A dairy economist says to find a solution to milk pricing issues and the negative Producer Price Differentials, everyone must first understand the problem. University of Minnesota Dairy Economist Marin Bozic tells Brownfield rigidities within the Federal Milk Marketing Orders exposed producers to a Class Four risk they didn’t know they had in 2020.
Bozic says milk pricing should follow some basic tenants. “The value of your milk should reflect the value of the products made with your milk, so if you’re shipping to a cheese plant and the cheese price goes higher, then some of that value should stay with the processor as a reward for doing a good job in selling their cheese and some of that value should go to the producer for doing a good job in making a wholesome milk.”
Bozic says a dairy producer task force has been discussing different ideas to improve the milk pricing formula.