Prices received by farmers

PRICES RECEIVED BY FARMERS
Minnesota-Wisconsin Manufacturing Grade Milk
Price Series and Final Two-State Estimates for
1974 1976


Crop
Reporting
Board
Statistical Reporting
Service


US. Department June 1977
of Agriculture Pr 1-4 (77)
Washington, D.C.
20250





MINNESOTA-WISCONSIN MANUFACTURING GRADE MILK PRICE SERIES
AND FINAL TWO-STATE ESTIMATES FOR 1974-76


The Statistical Reporting Service of the U. S. Department of Agriculture pub-
lishes each month, estimates of the average price received by farmers and the average
milkfat test for milk of manufacturing grade for the preceding month for the Minnesota-
Wisconsin area.

These two-States consistently produce over half of the manufacturing grade milk
marketed in the United States. The estimates relate only to manufacturing grade milk
purchased from farmers and do not include Grade A milk diverted to manufacturing uses.
Data needed for the preparation of the two-State series are collected by the offices
of the Federal-State Agricultural Statisticians in Minnesota and Wisconsin. These
data come from regularly scheduled monthly reports submitted by plants receiving
manufacturing grade milk. After data are summarized and analyzed by the Federal-
State Statisticians, they are forwarded to Washington, D. C. for final review by the
Crop Reporting Service and consolidation into the two-State average price and test.

The Minnesota-Wisconsin (M-W) estimate is the average price for all milk of manu-
facturing grade delivered in bulk tanks and in cans f.o.b. plant or receiving station,
before hauling costs are deducted. It includes bulk-tank, quantity, or other premiums
paid to producers, but excludes hauling subsidies. The price estimates for a given
month are derived from two factors: (1) Estimated average price for the base
month, which is the month preceding that to which the M-W price estimate relates, and
(2) Estimate of change from the base month to the month to which the M-W price
estimate relates.

The base-month price and test are determined from reports from about 200 plants
in Wisconsin and 120 in Minnesota. These plants purchase approximately 60 percent of
all manufacturing-grade milk sold in the two States. Plants report total pounds of
manufacturing-grade milk received from producers, total pounds of milkfat in the milk,
and total dollars paid to producers.

The estimated monthly price and fat test are weighted together by the total
quantity of manufacturing grade milk purchased from farmers in each State. During
the first half of any year, these weights are based on milk purchases for the same
month two years earlier. During the latter half of the year, weights are based on
purchases for the corresponding month in the preceding year.

The 320 plants in the base-month sample are well distributed geographically over
both States and represent all the major types of processing plants using manufacturing-
grade milk. At the end of the year, reports from all manufacturing-grade milk plants
in each State indicate close agreement with the monthly prices derived from the 320
plants.

The estimate of change from the base month to the month to which the M-W price
estimate relates is estimated from reports from a sample of 110 plants selected in the
two States (about 40 plants in Minnesota and 70 in Wisconsin). These plant reports
are also evaluated in terms of changes from the base month in wholesale prices of
manufactured dairy products and historical price and fat test relationships. Esti-
mated changes in price and fat-test are applied to the State average for the base
month to estimate price and fat-test for each State for the month to which the esti-
mate relates.


MFG. GRADE MILK PRICES, JUNE 1977


CROP REPORTING BOARD, SRS, USDA





Plants in Minnesota and Wisconsin are classified into three major product groups
according to the proportion of manufacturing-grade milk purchased for cheese, for
butter and its by-products, and for varied products. In both Minnesota and Wisconsin,
the varied products group consists mostly of plants which make butter, cheese, or
other products in such proportions that they cannot be clearly classified in any one
specific group, such as primarily buttermaking plants or cheesemaking plants. In
Minnesota during 1976, the butter and by-products group accounted for 30 percent of
all manufacturing-grade milk in the State; cheese, 50 percent, and the varied-products
group, 20 percent. The proportion of manufacturing grade milk in Wisconsin purchased
in 1976 by each product group was: (1) cheese, 86 percent, (2) butter and by-products,
3 percent, and (3) varied products, 11 percent.

The percentages of milk for each use are used as weights for combining reported
price and milk fat test data by groups for the monthly manufacturing-grade average
price and milkfat estimates in each State.

Data for the M-W price series are collected from the 110-plant sample, using a
questionnaire mailed near the close of each month. This inquiry obtains information
for the base month and for-the first half of the succeeding month relating to:
(1) quantity of manufacturing-grade milk purchased, (2) quantity of fat included,
(3) dollars paid, (4) average price at average test, and (5) related information, such
as quantities purchased in bulk and in cans, the base price for milk with 3.5 percent
fat, and point differentials for varying amounts of fat. Space also is provided on
the inquiry for the plant manager's best estimate of the average fat test and milk
price for the last half of the month to which the M-W estimate relates.

