Federal pricing has more classes and exceptions than a sociology department
COLUMBUS, Ohio — The U.S. Department of Agriculture announced that the November Class I base milk price rose $1.39 to $20.27 per hundredweight, a development dairy farmers celebrated for roughly the length of time it took to open their actual milk checks.
November Class I Base Price Reaches $20.27
The Class I base price is the starting point for what processors pay for milk that ends up in the jug. It is announced monthly and published by the USDA Agricultural Marketing Service Federal Milk Marketing Order program, and the current figures are posted along with price announcements and class definitions. A $1.39 increase is good news by any reading, and farmers said so, several times, before the mail came.
What the base price becomes by the time it reaches a producer depends on a long list of adjustments. Location differentials apply. Component values apply. Class prices for cheese, butter, nonfat dry milk and whey apply, along with pooling rules, handler obligations and marketing deductions. The number in the headline is where the story starts. It is almost never where the story ends.
Why Federal Milk Pricing Confuses Farmers
Federal milk pricing divides milk into classes based on how it’s used, then calculates a blend price that reflects the mix. Fluid milk is Class I. Soft products are Class II. Cheese is Class III. Butter and powder are Class IV. Each has its own formula. The blend price is where they meet.
What Happens Between the Announcement and the Check
“I saw twenty-seven cents and I got excited,” said Glenn Whitaker, who milks 220 cows near Wooster, Ohio. “Then I saw the actual number on my statement, and I got a different kind of excited.”
Whitaker said he’d taken a few hours to follow the math on his check and eventually found where each piece went. He said every piece was legitimate and documented. He said he’d just never expected so many pieces.
Fine Print: The Milk Check Statement
A copy of a recent milk check statement, shared with permission, shows the base price, a component adjustment, a hauling charge, a cooperative assessment, a promotion deduction, a quality premium, a volume adjustment and a line labeled simply “Other.” A footnote reads:
Net payment reflects applicable adjustments, deductions and credits as determined by plan. Producers with questions regarding any line item are encouraged to review the explanation of line items, available upon request.
Whitaker said he requested the explanation of line items and received a seven-page document. He said it was clear. He said he understood each line individually. He added that he still couldn’t have told anyone, by the end, what the check was for.
Transcript: A Call to the Market Administrator’s Office
A producer in Pennsylvania recorded a call to the office of a federal milk market administrator, with the administrator’s knowledge, and shared a portion with reporters. In it, the producer asks a clear question:
Producer: So if the Class I price went up, why did my check go down?
Administrator: It depends.
Producer: On what?
Administrator: A number of factors.
Producer: Can you name one?
Administrator: Sure. Do you have about forty minutes?
The producer said he did, then asked for a quick version. The administrator said there wasn’t one. The producer said that was fair, and that he appreciated the honesty.
Dairy Economist: “It Is a Rational System”
A dairy economist who teaches federal order pricing said the system is logically consistent, carefully designed and a reasonable response to the problem it was built to solve.
“Every part of it makes sense,” the economist said. “It’s a rational system. The difficulty is that each rational part sits on top of another rational part, and by the time you reach the producer, you have a very rational pile. I’d say it’s like a house built entirely of correct decisions. You’d still want a map.”
The Iowa State University Extension dairy resources offer explainers on milk pricing and are widely used by producers trying to read their statements.
What Farmers Want in a Simpler Milk Pricing System
Producers asked for a pricing system they could explain to a family member over dinner. Several said they’d settle for one they could explain to themselves. One said he’d happily accept a system that was complicated, provided the check matched the announcement.
Government officials said the current structure reflects decades of negotiation among producers, processors and regulators, and that changes would require broad agreement. They added that the system “is perfectly understandable” to anyone who has studied it, and several farmers said that was precisely the problem: you had to study it. They’re busy. They’ve got cows.
Five Humorous Observations on the Milk Check
- Twenty dollars and twenty-seven cents. I read that and I thought, “Finally.” Then I opened the envelope and thought, “Where’s the rest of it?” It’s like a restaurant that promises a steak and sends a very detailed receipt.
- “Other.” There’s a line on my check that says “Other.” Other what? Other people? Other cows? Other states? It’s the only line that’s honest. It means somebody took something and didn’t feel like naming it.
- Forty minutes. The administrator said it would take forty minutes to explain it. I’ve sat through shorter divorces.
- It’s a rational system. Sure. So is a haunted house. Every door leads somewhere, there’s a reason for each room, and you still come out the back screaming.
- I need a map to read my own paycheck. You know who else needs a map? Tourists. I’m a lifelong resident.
Last Updated on November 4, 2026 by Alan Nafzger