    website, however suppose you added a headline that
    makes people desire more? I mean Producers
    are Making Money with $22.05 per cwt. – Milk Pay is a little vanilla.
    You could glance at Yahoo’s front page and watch how they create article
    titles to get people to open the links. You might add a related video or a
    related pic or two to grab readers interested about what you’ve written. Just my opinion, it would make your
    posts a little bit more interesting.

    Reply

  95. Здравствуйте!
    Когда заблокировали KRAKEN — держите свежий линк ??
    KRAKEN
    С любого устройства.
    Если основное зеркало недоступно — вот запасной вариант: https://kristi.su/threads/37
    Добавьте в закладки.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

Subscribe via email

Get new posts by email:

This field is for validation purposes and should be left unchanged.

Cheese

Dry Whey

Cash prices - Butter / Cheese

FMMO Price Announcements

Resources

Blog Archive

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About MilkPay

We determine the economic impact of balancing amino acids in dairy rations. This enables you to view personalized results including: Income Data, Milk Per Cow/ Per Day, Economic Growth and overall value calculations updated automatically based on current FMMO prices.

Facebook X-twitter Linkedin

Our Products

Quick Links

Don't Hesitate To Contact Us

4501 North Point Pkwy,
Suite 200 Alpharetta, GA 30022

MilkPay@adisseo.com

About Milk Pay

We determine the economic impact of balancing amino acids in dairy rations. This enables you to view personalized results including: Income Data, Milk Per Cow/ Per Day, Economic Growth and overall value calculations updated automatically based on current FMMO prices.

Facebook Twitter Linkedin

Our Products

Quick Links

Don't Hesitate To Contact Us

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4400 North Point Pkwy,
Alpharetta, GA 30022

info@adisseo.com

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