The American Farm Bureau Federation began presenting its case for changes to the Federal Milk Marketing orders. Hearings began last week in Carmel, Indiana. On Monday, AFBF chief economist Roger Cryan was the first Farm Bureau official to testify. He discussed the bureau’s support for revising the component values in the Class III and Class IV skim price formulas.
Farm Bureau officials contend revising those formulas will create a more accurate pricing model. The AFBF proposal aligns with the National Milk Producers Federation’ plan, which would also incorporate updated component values into the Class III and IV price formulas.
“Adjusting these values will more accurately define the market value of skim milk used in the skim/butterfat markets and in Class I in all markets,” Cryan says. “In component markets, it will ensure that Class I milk prices reflect at least the national average component value, rather than a low outdated value, which undermines the premium for Class I milk intended by FMMO pricing formulas.”
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