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Dairy Facts 2016

USDA to Implement New Class III and IV Price Formulas September 1

Aug 04, 2008

The U.S. Department of Agriculture last week issued an interim final rule amending the Class III and Class IV product price formulas in all federal milk marketing orders as of September 1. Although USDA will continue to accept industry comments through mid-August, the interim rule was rendered on an emergency basis, allowing implementation before it becomes final.

The decision amends the make allowances for cheese, butter, nonfat dry milk and dry whey powder. Specifically, the decision adopts the following make allowances: cheese at $0.2003 per pound, butter at $0.1715 per pound, nonfat dry milk at $0.1678 per pound and dry whey at $0.1991 per pound. The decision also increases the butterfat yield factor in the butterfat price formula to 1.211, up from 1.20.

"This means that the new price formulas contained in the rule will be used for the scheduled August 22 advance price announcement of the Class I butterfat and skim and Class II skim minimum prices for September," said Bob Yonkers, IDFA vice president and chief economist, "as well as for the scheduled October 3 announcement of the other September minimum class prices."

IDFA views the interim rule, previously issued as a "tentative partial final decision," as further evidence that the Federal Milk Marketing Order system must be reformed.

"This decision brings some relief but less than we need, because it comes nearly 22 months after USDA first requested proposals for this hearing process," said Connie Tipton, IDFA president and CEO.

The deadline for comments regarding the interim rule is August 19. IDFA plans to file comments and urges members to do the same. Once USDA reviews the comments, it will issue a final decision.

For more information, members may contact Yonkers at or 202-220-3511.


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