Dairy Stream: Dr. Chris Wolf on milk classes, components

By Travis Senn, senior communications specialist

One of the most discussed issues among dairy business professionals and farmers remains the topic of milk pricing. We’ve all heard the old saying: There are only five people in the world who understand milk pricing, and four are dead. 

While a highly regulated and intricate system, milk pricing can be broken down into fairly simple concepts.

One such concept is the bones upon which our current milk pricing system is built: milk classes and components. These concepts are the core of how U.S. dairy farmers are paid. 

In the latest episode of Dairy Stream, a podcast co-produced by Edge and the Dairy Business Association, Dr. Chris Wolf tackles the topic with host Mike Austin. Dr. Wolf is a professor of applied economics and management at Cornell University and a nationally recognized expert on the topic of milk pricing. 

Dr. Wolf starts the episode with a brief history lesson in the formation of classified pricing and pooling and why it was adopted. 

Dr. Wolf then shifts into the basics and details the four classes of milk and what types of dairy products belong to which class. Class I is based upon fluid milk products (and eggnog), Class II is based upon products often eaten with a spoon (yogurt, ice cream, cottage cheese, etc.), Class III contains cheese and whey products and Class IV is built off butter and dry milk products. 

Dr. Wolf spends the rest of the episode diving deep into more detail on how classes and components determine a farmer’s milk check. 

Edge would like to thank BMO Harris Bank for sponsoring this episode of Dairy Stream. 
You can listen to this episode of the podcast and other episodes at 
www.voiceofmilk.com/dairystream.