Ouch in the Milk Checks Due to Negative PPDs, Depooling, Reblending
Negative producer price differentials (PPDs), depooling, reblending – All things that dairy farmers will feel in their next few milk checks. Progressive had good coverage and referenced two additional articles that may help explain some of the pain that may be felt. Dave Natzke did such a good job with the article, just go read it – or re-read it! The first referenced article, by Dr. Mark Stephenson (University of Wisconsin-Madison) and Dr. Andy Novacovik (Cornell), is lengthy in its 22 pages, but attempts to help us make sense of milk checks during the pandemic economy. The second, by John Newton (American Farm Bureau Federation) is a shorter stab at explaining negative PPDs. Long story made short, rebounding prices don’t equate to rebounding milk checks for us – there are many factors at play, including the accounting that balances the producer milk and processor money going in and out of the “pool” with the market prices that relate to the products that drive milk prices.
Happy 4th of July weekend. Stay safe and healthy!