Saturday, February 12, 2011
Backwards and Short on NFDM
(click on images to enlarge)
According to theory, prices move forward in capitalism. That is just the exact opposite in pricing raw farm milk from manufactured dairy products.
However, if wholesale manufactured prices are going to be used then why should skim milk powder (SMP)not be included? Lets just say, there is no test which can distinguish NFDM from SMP.
SMP is primarily made for export and when you look at the export prices, the answer becomes apparent - SMP is priced higher. The raw milk going to SMP is priced as if it were going to NFDM.
The difference is $0.102 per pound, using CDFA prices. Adds up to millions of dollars.