MADISON, Wis. — Five of the seven updates to pricing formulas in Federal Milk Marketing Orders were implemented June 1, and producers are now seeing the effects on their milk checks. For many in the Upper Midwest, the mailbox price has been smaller than the pre-order changes.
This is largely due to increases in make allowances — variables in the milk pricing formula that represent costs incurred by processors to convert raw milk into dairy products like cheese, butter, nonfat dry milk and whey. Depending on the product, increases ranged from 5-7 cents per pound and now stand at 23-27 cents per pound.
The increases, reflected in prices for Class III and Class IV milk, add up, especially for producers in the Upper Midwest, Central and Mideast FMMOs, which are heavy with cheese plants. Analysis conducted during the FMMO hearings in 2023 and 2024 suggested price decreases of up to $0.90 per cwt., amounts that have indeed been realized…