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The California Experience in Component Pricing

Dairyman's Cooperative Creamery Association, Tulare, CA 93274

ABSTRACT

This paper discusses reasons for component pricing, why it has been considered successful in California, and how it relates milk fat and solids-not-fat to production characteristics. California has used component pricing since 1962 to increase standards for fat and solids-not-fat in fluid milk products, to make returns to dairymen more equitable, to achieve greater plant control, and to improve feeding efficiency. The use of component pricing and the higher standards in California resulted in more fat and solids-not-fat usage in Class I milk than would have been true with national standards. California per capita consumption of fluid products increased since 1972 and is higher than the national average. Component pricing has not stifled efficiency.

The relationship between solids-not-fat and milk fat is reaffirmed but pad feeding may lower percentages of solids-not-fat and raise milk production per cow.