Federal Milk Order Price Information Price Formulas
 2002
Note: Milk prices are per 100 pounds or
cwt., rounded to the nearest cent.
Component prices are per pound, rounded to nearest onehundredth cent.
Cheese, dry whey, butter, and nonfat dry milk prices are weighted monthly
averages of weekly NASS survey prices, rounded to the nearest
onehundredth cent.
Class I:
Class I Price = (Class I skim milk price
x 0.965) + (Class I butterfat price x 3.5).
Class I Skim Milk Price = Higher of
advanced Class III or IV skim milk pricing factors + applicable Class I
differential.
Class I Butterfat Price = Advanced
butterfat pricing factor+ (applicable Class I differential divided by
100).
Note: Advanced pricing factors are
computed using applicable price formulas listed below, except that
product price averages are for two weeks.
Class II:
Class II Price = (Class II skim milk
price x 0.965) + (Class II butterfat price x 3.5).
Class II Skim Milk Price = Advanced Class
IV skim milk pricing factor + $0.70.
Class II Butterfat Price = Butterfat
price + $0.007.
Class II Nonfat Solids Price = Class II
skim milk price divided by 9.
Class III:
Class III Price = (Class III skim milk
price x 0.965) + (Butterfat price x 3.5).
Class III Skim Milk Price = (Protein
price x 3.1) + (Other solids price x 5.9).
Protein Price = ((Cheese price – 0.165)
x 1.405 + ((((Cheese price – 0.165) x 1.582)  Butterfat price) x
1.28).
Other Solids Price = (Dry whey price –
0.14) divided by 0.968, snubbed at zero.
Butterfat Price = (Butter price –
0.115) divided by 0.82.
Class IV:
Class IV Price = (Class IV skim milk
price x 0.965) + (Butterfat price x 3.5).
Class IV Skim Milk Price = Nonfat solids
price x 9.
Nonfat Solids Price = Nonfat dry milk
price  0.14
Butterfat Price = See Class III.
Somatic Cell Adjustment Rate = Cheese price
x 0.0005, rounded to fifth decimal place. Rate is per 1,000 somatic cell
count difference from 350,000.
