Dairy Futures and Options Tutorial

An Overview of Class IV Milk Prices

Class IV Price Formula Summary:

Class IV price = (Class IV skim milk price x 0.965) + (Class III/IV butterfat price x 3.5)

Class IV Pricing:

Examples of the types of products produced with Class IV milk are dry milk powder (NFDM) and butter. MCP is used in pricing Class IV with the components in the determination of this value being obtained from the value butterfat and nonfat solids. The butterfat price is the same as the Class III butterfat price (and will not be repeated here) and the nonfat solids price is based on the NASS survey price for nonfat dry milk.

The nonfat solids price is computed as follows:

Click to see a detailed example of the calculation of Class IV price for Aug 2017