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More Depooling In Sept.; Class III Volume Under 2 Billion Pounds

Six federal milk marketing orders reported negative producer price differentials (PPDs) for the month of September, and the volume of milk pooled in Class III on the seven orders that pay producers based on milk components was under 2.0 billion pounds for the fourth straight month, according to the statistical uniform price announcements recently released by those seven orders.

In September, negative PPDs ranged from minus $1.96 per hundredweight for the California federal order to minus 27 cents per hundred for the Mideast order. The PPD was a positive 37 cents per hundred for the Northeast order.

By comparison, all seven orders had posted negative PPDs in August that ranged from minus $5.24 per hundred for the California order to minus $1.75 per hundred for the Northeast order.

Negative PPDs had ranged from minus $4.86 per hundredweight to minus $9.82 per hundred in July and from minus $7.91 per hundred to minus $3.81 per hundred in June.

As was also the case in June, July and August, large volumes of milk were depooled from Class III in September.

For the seven federal orders that pay producers a PPD, the Class III volume in September totaled 1.68 billion pounds, which is up from 1.5 billion pounds in August and 1.4 billion pounds in July but down from 3.3 billion pounds in September 2019, 3.2 billion pounds in September 2018 and 5.4 billion pounds in September 2017 (the California federal order didn’t take effect until Nov. 1, 2018, so the 2017 and 2018 figures are for six federal orders).

On the California federal order, the statistical uniform price for September was $14.47 per hundredweight, while the Class III price was $16.43 per hundred, the Class I price was $20.54 per hundred, the Class II price was $13.16 per hundred and the Class IV price was $12.75 per hundred.

Class III volume on the California order in September totaled 21.1 million pounds, up from 12 million pounds in August and the highest Class III volume since May’s 53.4 million pounds. Class III volume on the California order has now been under 100 million pounds for eight straight months, and hasn’t topped 1 billion pounds since June 2019, when it reached 1.38 billion pounds.

Class III utilization on the California order in September was 1.2 percent, up from 0.7 percent in August but down from 6.2 percent in September 2019.
California’s Class III utilization hasn’t been above 10 percent since January, when it was 17.8 percent, and hasn’t been above 50 percent since June 2019, when it was 58 percent.

The volume of milk pooled on the California order in September totaled 1.8 billion pounds, down 34 million pounds from August but 30 million pounds more than in September 2019. September was the sixth consecutive month in which less than 2 billion pounds
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