NMPF says pandemic brings price and volatility issues that need risk management
National Milk Producers Federation leaders say the volatility in the cheese market and shifts in milk production because of COVID-19 have given them new issues to work on.
NMPF’s Chief Economist Peter Vitaliano says, “We had then a very significant mismatch month-by-month between class three and class four prices, and between class three and class one prices which are priced basically on a combination of class three and four.”
During their virtual annual meeting Tuesday, Vitaliano said risk management programs need to consider what skim milk powder prices and cheese volatility have done to actual milk producer payments. “Not unprecedented problems, but very, very large levels of problems, particularly the negative producer price differentials, depooling, and also issues with the class one price mover.”
Vitaliano says they’ve solved a number of problems this year, but the pandemic situation has given rise to a bunch of new problems within the federal order milk pricing system.