Pricing formula established in 2018 Farm Bill takes effect, increases May Class I base price

New formula among key adjustments to dairy policy

Dairy Cows On A Farm

Last week, the U.S. Department of Agriculture (USDA) announced its May Class I base price, using a pricing formula established in the 2018 Farm Bill. This revised Class I formula was a key priority for Land O’Lakes in the bill. It resulted from negotiations between the National Milk Producers Federation and International Dairy Foods Association to create a new agreement and pricing formula, which was then included in the final Farm Bill.
The May Class I base price is $16.42 per hundredweight, an increase of $0.66 from April. This positive development resulted from the new Class I pricing formula. Calculating the May Class I price under the old system would have resulted in no increase in Class I from the April price.
It is important to note that the effect of the new formula on prices will vary from month to month. Impacts to individual producers will also vary based on the producer’s Federal Milk Marketing Order area, and the Class I utilization in that Federal Milk Marketing Order.
This is one of many policy changes implemented in the 2018 Farm Bill intended to help dairy farmers and improve the nation’s dairy safety net.
USDA recently provided an update on its implementation of several provisions within the bill, including a planned May 1, 2019 release of the Dairy Margin Coverage decision tool for producers. In addition to information released from USDA, Land O’Lakes members are encouraged to review a special “Ask the Expert” webinar held in January 2019 to discuss key dairy program changes included in the bill.
If you have questions, contact your Member Relations representative or email the Government Relations team at