Saturday, August 8, 2009

Gaming the System

There is an interesting tidbit on page 3 in the latest FMMO 1 “Market Administrators Bulletin”:

“During May and June of 2008, a total of about 300 million pounds were depooled. If this milk had been on the Order, the year-to-year change from 2008 for the first 6 months of 2009 period would have been a decline of 2.9 percent. Most of the effect of this milk would have occurred in Class III negating the increase seen this year.”

Many, maybe most dairy farmers and certainly, politicians, do not understand the concept of pooling and/or depooling. That is a shame.

The real simple answer is that last year, when the CME generated what should have been a high class III price, the farmers never saw the money.


  1. I for one would be most grateful if you had time on this blog to explain some of how the market functions. I know you understand it....most of us do the best we can, but it is really challenging. Thanks

  2. I agree with threecollie, an education in milk pricing and market functions would help us all. If you think dairy farmers are ticked-off now, wait until more of them understand how this all really works, then we might get something done.

  3. my brother worked for the pa fish commission and the state forgot to give them a raise. so they gave them the raise retroative for the past 4 years... Wouldnt that be nice that when they see the farmers were cheated out of money, they have to give it to us for the past years we were screwed. dream on. that is all we have now

  4. I agree with all the above comments... Short, sweet and to the point. :)