Milk Prices 

Throughout the last few years, the dairy industry has experienced major changes and pressures from prices to herd sizes and productivity. Changes to the Federal Milk Marketing Orders took effect June 1st, making a massive overhaul to the complex system that prices milk nationwide. At the time this article was written, the changes to the FMMO system were not in effect.

There are three important prices to look at regarding milk: mailbox price, the all-milk price, and the Class III Futures price.

The mailbox milk price and all-milk price are both estimated by the USDA. The mailbox milk price is the estimated price farmers receive for milk minus any deductions to market that milk. The all-milk price is the gross price farmers receive based on an average fat test. The all-milk price does not account for deductions such as co-op dues and promotion costs; however, premiums and discounts for quality and quantity are included in the estimated price.

The Class III Futures price is the primary futures price for milk, and...