The negative Producer Price Differentials (PPD) in many Federal Orders with multiple component pricing have been caught many dairy producers by surprise over the past three months. Under Federal Order pricing, producers are paid for their milkfat, protein and other solids based on the Class III component values. The remainder of their payment, which reflects the difference between the average milk value in an order, and the Class III Component values, is paid on a hundredweight (cwt.) basis as the Producer Price Differential.