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  • Updated

While much is still unknown about what tax changes may or may not be included in any Congressional tax legislation this year, it appears most of the scary stuff for farmers is off the table as the country heads toward Halloween.

  • Updated

Since the 2018 farm bill, the price for Class I milk – milk used to produce beverage milk products – has been calculated using the simple average of advanced Class III – cheese – and Class IV – milk powders – skim-milk prices plus 74 cents. In years prior the formula was the greater of advanced Class III and Class IV skim-milk prices. The change was made at the request of dairy-industry stakeholders and was intended to improve risk-management opportunities for beverage milk. COVID-19-induced volatility combined with the 2018-farm-bill formula change resulted in hundreds of millions of dollars in Class I-pool revenue losses, renewing industry discussions regarding optimal Class I pricing methods. Dairy farmers are curious about how the multiple circulating proposals of Class I formula options differ and how they would each impact Class I revenues. This Market Intel analyzes three alternatives to the current Class I pricing calculation and their associated revenue impacts for dairy farmers supplying the Class I marketplace.