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SW Wisconsin | I think I can roughly explain how it's calculated:
4 classes of milk are priced according to different formulas. Each milk marketing region has a default class according to which all milk in that region is priced. The FMMA then adds up what the milk in the region was actually used for, calculates the value as though priced according to the relevant formula for that product type, and subtracts the value of the milk according to the region default formula. Divide by the pounds of milk produced in the month, and that's the PPD. There is also an adjustment according to how far from the primary city in the region the milk plant is, and some accounting for rehydrated powdered milk, if I recall correctly.
The system was originally implemented, as far as I can tell, to ensure abundant, cheap fluid milk: if processors put milk into cheaper fluid use it drives the PPD down. It's a ridiculous, outdated system, specifically designed to draw milk away from higher value uses. | |
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Dairy Producers, here we go again
