Major changes in federal milk marketing orders implemented in January 2000 included the adoption of common product price formulas across all orders to derive component and class prices. Previously, federal order class prices were based on reported farmer pay prices for Minnesota and Wisconsin plants making hard manufactured products. The Minnesota-Wisconsin Price Series (M-W), used from the mid-1960s until June 1995, was a direct measure of Grade B milk pay prices. It was replaced by the Basic Formula Price (BFP) which adjusted the M-W for month-to-month changes in commodity prices. Using product price formulas to establish minimum federal order milk prices is fundamentally different from using a competitive pay price. Product price formulas generate milk prices that plants can afford to pay given reported commodity prices and assumed yields and make allowances. Competitive pay prices represent what plants have to pay to meet competition for the raw a milk supply. While plants’ ability to pay and need to pay for milk would be expected to be correlated in the long run, they are distinctly different concepts and may lead to different prices in the short run. This paper looks at how actual federal order Class prices compare with the prices that would have been generated using the current federal order product price formulas applicable to the Upper Midwest order. Two-week and monthly average prices for butter, cheese, dry whey and nonfat dry milk were derived using the procedures and timing currently employed by USDA in administering orders. Then, imputed federal order Class prices from 1991 to March 2003 (when current formulas were implemented) were “backcast” by applying current formulas to the product prices.