COMPARISON OF M-W SERIES AND FINAL ESTIMATES The table on page 4 gives a comparison
of the current Minnesota-Wisconsin
manufacturing-grade milk price at average test with the final estimate combined for
the two States from 1974 through 1976, together with the corresponding comparison for
milkfat percentage. The entries in the column headed "Final Two-State Estimate" are
weighted averages of the final monthly prices for Minnesota and Wisconsin combined,
using complete monthly marketing for each State as weights.

For the 3 years 1974 through 1976, the difference between the current Minnesota-
Wisconsin estimates of price per hundredweight and the final data average near 1 cent;
the difference in milkfat tests average is negligible.

Since the Minnesota-Wisconsin price for use in Federal milk orders is reported on
a 3.5 percent milkfat basis, a table is included showing the same comparisons con-
verted to a 3.5 percent basis. The price at average milkfat test is converted to a
3.5 percent basis using a milkfat differential per point (1/10 of one percent) that
is calculated by multiplying the average price of Grade A (92 score) butter at
Chicago by 0.120. This is the method specified in Federal milk orders.

PUBLICATION The report for each month on price per hundredweight at the average
milkfat test and on a 3.5 percent basis is issued about the 5th of the
following month from the Wisconsin office of the Statistical Reporting Service, P. 0.
Box 9160, Madison, Wisconsin 53715. This report is available on request. The price
series is also published in the Dairy Market News reports issued by the Dairy Market
News Service.


MFG. GRADE MILK PRICES, JUNE 1977


CROP REPORTING BOARD, SRS, USDA




COMPARISON OF MINNESOTA WISCONSIN MANUFACTURING GRADE MILK PRICE AND MILKFAT TEST WITH
THE TWO-STATE AVERAGE OF FINAL ESTIMATES, BY MONTHS, 1974-76

MINNESOTA :FINAL : DIFFERENCE BETWEEN
YEAR WISCONSIN : TWO-STATES : FINAL TWO-STATE AND
AND :SERIES : ESTIMATES MINN-WIS SERIES
MONTH PRICE PER :MILKFAT : PRICE PER : MILKFAT : PRICE PER MILKFAT
CWT 1/ :TEST : CWT 1/ :TEST CWT 1/ : TEST
1974 :DOLLARS PERCENT DOLLARS PERCENT DOLLARS PERCENT

JAN 8.28 3.72 8.26 3.72 -.02 0
FEB 8.27 3.67 8.25 3.66 -.02 -.01
MAR 8.26 3.64 8.25 3.65 -.01 +.01
APR 7.84 3.64 7.80 3.65 -.04 +.01
MAY 7.02 3.62 6.87 3.63 -.15 +.01
JUN 6.38 3.59 6.41 3.60 +.03 +.01
JUL 6.34 3.57 6.29 3.53 -.05 -.04
AUG 6.45 3.57 6.47 3.57 +.02 0
SEP 6.83 3.67 6.85 3.69 +.02 +.02
OCT 7.07 3.80 7.10 3.79 +.03 -.01
NOV 7.03 3.83 7.03 3.82 0 -.01
DEC 6.64 3.79 6.68 3.78 +.04 -.01

SIMPLE AVERAGE
1974 : 7.2008 3.6758 7.1883 3.6742 -.0125 -.0016
1975
JAN 6.98 3.73 6.93 3.73 -.05 0
FEB 7.01 3.69 7.01 3.71 0 +.02
MAR 7.00 3.67 7.03 3.69 +.03 +.02
APR 7.08 3.67 7.12 3.69 +.04 +.02
MAY 7.15 3.66 7.18 3.66 +.03 0
JUN 7.21 3.62 7.21 3.61 0 -.01
JUL 7.43 3.59 7.43 3.57 0 -.02
AUG 7.79 3.59 7.85 3.58 +.06 -.01
SEP 8.47 3.69 8.56 3.71 +.09 +.02
OCT 8.94 3.80 9.03 3.77 +.09 -.03
NOV 9.18 3.79 9.23 3.77 +.05 -.02
DEC 9.40 3.76 9.50 3.77 +.10 +.01

SIMPLE AVERAGE
1975 : 7.8033 3.6883 7.8400 3.6883 +.0367 0
1976
JAN 9.13 3.72 9.13 3.71 0 -.01
FEB 8.42 3.68 8.42 3.67 0 -.01
MAR 8.76 3.66 8.58 3.66 -.18 0
APR 8.59 3.64 8.57 3.64 -.02 0
MAY 8.43 3.62 8.45 3.61 +.02 -.01
JUN 8.41 3.58 8.45 3.55 +.04 -.03
JUL 8.76 3.54 8.79 3.52 +.03 -.02
AUG 9.07 3.56 9.05 3.54 -.02 -.02
SEP 8.62 3.64 8.72 3.64 +.10 0
OCT 8.54 3.76 8.62 3.78 +.08 +.02
NOV 8.61 3.82 8.61 3.83 0 +.01
DEC 8.58 3.80 8.55 3.80 -.03 0

