# 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)

- Base milk assumed to have 3.5% milkfat and 9.0% nonfat solids in skim milk
- Class IV skim milk price = Nonfat solids price x 9
- Nonfat solids price = (Nonfat dry milk price - 0.1570) x 0.99
- Butterfat price = (Butter price - 0.1202) x 1.20

## 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:

- Nonfat Solids price per pound = (NASS nonfat dry milk survey price - 0.1570) x 0.99
- The 0.1570 value represents the assumed nonfat dry milk make allowance.
- The Class IV skim milk price is the nonfat solids price per pound times 9, where the 9 value represents the assumed percent nonfat solids content of skim milk.