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Alternative Milk Pricing Programs

Dairyman's Cooperative Creamery Association, Tulare, CA 93274

ABSTRACT

This paper discusses the potential impact of pricing alternatives on a selected group of producers that were classified according to size, management ability, and feeding program. California currently prices milk based on its fat and solids-not-fat content. Other pricing programs included the Minnesota-Wisconsin price series, a protein pricing program, a milk fat-skim pricing program, and a cheese formula. If the pricing program were changed, it would benefit some producers and not others. Producers with large milk volumes would gain if a milk fat-skim pricing program, were used in place of a milk fat and solids-not-fat pricing program. Producers with small volumes of milk would gain if a protein pricing program were used. Excellent managers would prefer a milk fat-skim program, and poor managers would prefer a protein pricing program. To change the current California pricing program would make little sense unless it were changed to a cheese formula to provide incentive to producers to produce milk with a high cheese yield and to encourage the whole industry to manufacture more cheese and less butter and powder.

This article has been cited by other articles:

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