SIMPLE AVERAGE
1976 8.6600 3.6683 8.6617 3.6625 +.0017 -.0058

36 MONTHS 7.8881 3.6775 7.8967 3.6750 +.0086 -.0025

1/ AVERAGE PRICE FOR MILK OF AVERAGE MILKFAT TEST.


MFG. GRADE MILK PRICES, JUNE 1977


CROP REPORTING BOARD, SRS, USDA





COMPARISON OF MINNESOTA WISCONSIN MANUFACTURING GRADE MILK PRICE WITH
FINAL TWO-STATE ESTIMATED PRICE, FOR MILK OF 3.5 PERCENT MILKFAT CONTENT, BY MONTHS, 1974-77 1/

YEAR MINNESOTA- FINAL DIFFERENCE BETWEEN
AND WISCONSIN TWO-STATE FINAL TWO-STATE
MONTH SERIES : ESTIMATE AND MINN-WIS SERIES
1974

JAN 8.10 8.08 -.02
FEB 8.14 8.13 -.01
MAR 8.15 8.13 -.02
APR 7.73 7.68 -.05
MAY 6.93 6.78 -.15
JUN 6.31 6.34 +.03
JUL 6.29 6.27 -.02
AUG 6.39 6.41 +.02
SEP 6.69 6.70 +.01
OCT 6.82 6.86 +.04
NOV 6.76 6.76 0
DEC 6.41 6.46 +.05

SIMPLE AVERAGE
1974 : 7.060 7.050 -.010
1975
JAN 6.80 6.75 -.05
FEB 6.85 6.84 -.01
MAR 6.86 6.87 +.01
APR 6.94 6.96 +.02
MAY 7.02 7.05 +.03
JUN 7.11 7.12 +.01
JUL 7.35 7.37 +.02
AUG 7.70 7.77 +.07
SEP 8.27 8.34 +.07
OCT 8.60 8.73 +.13
NOV 8.84 8.91 +.07
DEC 9.08 9.17 +.09

SIMPLE AVERAGE
1975 : 7.618 7.657 +.039
1976
JAN 8.90 8.91 +.01
FEB 8.25 8.26 +.01
MAR 8.60 8.42 -.18
APR 8.44 8.42 -.02
MAY 8.30 8.33 +.03
JUN 8.32 8.39 +.07
JUL 8.71 8.76 +.05
AUG 8.99 9.00 +.01
SEP 8.46 8.56 +.10
OCT 8.26 8.31 +.05
NOV 8.26 8.25 -.01
DEC 8.25 8.22 -.03

SIMPLE AVERAGE
1976 : 8.478 8.486 +.008

36 MONTHS 7.719 7.731 +.012

1/ PRICES HAVE BEEN CONVERTED FROM THE AVERAGE MILKFAT TEST TO 3.5 PERCENT USING THE MILKFAT DIF-
FERENTIAL SPECIFIED IN FEDERAL ORDERS (CHICAGO GRADE A BUTTER X 0.120).


MFG. GRADE MILK PRICES, JUNE 1977


CROP REPORTING BOARD, SRS, USDA




MANUFACTURING GRADE


MILK: WEIGHTS USED TO CALCULATE THE MINNESOTA-WISCONSIN MILK
PRICE SERIES, BY MONTHS 1976-78 1/


: 1976 :1977 :1978
MONTH
: MINN WIS : MINN : WIS MINN : WIS

MILLION POUNDS

JAN 477 566 428 528 426 530
FEB 477 530 429 497 416 517
MAR : 542 626 491 581 464 571
APR 533 644 481 601 467 608
MAY : 566 740 503 668 498 675
JUN 546 751 486 680 469 687
JUL 407 609 421 625
AUG 334 546 370 587
SEP 305 504 318 517
OCT 319 508 326 495
NOV 324 468 340 474
DEC 373 502 389 512


I/ WtibHI) SMHUWN 1UK
EARLIER WHILE WEIGHTS


Y RAUNAJ THROUGH JUNE ARE BASED UP
FOR JULY THROUGH DECEMBER ARE BASED UPON RECEIPTS FROM A YEAR EARLIER.


MFG. GRADE MILK PRICES, JUNE 1977


CROP REPORTING BOARD, SRS, USDA


































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http://archive.org/details/pricesre76unit




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