Agricultural Marketing Service
News Release

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USDA Recommends Revised Class III and IV Price Formulas for A

AMS Release No. 110-01

Becky Unkenholz (202) 720-8998
Billy Cox (202) 720-8998



WASHINGTON, Oct. 23, 2001-The U.S. Department of Agriculture today issued a recommended decision to amend the current Class III and Class IV pricing formulas under Federal milk orders. Today's recommendation follows a tentative final decision and interim amendment responding to a Congressional mandate to reconsider the pricing formulas adopted in the final rule for the consolidation and reform of Federal milk orders.

Portions of the interim amendments were enjoined by the U.S. District Court for the District of Columbia on Jan. 31, 2001. The earlier actions and this decision are based on testimony and data presented at a public hearing held May 8-12, 2000, to consider proposals submitted by the industry to change the formulas.

The earlier tentative final decision was issued because Congressional deadlines of Dec. 1, 2000, for publication of a final decision and Jan. 1, 2001, for its implementation did not allow enough time to issue a recommended decision and receive and consider comments before issuance of a final decision. The District Court injunction of portions of the earlier amendments requires changes to be made to the tentative final decision consistent with the Court's action.

This decision would leave in place the revised manufacturing allowances for butter, cheese, and nonfat dry milk, but reverse the previous determination that there should be separate butterfat prices for milk used in Class III (cheese) and Class IV (butter and dry milk products). Additional technical modifications are made to the protein price formula. The make allowance for dry whey, one of the factors in calculating Class III value, would be increased from the $0.140 left in place under the injunction to $0.159 per pound.

The proposed changes are expected to have little impact on returns to dairy farmers.

The recommended decision will be published in the Oct. 25 Federal Register, and interested persons have until Nov. 26 to file comments in response to the recommended decision and the amendments that have been in place under the injunction.

The following market administrators can provide additional information about the decision.
Northeast: Erik F. Rasmussen
USDA/AMS/Dairy Programs
P.O. Box 1478 (FT Point Station), Boston, MA. 02205-1478
Tel. (617) 542-8966; email:

Appalachian: Arnold M. Stallings
USDA/AMS/Dairy Programs
P.O. Box 18030, Louisville, KY. 40261-0030
Tel. (502) 499-0040; email:

Florida and Southeast: Sue. L. Mosley
USDA/AMS/Dairy Programs
P.O. Box 1208, Norcross, GA. 30091-1208
Tel. (770) 448-1194; email:

Upper Midwest: H. Paul Kyburz
USDA/AMS/Dairy Programs
Suite 210, 4570 West 77th St., Minneapolis, MN. 55435-5037
Tel. (952) 831-5292; email:

Central: Donald R. Nicholson
USDA/AMS/Dairy Programs
P.O. Box 14650, Shawnee Mission, KS. 66285-4650
Tel. (913) 495-9300; email:

Mideast: David Z. Walker
USDA/AMS/Dairy Programs
P.O. Box 30128, Cleveland, OH. 44130-0128
Tel. (440) 826-3220; email:

Pacific Northwest, Arizona-Las Vegas, & Western: James R. Daugherty
USDA/AMS/Dairy Programs
Building J, Suite 102; 1930-220th St., SE., Bothell, WA. 98021-8471
Tel. (425) 487-6009; email:

Southwest: J. Richard Fleming
USDA/AMS/Dairy Programs
P.O. Box 110939, Carrollton, TX 75011-0939
Tel. (972) 245-6060; email:

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