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Beginning with January 1995, the Dairy Programs section of the
Agricultural Marketing Service, through its Federal milk order market
administrator offices, began collecting and publishing "mailbox milk
prices".
The "mailbox price" is
defined as the net price received by dairy farmers for milk, including all
payments received for milk sold and deducting costs associated with
marketing the milk. All payments for milk sold include, where applicable:
over-order premiums; quality, component, breed, and volume premiums;
payouts from state-run over-order pricing pools; payments from superpool
organizations or marketing agencies in common; payouts from programs
offering seasonal production bonuses; and, monthly distributions of
cooperative earnings. All payments are shown for the month in which
received. Annual distributions of cooperative profits / earnings -- 13th
checks -- are not included. Also, equity repayments are not included.
Costs associated with
marketing milk include, where applicable: hauling charges, cooperative
dues, assessments, equity deductions / capital retains, and reblends; the
Federal milk order deduction for marketing services; Federally-mandated
assessments such as the National Promotion Program and budget deficit
reduction; and advertising / promotion assessments above the national
program level. Other deductions, such as loan, insurance or feed mill
assignments are not included.
The information reported is
intended to be representative of the entire market by including data for
the major cooperatives and handlers with nonmember supplies operating in
the market. For some markets for which the milk supply area covers a wide
geographic region, the pay prices reported may be limited to those areas
from which the majority of pooled milk is received. This is done because
the pay prices in the outlying areas may be aligned more closely with
another order's pay prices. For all markets, the mailbox price is reported
at the market average butterfat test; there is no adjustment to 3.5%
butterfat.
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