Sunday, May 30, 2010

Class III Milk

The major factor in farm milk price Cheddar cheese traded at the CME. The trading of Cheddar sets Class III farm milk.

Cheddar, officially, has a yield, officially of 10 pounds, with a maximum moisture content of 39% of 10 pounds per hundredweight. Never mind that the yields obtained through fortification are 13.7 pounds per hundredweight.

Mozzarella, on the other hand has a maximum moisture content of 60%. Therefore, if made in the traditional manner, the yield is much, much higher than Cheddar. Yet, the mozzarella maker pays the same price for the milk as the Cheddar maker.

At the time manufacturing milk was first thought up, mozzarella was virtually unknown.

So, should there be several Class III prices?

4 comments:

  1. How about one manufacturing price?

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  2. Or at least several factors involved in the price discovery. The more factors with input the less chance of total manipulation as we have now. Plus while we are changing it we could include mandatory reporting with an audit system.DWCovert

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  3. Who is driving the cheese price down all of a sudden? After weeks of hardly any cheese trading there's all of a sudden a ton of loads.

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  4. Until we chew down some of this inventory it will be really easy for the players to drive down the price whenever they want.

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