Dairy Market Update
Milk prices have come down significantly from higher prices levels in 2022. Three prices to look at when evaluating milk prices are the mailbox price, the all-milk price, and the Class III Futures price.
The mailbox milk price is estimated by USDA. The price is the estimated net price farmers receive for milk including all related premiums and costs. Premiums include premiums for components, quality, and distributions of corporate earnings as well as other factors. Payments include things like hauling, marketing deductions, cooperative dues, quantity discounts, and National Promotion program dues as well as other factors.
The all-milk price is also estimated by USDA. The price represents the gross price farmers receive based on an average fat test. Not all premiums and deductions are included. Notably, hauling, advertising/promotion, and coops dues are not included. Premiums and discounts for quality and quantity are included in the calculated price.
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