Revisiting Record-Large Negative PPDs on Milk Checks | American Farm Bureau Federation

“Milk pricing in the U.S. is incredibly complicated. One particular feature of milk pricing that always seems to rub dairy farmers the wrong way is negative producer price differentials – a line item on the dairy farmer’s milk check that reduces the mailbox milk price. Negative PPDs occur when the classified value of milk in the Federal Milk Marketing Order pool is less than the component value of milk, resulting in a reduced minimum regulated milk price. In June 2020, negative PPDs across the U.S. were expected to be record large because of COVID-19-related price volatility, a recent change to FMMO milk pricing formulas in the 2018 farm bill, and mass de-pooling of milk, i.e., Negative PPDs to Offset Milk Price Rally.”

John Newton, Ph.D. of American Farm Bureau Federation writes about how FMMO reform is long overdue, but even more overdue is giving farmers a say in how their milk is priced and pooled. Read the full article on Revisiting Record-Large Negative PPDs on Milk Checks at American Farm Bureau Federation’s website.