Milk Pricing

I have been sitting in front of the computer screen all morning trying to determine just how the Federal Order for minimum milk Pricing for Multiple Component Pricing is figured.

I am going blind and I honestly think I should have paid closer attention in Math classes back in my high school years! It’s full of riddles and complex algorithms that are complicated to understand the language…but I am trying to work my way through them.

I really want to understand just how premium payments are derived, where they are based from and how I can utilize that knowledge on our farm. This is going to be a work in progress I think but something that in the long run will be extremely beneficial.

I should leave this heavy mathematical thinking to Mr. Farmer, since he just reads the information and does the math in his head like some human fricking calculator. You have no idea how annoying that is. Especially when he can’t explain in a normal, teacher like language that I can understand how he came up with the answer.

So, here I sit in front of the computer screen. Reading and rereading jargon like this:

Protein price.

The protein price per pound, rounded to the
nearest one-hundredth cent, shall be computed as follows:
(1) Compute a weighted average of the amounts described in
paragraphs (n)(1)(i) and (ii) of this section:
(i) The U.S. average NASS survey price for 40-lb. block cheese
reported by the Department for the month; and
(ii) The U.S. average NASS survey price for 500-pound barrel
cheddar cheese (38 percent moisture) reported by the Department for
the month plus 3 cents;
(2) Subtract 20.03 cents from the price computed pursuant to
paragraph (n)(1) of this section and multiply the result by 1.383;
(3) Add to the amount computed pursuant to paragraph (n)(2) of
this section an amount computed as follows:
(i) Subtract 20.03 cents from the price computed pursuant to
paragraph (n)(1) of this section and multiply the result by 1.572;
and
(ii) Subtract the butterfat price computed pursuant to
paragraph (l) of this section and multiplied by 0.9 from the amount
computed pursuant to paragraph (n)(3)(i) of this section; and
(iii) Multiply the amount computed pursuant to paragraph
(n)(3)(ii) of this section by 1.17.

Um, alrighty then…in normal english please! Does anyone have some type of translator for math equations? I could really use one right now!

Well, I guess there is nothing better to do than plow snow and learn how to do high school math! Hope you are all having a better day than I am!

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2 thoughts on “Milk Pricing”

    1. Oh, this figuring has nothing to do with subsidies. It is more a federal order of what payments by a “milk pool” has to make on the classes and components of milk. It’s all based off commodity trading within the market. I don’t even want to get into trying to figure any types of subsidy. I couldn’t even imagine.

      Nice article. I hope that maybe somewhere out there in the world a few of the “foodie” people are reading some of these pages to understand that it almost takes an mathematician to do some of these figures. And, that if we get lax and don’t understand where our payments come from and how they are derived, then we don’t have the full grasp or concept of our payment structures.

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