Producers get paid primarily for their components. The prices of components, published by the Agricultural Marketing Services (AMS), are really indexes based on standardized levels of components as they were in the year 2000 when the current payment system was established. Over 24 years, there have been some significant changes in productivity. See this recent popular post on 24 years of changes.
Fluid milk was the main usage of milk in 2000. It is now cheese.
The AMS payment program was developed to make sure Class I milk was the highest paid. Now, with every year Class I fluid milk consumption decreases and cheese consumption increases.
In 2000, most milk came from small farms. Small farms are disappearing at an increasing rate. As an example, Michigan lost over 400 primarily small farms in 2023.
Feb. 2, 2024
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