Farm Bureau Chief Economist Roger Cryan testified on behalf of the group’s membership at the Federal Milk Marketing Order Pricing Formula hearing. His testimony underscored the need for updating Class 1 and Class 2 price differentials to bring fairness for farmers back into the Federal Milk Marketing Orders.
Class 1 differentials are meant to incentivize the movement of milk to where it’s demanded and assist in maintaining regional production capacity in a manner that provides consumers with consistent access to fresh milk. The Class 2 differential is meant to represent the higher value of Class 2 milk, which is used in dairy products like ice cream, cottage cheese, and sour cream, while Class 4 milk is used in butter and dairy products.
“Our proposal is the reduction or elimination of negative producer price differentials and the de-pooling they cause,” Cryan said in his testimony. “An orderly pool is key for orderly marketing.”