Elimination of advanced pricing necessary to modernise marketing orders - AFBF

 The testimony focuses on removing Class I and Class II milk from the advanced pricing formula used by dairy processors when calculating the price paid to farmers for their milk. Class I milk is used for beverages while Class II milk is used for foods like ice cream, cottage cheese and sour cream.

According to AFBF data presented at the hearing, advanced pricing has disrupted the orderly marketing of milk and led to unfair marketing conditions for dairy farmers. This disruption is caused when the price of other classes of milk rises above the announced advanced price of Class I and Class II milk. A full explanation of advanced pricing is available via Market Intel.

AFBF has previously testified on adding 640-pound cheddar cheese blocks and unsalted butter to the price survey used in Class price calculations, in support of member policy to include more products in the price calculations. AFBF also supports several proposals by the National Milk Producers Federation, which would increase Class I prices, drop barrel cheese from the Class III price formula, and return to the “higher-of” Class I formula.

Below are excerpts from the testimony, which can be read in full here.