The PPD is an adjustment made on milk producer's milk checks (usually positive). With federal milk marketing order pricing, dairy producers get paid for the total pounds of butterfat, protein and other solids sold. The prices of these components are the ones used to determine the Class III price (milk used for cheese). But in addition to these component values per pound dairy producers receive an additional value paid on a hundredweight basis for the additional value of milk used in other Class uses-the Class I price (beverage milk), Class II (soft manufactured products) and Class IV (butter and powder). A differential is added to a pricing mover that represents the manufacturing use of milk to get the Class I price ($1.40 to $1.80 in the Upper Midwest Order) and to get the Class II price ($0.70 differential). The Class IV price is independently derived from the value of butter and nonfat dry milk. So the PPD is the sum of the percentage utilization of milk in Classes I, II and IV multiplied by the difference between Class I, Class II and Class IV and the Class III price. Since Class I and Class II, and sometimes Class IV milk, is typically valued at a higher price than manufactured milk, the PPD usually adds money to producer checks but, not always. negative is because the cheese price during the last half of July moved up rapidly and the July Class III price announced on August 1 was 19 cents per hundredweight higher than the July Class I price that was announced on June 20th. As a rule of thumb, the PPD will be negative whenever the difference between the monthly Class III price and the Class I mover (higher of advanced Class III or Class IV price) is greater than the market's Class I deferential.