• ZISK

California negative PPDs push a $10 deduct

August 13, 2020


Corey Geiger



Cheese prices kept climbing in July and other values stayed relatively flat.


As a result, those negative producer price differentials (PPDs) that appeared in June milk checks took an even deeper negative turn in July. In the California Federal Milk Marketing Order, the negative PPD went from June’s -$7.91 to July’s -$9.82 per hundredweight (cwt.).


That’s a $1.91 downturn.


A similar situation unfolded in a number of other federal orders:


  • Southwest: July’s PPD was negative $8.84. (Had been negative $7.62 in June.)

  • Central: July’s PPD was negative $8.69. (Had been negative $7.51 in June.)

  • Northeast: July’s PPD was negative $5.46. (Had been negative $5.35 in June.)

  • Upper Midwest: July’s PPD was negative $4.86. (Had been negative $3.81 in June.)


The Pacific Northwest and Mideast PPDs for July are forthcoming.


Driven by protein

With cheese prices booming through much of July, protein values in multiple component markets climbed even higher, moving from June’s $4.5349 per pound to $5.6294 in July. That $5.62 is a record and its price applies to all milk priced under multiple component pricing provisions with the Federal Milk Marketing Order (FMMO) system.


While protein prices leapt by nearly $1.10 per pound in the last month, butterfat moved only a dime . . . June was $1.8591 and July was $1.9583. This continuing spread between protein and butterfat values caused an even larger gulf in July’s milk checks when considering the producer price differential.


To review June 2020’s milk price situation, read “Negative PPDs ranged from $3.81 to $7.91.”


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