Regaining Trust in Class III

"Starting in 2020, a price divergence between Class III and actual producer pay prices shook up risk management plans just as volatility re-entered dairy markets in a meaningful way for the first time in several years. Since then, when thinking about outlooks, producers must not only consider whether Class III and IV prices will move up or down but also whether their milk check will move in the same direction," wrote Ben Laine, Terrain senior dairy analyst, in an article printed in the April 10, 2023 issue of Hoard's Dairyman magazine.

He went on to write, "The reliability of the Class III milk price for risk management plans has improved recently. And I believe it will continue to be the most reliable reference price to plan against despite having decoupled from other prices in recent years."

Read the rest of the article on the Hoard's website.