Calculation of Advanced Class III and Class IV Skim Milk Pricing Factors

Advanced Pricing Factors are calculated using the weighted
average of prices for the two most recent weeks that were
released before the 23rd of the preceding month.
In the folowing example, the Class III advanced butterfat
pricings factor for Feb 2018 is calculated by using the
bi-weekly (weighted) average of the two weeks preceding it.
These prices were then released on Jan 19, 2018

NASS Biweekly Average Prices

The advanced prices calculated in the section use biweekly
average U.S. NASS survey prices. These biweekly average prices
are calculated by a weighted average.

These biweekly average prices are as follows:

AA Butter 2.2339
Cheddar Cheese 1.5391
Dry Whey 0.2792
Nonfat Dry Milk 0.6926

Advanced Class III Skim Milk Pricing Factor

= (Protein Price * 3.1) + (Other Solids Price * 5.9)

= (1.7465 * 3.1) + (0.0861 * 5.9)

= 5.92

So, the Advanced Class III Skim Milk Pricing Factor for Feb 2018 is 5.92

Advanced Class IV Skim Milk Pricing Factor

= Nonfat Solids Price * 9.0

= 0.5302 * 9.0

= 4.77

So, the Advanced Class IV Skim Milk Pricing Factor for Feb 2018 is 4.77